Shops Want Fee To Cash Cheques

Press, Volume CVII, Issue 31502, 17 October 1967, Page 32

Shops Want Fee To Cash Cheques

(New Zealand Press Association) AUCKLAND, October 16. Shopkeepers, particularly in the country areas, where cheque changing was prevalent, would have to charge the 3c clearance fee when they cashed cheques in future, the secretary of the Auckland Master Grocers’ Association and the Auckland Provincial Retailers’ Association (Mr R. M. Barker) said today. Commenting on the new bank charges, Mr Barker said that in the absence of any evidence to the contrary it had to be accepted that the banks would neither gain nor lose.

Many shopkeepers, and grocers in particular, became clearing houses for customers’ cheques.

“It is certain that in future most storekeepers will have no alternative but to request payment of the 3c clearing fee which they will have to pav,” said Mr Barker. Few of this type of storekeeper now paid exchange so they stood to gain nothing from this source. Study Of Position Several large commercial and consumer service companies said they would be taking out figures to determine the cost of carrying the clearance charge of 3c on cheques sent in by customers to pay accounts. The Auckland and Waitemata Electric Power Boards, which receive thousands of cheques weekly, were examining the ramifications of the new charges, in particular the clearance fee.

Mr W. G. W. Rix, president of the Retailers’ Federation, also said retailers would have to ask customers to add the 3c clearance fee introduced by the banks to their cheques, in the way they had been requested to add inland exchange in the past. Costs Absorbed Mr Rix said: “In recent months retailing as an industry has absorbed very substantial increased costs, including increased rates, telephone costs, electricity and freight costs, without changing its pricing methods. “The retail mark-up on goods stocked by members of the federation has remained fairly constant for the last decade. The industry is highly competitive and as it has not been possible to ‘hand these costs on’ they have been absorbed. “Now the majority of retailers are faced with increased bank charges, some very substantial, at a time when they are trying desperately to reduce costs in the face of falling turnover.”

Mr Rix said the federation recognised the method of bank charges required revision, but it could have been more equitably applied if the charge had been placed on the drawer of the cheque. Charges Criticised The Leader of the Opposition (Mr Kirk) strongly criticised the new system of bank charges and said the new charges would be another addition to the increased costs that had burdened the community this year. “Apparently, the Government has given its approval privately to these proposals. Consequently it has some responsibility for these new increased costs,” he said. Mr Kirk said in a statement that the new charges would affect many farmers, shopkeepers, young people and all small account holders. Some three-quarters of the banks’ customers, including almost every private account holder, are going to be made to pay more.

Even the smallest cheque account holder, using only one or two cheques a month would be required to accept a 30 per cent increase.

“For many of the banks’ customers the increase in annual charges for operating a cheque account will be over 200 per cent,” he said. Mr Kirk said the newly announced clearance fee could be as irksome as the exchange charge that was being abolished. He said the banks must know that such costs are usually recovered by handing them on. Mr Kirk’s Alternative Mr Kirk said that it was clear the cause of the proposed new charges was not because of financial necessity but more a matter of meeting the desires of the trading banks themselves. It was open to the Government to grant cheque facilities to the Post Office and trustee saving banks, thus providing an avenue where small account holders could avoid the increases about to be imposed, he said.