Things you can do to avoid bank fees when doing your grocery shopping
Since 2009 Australian banks are required to display any ATM fees applicable to the transaction, according to a new regulation. This is also when many consumers became aware of the ATM fees that they were being charged on a regular basis. Most Australians have moved their transactions to supermarkets instead of ATMs in response, as supermarket bank fees are much more favourable.
Decline in ATM usage
Ever since the new regulation forced banks to display transaction fees on the ATM screen, consumers have become aware of and started avoiding ‘foreign ATM’ fees. This term refers to any ATM not owned by your bank. When you withdraw money from such an ATM you are charged an ATM transaction fee varying from $2 to $2.5 per transaction.
Understandably the number of foreign ATM transactions has decreased by 18% since the year the new regulation came into effect. The total transaction volume has decreased by six million, with more and more Australians looking to supermarkets as the source of cash.
Supermarkets in the role of banks
Large retailers such as Coles, Kmart, and Woolworths seem to have replaced the role of ATMs in the minds of the Australian consumer. In most of these retail stores, customers can withdraw cash from their EFTPOS machines, either staffed or self-checkout ones, even if no purchase is made. The lack of any supermarket bank fees attracts the attention of these consumers, as evidenced by the rise in cash out transactions through the EFTPOS system, which has been 12% higher than last year (since the new regulations took effect).
Increased ‘cash out’
Cash out withdrawals have increased over the counter across all major retailers, as well as Australia Post outlets. Approximately one in three EFTPOS transactions now involves cash out. Retailers such as Kmart and Woolworths also allow EFTPOS withdrawals of up to $400 without any purchase being made in-store, hoping to convert the consumers into regular patrons of their stores. With no supermarket bank fees in place they may be right in expecting more bank customers.
Therefore the next time you are at your local supermarket remember to take advantage of the zero supermarket bank fees, and avoid any potential ATM transaction fees.
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