Shops reject plan for AIB 'cashback' Laser levy

NEWSAGENTS HAVE written to Allied Irish Banks (AIB) protesting at the decision to charge them 20 cent for every cashback transaction in store.

The Convenience Stores Newsagents Association (CSNA) which represents 1,500 small and medium sized retailers around the country said the charge is a revenue-gathering exercise by AIB which has seen its share price plummet in recent months because of the credit crunch.

The CSNA estimates that the extra charge, which will be paid for by the retailer and not the customer, will cost shop owners an average of €3,500 per year.

Currently, retailers pay 20 cent for each use of the Laser card.

Customers, who do not have free banking with AIB, also pay 20 cent.

The extra charge, which will be implemented from October 1st, means that AIB will take up to 60 cent for every Laser cashback transaction.

The new charge was outlined in a letter last week which AIB merchant services sent to all 3,700 outlets which offer Laser cashback.

CSNA chief executive Vincent Jennings said yesterday its members are considering either refusing to give cashback on AIB Laser transactions or passing the charge on to the customer.

There are 2.5 million Laser customers in the country who made 130 million transactions last year.

AIB, which has more customers than any other Irish bank, accounts for about a quarter of them.

The CSNA estimates that the new charge will net the bank about €1 million a year in additional revenue, at a conservative estimate.

“We will gladly pay out 20 cent if there is a new service, but this is the same service this week as next week.

“This is just where can we get money from it,” Mr Jennings contended.

“We are handing customers’ money out of our tills and AIB is taking a cut out of it. That’s a bit rich of them,” he said.

“We already pay to rent the terminals and for the till rolls,” he pointed out.

“We don’t have a difficulty with the initial Laser charge of 20 cent because the banks are providing us with access in a speedy fashion overnight to our account, but this is an extra charge that is not necessary.”

He said that AIB is the only bank out of the seven financial institutions which currently use Laser to apply this additional charge increase for cashback in store transactions.

Bank of Ireland, Ulster Bank, National Irish Bank, Permanent TSB, First Active and EBS have not indicated that they intend to introduce such a charge.

In a statement AIB defended the charge saying that it is introducing the charge because the cashback service costs the bank money.

“Laser purchase with cashback transactions (LPWCB) provides many benefits for retailers including an additional service for customers and improves security by reducing cash on a retailer’s premises,” the statement said.

“It should be noted that this charge applies to retailers and therefore there is no change for cardholders, ie there is no charge for cardholders for this cashback service.”