As a retailer, you need to keep records for years. Government regulations, legal needs, or even access to old customer data are all important! I sometimes had to access very old information just for commercial reasons, 20+ years ago.

Now, have you thought about how long your digital records will last?

Sadly, the hard drives and discs we use aren't built to last centuries, unlike the old carvings archaeologists have been uncovering up to today. Let's look into long-term storage, so you make the right choices.

How Long to Keep Retail Records

In Australia, retailers should keep POS system records, invoices, receipts, daily reports, and end-of-day summaries for at least five years. However, seven years is safer under Australian Tax Office guidelines. Keep payroll records for a full seven years, too. Extend that period if the records relate to assets, warranties, or legal disputes.

Here is a detailed table of the times required, I have put together and by who wants it 

Business Record Retention & Disposal Schedule

I will add that, personally, I am not in favour of deletion unless you have to, as you never know when you might need the information. For example, a client of mine is involved in a case linked to 2006. When records this old are missing, courts accepted that as reasonable, but then it becomes their word against the other party's. This is not a good position to be in! 
 

We call this a Potential Litigation Hold.

What Lasts, What Doesn't, and How to Make it Better

• Cloud storage: Theoretically, it lasts forever, but there will be issues.
• Magnetic Tapes to the Rescue? These can, under ideal conditions, last a long time, but few of us actually have the specialised equipment. Besides, it's often a pain to use.
• Old-fashioned Hard Drives: Most last about 3-7 years, though a lucky few last longer. To keep them, you need to use them; otherwise, they deteriorate after about two years.

• Optical Discs: Please aim for quality; write-once media like Verbatim Gold have longer longevity, and the cheaper ones have much less. For CDs and DVDs, you are looking at 5 to 100 years, depending on the type. When I went to the Verbatim website and looked at their warranty here, I noticed they only offer a 2-year warranty, which does not include a data retention guarantee. The courts may have something to say about that, but few people want to have to argue this in court.

Most people today, when considering very long-term storage, look to DVDs because they are both convenient and economical. If you go this route, here is how to do it:

Protecting Your Precious Data on CDs and DVDs:

It depends on three main factors:

1. Have more than one backup. I argue that you do not have a backup if you have only one. These two backups should be stored in different locations so that if anything happens to one, the other is safe elsewhere.
2. You need good-quality DVDs. There are good reasons why they are a bit dearer. This comes from a Canadian government study, which you can find here.

3. Environment matters! Pick a place:

• Cool & Dry: Store items at around 20°C with about 40% humidity.

• The Dark Side: Store discs in cases out of direct sunlight. I put a sealed plastic bag over them.
• Peace & Quiet: Avoid putting the discs where they will be moved or dropped.

Using DVDs for archiving business and POS records has distinct advantages and drawbacks, especially compared to modern hard drives or cloud storage.

Pros of DVD Storage

• Long lifespan: High-quality, archival-grade discs (such as those with a gold metal layer) can last 50 to 100 years when stored in the right environmental conditions.
• Tamper-proof: Standard recordable DVDs (DVD-R or DVD+R) are write-once media, meaning that once your data is burned onto the disc, it cannot be accidentally deleted, overwritten, or infected by ransomware.
• True offline security: DVDs provide "air-gapped" cold storage. Because they sit on a shelf rather than being connected to a network, they are completely immune to online hacking or cloud policy deletions.
• Excellent for chunking: DVDs are great for archiving specific, yearly projects (like a disc labelled "FY2025 Accounts"); other methods, like the cloud, tend to mix up your data.

Cons of DVD Storage

• Low capacity: A standard DVD holds 4.7 GB, dual-layer 8.5 GB. Suitable for text reports and spreadsheets but insufficient for larger files, requiring the management of multiple discs.
• Slow write speeds: Burning data is slower than on fast SSDs and USB drives.
• Vulnerable to damage: DVDs degrade within 5-10 years due to heat, humidity, sunlight, or scratches, often going unnoticed until it's too late.
• Limited hardware support: Modern computers rarely have built-in DVD drives.

Cloud Storage

As the limitations of physical storage have become increasingly apparent, cloud storage emerges as a compelling solution for preserving your digital legacy. In theory, entrusting your data to a reputable cloud provider can overcome many of these problems.

Pros:

• Accuracy: Today, many Cloud storage providers offer an astonishing rate of accuracy in their storage capacity. One I saw doing an online search offering 99.999999999% (that's 11 9s!) data durability. That far exceeds the reliability of any physical media.
• Dispersed storage: Many Cloud providers store your data across multiple geographically dispersed data centres, ensuring redundancy and resilience.
• Easy access: Your data is available on demand from any internet-connected device, anytime, anywhere.

Cons:

• Cost: Generally, it costs, though many, like Google and Microsoft, offer a limited free plan.
• Future uncertainty: Considering the time frame we are looking at here, a cloud provider could go out of business, change its policies, and who knows what else.
• Policy: Some cloud providers, e.g. Google, state that they "reserve the right to delete an inactive Google Account and its activity and data if you are inactive across Google for at least two years." So every two years, you have to log in to your account and say, "Hey, this account is still active." It's not a big ask, but it's not entirely set-and-forget.
• Remembering passwords: Cloud accounts rely on account names, passwords, and, increasingly, mobile numbers. Over the next 10 to 20 years, how will you remember these details? Will you have the same mobile number then? If someone else has access to your account and its passwords, they can also access your data.
• Control: In an overall sense, you do lack control.
• Privacy concerns: Be aware of potential changes in data privacy laws or a provider's terms of service. Although few of my clients have an issue here now, the privacy laws are slowly turning to the idea that much data businesses store must be held in Australia, not an issue now, but who knows in 10 to 20 years.

Summing up:

Overall, my preference would be to burn two copies of my business records onto a good-quality DVD. Put them with your business records in a safe place in your house in a protective box, as seen here:

I would then put a copy on a free service like Google, which I could access anytime, anywhere.

If you decide to go this route, here is a suggested policy

Management of Archived Physical Media (DVD/CD)

Effective Date: [Insert Date]

Objective: To ensure business compliance with the Privacy Act 1988 and ATO record-keeping requirements when using non-rewritable storage media.

Access Controls (Security)
Physical Lockdown: All archived DVDs containing personal or financial information are stored in a secured room, fireproof cabinet or safe.

Restricted Access: Only [Insert Job Title, e.g., Business Owner] is authorized to access the archive.

No Active Use: Staff are strictly prohibited from accessing, copying, or disclosing personal data from archived discs for marketing or general business operations.

Labelling & Warning
Every archived disc or its protective sleeve must be clearly labelled with a Generic Warning.
Label Template: “ARCHIVED DATA: [Year Range]. Contains personal information. Access restricted. DO NOT USE. 

Final Disposal (Destruction)
If you decide to destory the disc, it must be irretrievably destroyed. 

Note: Simply throwing a disc in the general waste or scratching it by hand is not sufficient.

Conclusion

Long-term record storage isn't just about compliance; it's about keeping your retail history available and trustworthy for years to come.

Want to get your data storage sorted? Contact us for a free consultation!

Frequently Asked Questions (FAQ)

Q: Can I leave my POS backups on a USB thumb drive in a drawer?
A: No, I highly advise against this. USB flash drives use similar technology to SSDs. If sitting unpowered in a draw for years, they can lose their charge, and your data may silently corrupt or vanish. They are great for moving files around today, but terrible for 10-year storage.

Q: Does the ATO accept digital copies, or do I need the original paper receipts?

Q: What is the best brand of DVD for long-term archiving?
A: Look for "Archival Grade" or "Gold" DVDs. Brands like Verbatim (specifically their Gold Archival range) or CMC Pro are widely trusted. They use a gold reflective layer that resists oxidation and degrades much better than the cheap silver discs you buy in bulk at the supermarket.

Q: Is it enough to email the backup to myself?
A: I do that, and it's okay for a quick, temporary backup, but it shouldn't be your only long-term strategy. Emails can be accidentally deleted, end up in junk folders, or become inaccessible if your email provider changes policies or you get locked out of your account 10 years from now.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Every time a customer taps their card at your counter, a slice of that sale quietly disappears into the banking system. Currently, many recover some of that expense through a checkout surcharge. Here, I will show you exactly how to use your POS System to protect your margins as the 1 October 2026 surcharge ban deadline hits.

Unlike many people, I was one of the few directly involved in the discussion about the Reserve Bank of Australia (RBA) ban on surcharges, and that is why, after reading some of their advice, which I found almost useless and self-serving, I wrote this article. 

Key Takeaways

• The 2026 RBA surcharge ban legally prevents retailers from passing card processing fees directly to customers at the checkout.
• Least-Cost Routing (LCR) directs debit payments to the cheapest network but requires manual activation by the retailer.
• Blended merchant rate plans will hide the proposed fee reductions unless retailers switch to interchange-plus pricing.
• Many fixed-price stock items force shops to absorb payment costs completely because retail prices cannot be raised.
• Premium reward credit cards remain highly expensive to process and will cut deeply into retail profits.
• No-cost EFTPOS providers must alter their entire business model, leaving retailers vulnerable to sudden fee introductions.
• Modern Point of Sale (POS) software allows retailers to find products that can absorb the price bump.

What is the 2026 RBA Surcharge Ban?

The 2026 RBA Surcharge Ban, effective October 1, 2026, prohibits Australian retailers from adding checkout fees to Visa, Mastercard, and EFTPOS transactions. This ensures consumers see a single final price without surprise charges. For example, a retailer can't add a 1.5% fee on a $20 book to cover banking costs. However, this ban only covers processing costs, not penalty rates for weekends or holidays. Retailers can still charge holiday surcharges if they are clearly disclosed, such as a 10% Sunday surcharge at a cafe, excluding card-specific fees. 

The RBA surcharge ban starts on 1 October 2026 for all domestic card networks.

The RBA combined a ban on interchange fees with mandated reductions, which are hidden charges your bank pays to card networks for transaction approval. For instance, the fee for verifying funds with Visa is capped at a lower rate.

Why the 2026 RBA Surcharge Ban Matters for Your Bottom Line

The 2026 RBA Surcharge Ban shifts the burden of payment processing directly onto retailers. This matters because the fundamental cost of processing electronic payments does not disappear; the RBA wants it to be an invisible operating expense. For example, a shop processing $500,000 in card sales annually will instantly lose $7,500 in pure profit if it previously charged a 1.5% fee to its customers.

Card payments cost the Australian economy over $1.6 billion annually.

Consequently, SMB shops face a structural disadvantage compared to massive supermarket chains. Large acquirers and major retail chains can negotiate ultra-low processing rates directly with banks due to their massive transaction volumes. For example, while an independent newsagency might pay 1.2% per tap, a supermarket giant next door might pay a fraction of a cent per transaction.

Are Cash Discounts Still a Legal Alternative to Surcharging After October 2026?

YES. Cash discounts remain a fully legal and compliant pricing strategy for retailers who want to encourage customers to use cash. The Reserve Bank explicitly allows businesses to display a standard shelf price and reduce it at the register for cash. For example, you can price a greeting card at $8.00 on the shelf, but program your pos system to automatically drop the price to $7.80 when the cashier selects the cash payment button.

However, relying on cash discounts is a severely limited strategy in today's digital economy. Almost all consumers have shifted overwhelmingly to cards, meaning a cash incentive will capture only a small percentage of your traffic. For example, putting up a sign offering a 2% cash discount will not convince many busy parents to walk to an ATM.

Therefore, cash discounts can make only a minor contribution to your overall margin protection strategy. You must combine this tactic with rigorous merchant-fee negotiations and smart inventory pricing to protect your entire business. 

Do Premium Reward Credit Cards Cost Small Retailers More After the Surcharge Ban?

Premium reward and corporate credit cards incur higher interchange fees than standard debit cards mainly because of their point structures, and under the 2026 surcharge ban, Australian retailers must absorb these costs now in full. These luxury cards fund their points programs by charging the merchant more. This practice should be illegal, as the merchant is being forced to pay the bank's marketing. The RBA did not seem to care about that.  For example, processing a standard EFTPOS debit card might cost your shop 14 cents, but tapping a platinum frequent-flyer credit card for the same purchase might cost you 80 cents.

Some shops will be hit much more if they sit in an affluent suburb, where customers are actively chasing airline points and cash-back rewards on every small purchase. For example, a customer buying a simple $5.00 newspaper might tap a corporate credit card, with higher fees.

However, because Amex has notoriously high fees and is not local, you will be legally permitted to refuse their cards. For example, you can stick a clear "No Amex" sign on your front door and configure your pos system to decline those specific cards automatically.

Are You Caught in the Blended Rate Trap for Merchant Fees?

This is important: blended merchant fees include the true cost of card processing by charging a flat percentage across all card types. Banks have been aggressively selling these simple flat-rate plans, but they are incredibly dangerous when the wholesale fees drop. 

The upcoming RBA wholesale caps will, as such, not automatically save you money if you remain on such a plan. When the government forces banks to lower their interchange fees, the banks may not be legally required to pass those savings on to retailers under flat-rate contracts. If so, the bank will enjoy a wider profit margin on your transactions while you continue paying the same 1.5% fee.

Therefore, you must contact your bank immediately and review your pricing. Ask about the "Interchange-Plus" pricing model. It is transparent and charges you the exact wholesale cost of the card plus a small, fixed bank markup. For example, on an Interchange-Plus plan, when the RBA drops the wholesale cost of a debit transaction, only then will your monthly merchant bill drop.

How Does Least-Cost Routing (LCR) Lower Debit Card Costs?

Least-Cost Routing (LCR) is a payment terminal feature that automatically directs debit tap-and-go transactions through the cheapest available network, typically EFTPOS, reducing per-transaction costs for Australian merchants. Almost all businesses will be better off under this scheme. However, most businesses do not have it, and, unfortunately, the Reserve Bank has not legally required banks to enable this money-saving feature. This means most retailers are currently paying higher fees simply because they have not activated it. If so, you must take proactive steps now to fix this in your business. Pick up the phone, call your EFTPOS provider, and explicitly demand that Least-Cost Routing be activated. If your provider refuses or claims their older terminals cannot support the feature, it is time to shop for a new EFTPOS provider immediately.

What Should You Do If You Use a No-Cost EFTPOS Provider?

If you are using a zero-cost EFTPOS provider, you are not actually getting free banking; your customers are simply paying your merchant fees via an automatic surcharge.

From 1 October 2026, the RBA will make it illegal to pass card fees directly to consumers at the point of sale. Because zero-cost providers rely entirely on consumer surcharges for their revenue, their current business model probably reverts to charging retailers directly. They cannot legally continue providing you with free hardware and 0% merchant rates.

Now, traditional banks can comfortably keep charging you a flat 1.5% merchant fee behind the scenes, and what you will see is that the zero-cost providers will rewrite their contracts. 

Recently, I contacted a major no-cost EFTPOS provider on behalf of my clients to ask about their business model after October 2026. They admitted they were still digesting the information and needed time to figure out their post-ban pricing strategy. 

Therefore, if you use one of these providers, you must demand answers about your future contract terms. I suggest contacting them in June after they have had some time to work it out. 

How Do You Handle Fixed-Price Inventory vs Flexible Inventory?

Fixed-price inventory is products you do not control, such as lottery tickets, goods with retail prices printed on them, etc. The retailer cannot adjust the shelf price. These items are considered the biggest problem now.

Consequently, you cannot treat your shop as a single, average-profit pool. You need to identify which departments can carry slightly higher prices without being aggressive. 

What Dates Should Retailers Put in the Diary?

We have a strict timeline due to regulatory deadlines, Unfortuanely they don't match retail realities. The government has created a transparency gap. The ban begins in October 2026, but major banks won't publish actual pass-through rates until late January 2027. This leaves you blind during Christmas.

Foreign card interchange caps take effect on 1 April 2027, but we are still awaiting details.

How Can Your POS System Automate Margin Protection?

Your POS system can act as your primary defence against shrinking retail margins. Rather than guessing which items can absorb price bumps, your software provides hard, irrefutable data on category profitability. For example, you can run a GMROI (Gross Margin Return on Investment) report to discover exactly which gift lines sell quickly at a high margin, marking them as prime candidates for a small price increase.

Furthermore, modern POS software allows you to execute these defensive strategies in bulk, saving you days of manual data entry. Once you decide to increase your novelty stationery category by 3%, the software does the heavy lifting. For example, you can use the bulk price update tool to instantly raise prices on 400 separate stationery items with a single click, instantly updating the barcode database.

Your POS system tracks changes in real-time, showing if adjustments like a 40-cent price increase for premium greeting cards impact sales. If sales stay steady, you've recovered fees without losing customers.

What Steps Should You Take Before October 2026?

Retrieve your latest merchant statement and scrutinise it immediately. This document holds your current financial exposure to card fees. For example, identifying exactly how much you pay in scheme fees, terminal rentals, and percentage rates gives you a baseline to measure any future bank promises against.

Next, execute this strict operational checklist to secure your business:

1. Contact your bank to confirm your current pricing model.
2. Demand written activation of Least-Cost Routing for all terminals.
3. In June, if you use a no-cost EFTPOS provider, find out their exact post-October fee structure.
4. Run category margin reports to separate fixed-price from flexible inventory.
5. Strategically raise prices on flexible, high-margin categories before August.

Finally, communicate with your staff so they understand why signage and checkout processes will change. For example, training your team on how to explain the disappearance of surcharges smoothly prevents awkward conversations at the register when the October deadline arrives.

Conclusion

The 2026 RBA surcharge ban is a profound structural shift that forces Australian retailers to manage hidden costs intelligently. While the government narrative focuses on consumer fairness, the reality is more than that.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Today, AI can help with writing, legal work, accounting, financial reporting, admin, customer communication, etc., in business. The fact, however, is that today the real choice is not finding the "best AI", but finding an AI that delivers the best value without becoming a massive computer job. Here, we will break down our hands-on tests comparing local vs. online AI to help you choose the exact setup that fits your shop. It can run either locally or online. Now, can a local AI replace an online AI for your business? The short answer is NO, but the real answer is it depends.

Key takeaways

• Cost is a major factor, with online AI services like ChatGPT generally costing a minimum of $30 to $35 per month.
• Local AI runs directly on your own hardware and can be free to run if you already own a suitable computer.
• Online AI is much faster and easier to use for everyday business tasks.
• Privacy is highly secure with local AI because your sensitive business information never leaves your computer.
• Hybrid setups that mix local and online AI can work well, but they often become messy in everyday retail use.
• Information on both systems is roughly the same
• POS system reports can be easily fed into a local AI, providing insights that are just as good as a paid online service.

What Is a Local AI and an Online AI?

A local AI runs entirely on your own computer, while an online AI runs on a server and is accessed over the internet. For example, a local AI might sit on your PC in your back room, while an online AI can be used anywhere you have internet. This may be a problem if you work both in the shop and at home. My local AI is on my home machine, and I cannot run it at work.

Today, local AI technology has recently taken a massive leap forward as Google released AI software called gema-4-31b-it, which can run on many computers and delivers very good results, sparking immediate interest among some of our clients. It directly addresses the two biggest problems many business owners are considering with AI right now: ongoing costs and data security.

Moreover, the big problem is the technical knowledge required to set it up properly. Based on my conversations with people who have done it, it is not hard, but they all already had a lot of computer skills. Finally, you must remember that cost is not only about money leaving the bank account. If the owner spends three hours trying to fix a local AI model after a software update, the real cost is management time. For example, those three hours could have gone into merchandising shelves, ordering new stock, or supervising floor staff.

How much better this model is compared to others available is debatable; there is a Chinese AI Software model, Qwen3.5, which I have used, and I think is almost as good. There are also some smaller versions, such as gema-4-2b-it, that can run on not-so-powerful computers, which is very good.

How long does a query take?

This depends much on the model that you use. I did a speed test using a question, "when was GST introduced into australia and when does it apply", I ran this many times using Gemma  on my computer

2B it took an average of 4 seconds

4B it took 18 seconds

26 B took 25 seconds

31 B took me 1 minute 10 seconds

Not surprisingly, the larger the model, the better the answer. Now, interestingly, the older QWEN 35 B gave the best answer, taking 35 seconds. Overall, I found QWEN 35 B to be just as good as Gemma 31 B.

But this is the one that everyone seems so excited about gema-4-31b-it, so let us discuss this one. 

How Much Does a Local AI Really Cost a SMB Business?

The true cost of such a local AI depends heavily on the computer hardware you already own, as the software itself can run for free. You generally need a very good computer from 2025 with a powerful graphics card to run a local AI smoothly. Unfortunately, this is not the sort of computer that retailers tend to buy for their shops. For example, a standard shop PC used just for scanning barcodes does not work for local AI. The computers that can run these models are more like the gaming computers that kids buy. If such a computer is already part of your normal business operations, then the local AI is effectively free. However, if you have to buy a $3,000 gaming computer just for the office, the cost isn't worth it.

Moreover, the next problem is the technical knowledge required to set it up properly. Based on my conversations with people who have done it, it is not hard, but they all already had a lot of computer skills.

Finally, you must remember that cost is not only about money leaving the bank account. If the owner spends three hours trying to fix a local AI model after a software update, the real cost is management time. For example, those three hours could have gone into merchandising shelves, ordering new stock, or supervising floor staff.

What Does an Online AI Cost a Business?

An online AI costs a predictable monthly subscription fee, usually starting at $30-$35. For example, a retailer can pay a flat $35 fee to ChatGPT and get instant access to the smartest models available.

This monthly fee gives you access to massive supercomputers without needing to buy one yourself. If you are a heavy user, however, it can cost much more because most online AI companies have strict limitations on how much you can use them per day. For example, one of our users, after writing 50 product descriptions in one morning, hit a limit and was locked out for a while. Because of these usage limits, many serious AI users end up having two different accounts. This means we are looking at about $65 a month to ensure the business never gets interrupted.

Cost is not just cash; it is also your time. 

Is Online AI Easier for an SMB Business?

Online AI is definitely easier to use for a small retail business because the AI company handles all the technical background work. For example, a retailer can sign up with an email address and start writing an advertisement almost immediately. They are designed to be almost trivial to set up and use for the average user. Most of them offer free plans you can set up to test, so the risks are very small. For example, a shop owner can use a free online plan to write a quick Facebook post without entering a credit card.

Moreover, because these tools are so popular, finding help is incredibly simple. Most computer-literate people know how to use them, so it is easy to get staff or friends to help you if you get stuck.

Ease of use drives adoption. If software is hard to use, we will all ignore it.

How Fast Is Local AI Compared with Online AI?

Local AI is often painfully slow to use compared to the near-instant speeds of an online AI service. Even with a good computer, you do not have a supercomputer. For example, when asking a local AI to write a complicated refund policy, you might literally wait minutes for it to type out the words. This speed point should be considered very carefully by anyone who is busy. I ran tests on a $6,000 computer, and even after an online AI had given me an answer, I was still waiting for the local AI to finish. For short answers, local AI was perfectly fine. But when I asked questions that required a long answer, I ended up making coffee while I waited. This slowness makes certain tasks unusable. If you are dealing with a long, complex legal problem, like a rental agreement, where you need to ask 20 different questions back-to-back, the waiting time makes it unusable. What am I supposed to have 20 cups of coffee?

Size of question

A main problem is that local AI cannot handle as big reports as online AI. This is a real problem if you want to run with a lots of information.

What Are the Privacy and Security Trade-Offs?

The main privacy trade-off is that online AI sends your data to the internet, whereas local AI keeps it on your machine. For example, if you feed your profit margins into a local AI, that highly sensitive data is going nowhere. Data security is one of the biggest concerns for SMB retailers right now. When using an online AI service, you have to ask yourself: where is this information going? For example, if you paste a customer's private address into an online AI to format a shipping label, that data is now stored on a foreign server. You must consider who can access this information and what damage it could cause if it falls into the wrong hands. A local AI solves this completely by keeping the information inside your computer.

Privacy is local AI's biggest strength. Your data never leaves your computer.

How Good Is the Quality of Information from AI?

The overall quality of information from a local AI is excellent and often just as good as that of an online AI. For example, when asking a local AI to explain a tricky accounting term, it provided me with a deep, accurate answer.

Then I fed a local AI several long, highly difficult tests and was very impressed by the depth and quality of the information it provided. Overall, I found the answers to be good, and often better, than those from an online AI service.

Having a smart AI locally means you get top-tier brainpower without paying a subscription. However, there are two major problems retailers must watch for in the quality of this information.

How Current Is the Update Information?

This is the most important problem: a local AI's knowledge depends on its date of manufacture. Here, Google trained it up to January 2025; as such, it knows absolutely nothing about the recent RBA surcharge ban. It also does not know the local prices of the products I asked about. In business, one often needs the most up-to-date information. Well, you cannot get such answers here.

For SMB businesses, this lack of current events makes a local AI impractical for many uses. This is why I do not believe a local AI is a total solution.

AI Hallucinations

An AI hallucination is when the AI goes crazy and confidently makes up nonsense. One of the biggest problems with AI is that, when asked a question, it can simply make up answers. It happens with any AI, and with the state of today's technology, you have to check the answers yourself manually. While I would not say that in my tests, "local AI hallucinates more", it definitely had fewer safety checks. This is because online AI companies have gone to great lengths to address this problem.

You need to check the local AI much more carefully. There is an old warning about free advice: if it is free, you'd better check it.

How Can Local AI Work With Your POS System?

I found that local AI can easily process and analyse daily reports, as long as they are small and generated by your POS software. For example, I exported a few weekly sales reports and fed them directly into the local AI to identify which items are selling best. I specifically wanted to know how this technology handles raw retail data. I had absolutely no trouble doing so, and I was incredibly impressed with the quality of the information that I got back. The local AI instantly read the numbers, spotted the trends, and gave me a clear summary of what was happening in the shop. For example, the AI correctly noticed that umbrellas sold rapidly yesterday and suggested I move them to the front counter.

For this specific job of crunching numbers, I consider the local AI comparable to the paid online service. It will allow you to get free deep insights from a Point of Sale (POS) system without ever uploading your private sales figures to the internet.

Should an SMB Business Use a Hybrid AI Setup?

A hybrid setup is when a business uses both a local AI and a free online AI simultaneously. For example, a shop might use a private local model to read their financial reports, and a free online service to look up current news.

Because many online AI tools offer free plans, many SMBs want to try both. You may consider it, although it is much messier as you need to manage two systems.

Moreover, for many, it is clearly an attractive idea. You keep your privacy when required, while still using online AI when you need web access, faster speeds, or fresher information.

It will work if you are clever. What you might do is go to an online service and ask it, "What factors are important for reviewing a commercial lease?" Now, you get the answer, put it into a local AI, and say, "Based on this online output, what do you think of my private lease document?" It will work, but it's not a good solution as there is always more to consider.

Where Does Each AI Fit Best in Retail?

We were all very impressed with the quality of local AI information, but this is really a decision about the correct fit.

First, for most SMBs, an online AI is a better starting point. It is simply easier, faster, and much more polished for beginners.

Moreover, local AI makes perfect sense when you already have the gaming-style hardware, care strongly about your privacy, and are happy to spend more time.

Where online AI usually fits best

• Marketing campaigns and seasonal store promotions.
• Finding current product information from suppliers.
• Researching current events and news.
• Asking general legal or business questions.

Where local AI usually fits best

• Writing internal notes and staff procedures.
• Sensitive drafting that should stay only with you.
• Repetitive writing on a machine you already own.
• Use cases where avoiding monthly fees matters more than fast speed.
• Processing private financial reports.
• Analysing reports from a pos system.
• Customer communication and email drafting.

Conclusion: Making the Right AI Choice

Ultimately, you do not have to choose the most famous AI; you have to choose the one that makes your retail life easier. If you want instant help with marketing and do not mind a small monthly fee, online AI is your best bet.

However, if you want to analyse sensitive reports from your pos system and already have a strong computer, local AI is an incredibly powerful, free tool. Take a look at your shop's daily tasks, try out a free online plan to get a feel for it, and then decide if bringing the brainpower locally is worth the setup time.

Experiment further

If you want to experiment on your computer, visit LM Studio and download a copy. You can find instructions on how to get started there. There’s also a mobile version available on Google Play, which is handy if you’re somewhere without internet access.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

Today, many shops are losing customers because shoppers now look online before shopping. What you need to do is review your local online presence. Then fix the biggest issues, and make your shop easier to find.

Key Takeaways Box

• Conducting a local online audit to show you what customers see when they search for you.
• Use private or incognito search. This is as it provides a clearer view of what customers see.
• An incorrect business name, address, or phone number will confuse shoppers and search engines.
• A Google Business Profile helps your shop appear in Google Search and Google Maps.
• An incorrect location can lead customers to the wrong shop, so you should test directions yourself.
• Some simple tricks can help Google and shoppers know what you sell.

What Is a Local Web Presence Audit?

A local web presence audit is a simple check of how your shop appears online. For example, a customer might search for "lotto near me", "dog food <suburb>", or "magazines <suburb>" before deciding where to shop.

Next, this audit looks beyond your website. For example, it also checks your Google Business Profile, business name, address, phone number, social pages, map pin, and how your shop appears in search results.

Also, this kind of audit is not hard. For example, you can do it in less than half an hour with a phone, a computer, and a simple checklist.

Fact: wrong details lose sales.

Why Local Web Presence Matters

A local web presence matters because many shoppers often search first and visit second. For example, if they need a card, magazine, gift, or stationery item quickly, they usually look online before they leave home.

Next, local SEO works best when your business details are clear and consistent across the web. For example, if your shop name is one thing on Google and another thing on Facebook, search engines can get mixed signals.

Also, your online details shape trust. For example, if something looks wrong, for example, your address looks wrong, many customers will choose another shop.

Clear local data builds trust.

Search for Your Shop Like a Real Customer

On a paper list note:

1. Your business type, e.g. newsagency, pet shop, chemist, etc.
2. Top three products you sell
3. Name of your shop
4. Phone number of your shop

Searching like a real customer means using the same words and search habits a shopper would. Since I mainly use Chrome, I tend to use Edge in private mode for this work, but in truth, Chrome in incognito mode works well too. This helps reduce the effect of my online usage.

You need to do the Local Web Presence Audit in four stages:

1. With your computer using Google
2. With your computer using Bing
3. With your smartphone, using Google
4. With your smartphone, using Bing

Smartphone results can differ from computer results, and it's about 50/50 which shoppers will use.

For each stage:

Put your business type into the search and add your suburb, e.g., "gift shop <your suburb>" or "Flower shop near me", etc.

Check what you see, note whether your shop shows up, and whether what the search says about you is correct.

Now search for the top three products you sell, e.g. you may say "lotto near me", "dog food near me", "butcher <your suburb>".

Check what you see, note whether your shop shows up, and whether what the search says about you is correct.

After that, search your exact business name on its own. For example, this shows whether your main listing is easy to find and whether old pages, old addresses, or other shops appear instead. Check spelling, punctuation, and the trading name. For example, if one listing says "Smith's Newsagency" and another says "Smiths News & Gifts", you may be making it harder for search engines to connect the dots.

How Do I Check My Google Business Profile and Map Pin?

In my experience, most problems stem from errors in your Google Business Profile. Your Google Business Profile is one of the most important local listings you have because it helps your business appear in Google Search and Google Maps. For example, when someone searches for a nearby shop, the map result often shapes the visit before the website does. I have discussed how to set it up and fix it here.

https://www.possolutions.com.au/blog/boost-your-shop-sales-with-google-business-profile

A modern business needs to have this right. Fix any errors straight away. For example, if the pin is off, move it to your real front door and check that the address matches what appears on your website.

A map pin can make or break a visit.

Finally, also important to look at your business category and photos. For example, good categories and fresh shopfront photos help customers understand what you sell before they visit. Use your POS system's sales reports to make sure that all your major stock items are listed.

How Do I Review My Facebook and Social Media Pages?

Your social media pages should support your local search presence and help shoppers trust your shop. For example, when someone searches your business name, a good Facebook page can confirm that your store is active and real.

Next, ensure your business details match across all platforms. For example, your Facebook page, Instagram bio, and website should all show the same name, address, phone number, and web link.

Then, look at your last ten posts. For example, if the page has been quiet for six months, it may make shoppers think the business is not active.

Also, post what people buy. For example, show new stock, seasonal products, popular gifts, school supplies, card displays, or shopfront photos.

After that, make your posts useful. For example, short posts like "New puzzle books in store now" or "Mother's Day cards now available" can turn a search into a visit.

Finally, check your contact buttons. For example, a customer should be able to call, message, or get directions with one tap.

How Do I Check My Competitors Online?

Checking your competitors online helps you see what local shoppers see first and what people are looking for now. For example, if three nearby shops appear before you for the same product search, you need to know why.

Next, search the same phrases and note who shows up. For example, look at their Google listings, photos, reviews, website pages, and social media activity.

Then, look for patterns. For example, they may use clearer category names, better shopfront photos, or better local wording than you do.

Also, copy the structure, but not the wording. If it's working for them, it can work for you too.

Conclusion

A local web audit is a simple way to make your shop easier to find. When shoppers search online, they need to see the right name, the right products, and the right location without confusion.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

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What I said a few days ago, looking at the RBA's 2026 surcharge reform, was that “the big banks... are certainly winners,” even though many said it looked negative for their fee income so disputed my claim. Here are some interesting charts of Bank Shares over the past few days. The RBA decision was announced on 31 March, and all the big banks’ share prices have been up since then. Check them out here, the RBA decision was on 31st March. Can anyone name any major reason for these price rises in this period other than the RBA decision?

Key takeaways

• The RBA’s March 2026 conclusions paper confirmed a ban on surcharges from 1 October 2026.
• The same package also includes lower interchange fees and stronger transparency rules.
• The announcement looked negative for bank fee income on the surface.
• Major bank shares still rose after the RBA announcement.
• That market move suggests investors may have expected a worse outcome.
• Retailers still need to prepare for the loss of visible card surcharges at checkout.
• POS reporting and merchant fee review will matter more once the ban starts.

What is the 2026 RBA surcharge ban?

The 2026 RBA surcharge ban is a payments reform that ends card surcharges on debit and credit card transactions from 1 October 2026, while also lowering some interchange fee caps and improving fee transparency. The RBA set out that direction in its March 2026 conclusions paper after consultation.

First, this was not just a loose discussion. It was the RBA’s final public position at that stage, and the market treated it as a concrete policy decision. A retailer that once added a 1.5 percent surcharge at the terminal will need to remove that charge and rethink how it recovers payment costs.

Why did bank shares rise?

Bank shares rose because the market likely saw the final package as less damaging than feared. When investors hear a reform that could cut fee income, they do not only ask whether it is negative; they also ask whether it is better or worse than what they had already priced in.

Next, that matters a lot. If traders expected a harsher crackdown on bank and payments revenue, then a more limited package can still push shares higher. In other words, a “bad” policy can still lift shares if it was not as bad as the market feared.

Why did the reaction look odd?

The reaction looked odd because the announcement clearly affected fee income, yet the bank sector still went up after the news. The investors did not read the reform as a disaster.

Moreover, this is where the story gets interesting. If the RBA’s package had really threatened bank earnings in a major way, you would expect a much clearer negative market response. Instead, the share price move implies investors either expected worse or believed the effect would be manageable.

What does the share move mean?

The share move may mean investors thought the banks could absorb the change. It may also mean the reform leaves the wider card system intact, which protects transaction volumes even if some fee settings are trimmed.

For example, a bank can lose some surcharge-related or interchange-related income and still look strong if card use remains high. That is why the market can treat the reform as a short-term negative but a longer-term non-event, or even a mild positive.

Why this matters for retailers

Retailers should not confuse a bank-share rally with a win for merchants. The fact that shares rose does not mean the reform automatically helps small shops.

Instead, the practical issue is that retailers lose a visible way to recover card costs. A shop that used to show a card surcharge at checkout will need another way to protect margin, whether through pricing, fee negotiation, or tighter cost control.

What changes at the checkout

The biggest change for retailers is the checkout experience. The surcharge line disappears, but the underlying payment cost does not.

That means retailers need to understand the full cost of taking cards, not just the visible fee passed to the customer. A POS system that shows payment-type sales, average transaction value, and card-cost impact becomes much more useful once surcharging is no longer available.

How to prepare

Retailers should review their merchant statements, terminal fees, and POS reports now. The goal is to know exactly what card acceptance costs before the October 2026 deadline.

Next steps

Clearly, we have questions about the RBA’s rationale for its decision, but the immediate point for retailers is that the stock market is not your main problem here. Your real issue is how to manage payment costs when you can no longer add a visible surcharge at checkout. The RBA decision should reduce bank fees, help alleviate some of the fee differences faced by small and large retailers, and provide greater transparency into bank fees.

Retailers should take four steps before 1 October 2026:

1. Review current merchant fees and terminal charges.
2. Check POS reporting for payment-method visibility.
3. Revisit pricing to make sure margins still hold.
4. Talk to payment providers about lower-cost alternatives or better fee transparency.

Prepare your shop for the 2026 RBA surcharge ban

Update:

Update:
Since the article first went live, it has become a hot topic. Several have questioned the link between the 2026 RBA surcharge ban and the rise in bank shares. That is a fair point, and it is worth explaining the facts in plain terms.

First, it is true that Suncorp’s share price fell during this period, which at first glance seems to contradict the idea that the RBA decision helped banks. But Suncorp is no longer a normal bank for most investors. Suncorp Group sold Suncorp Bank to ANZ in 2024, took the money, and later returned cash to shareholders. Today, the listed company is more of an insurance business than a bank, so its share move does not tell us much about investors saw the surcharge ban. 

Second, the good share reaction was not just in banks. Payment companies listed on the ASX, such as Tyro and SMP, also rose after the announcement.

Third, that the banks’ shares rose because of the better profit numbers they announced back in February and the interest‑rate move in March. That is true, they did rise, but here the timing is a problem. We are now in April, and those profit updates and the March rate move happened earlier. If those were the reasons, you would expect the share price lift to show up in February and March, not now in April. Instead, the rise lines up most closely with the announcement of the 2026 surcharge ban. Also you need to explain why investors reacted the same way to non‑bank companies in Debit and Credit Crads. Payments players like Tyro and SMP saw their shares rise too, even though they do not benefit from the same upside from bank‑style profits or rate changes.

Third, investors liked that the surcharge ban applies to both debit and credit card transactions from 1 October 2026. When the extra checkout fee disappears for both, customers have the same price whether they use debit or credit. That will make people more likely to use credit cards, because the “extra cost” they used to see is gone. This is what we stated in our submission here. More credit card use means higher fees. The investors would also have liked the bank's comments that new fees will need to be created or some fees will need to be increased to cover the loss.

All of this does not weaken the article’s original point. It just sharpens it. The investors see the final package as positive and manageable rather than a big hit.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

The Australian greeting cards market is projected to grow steadily, with revenue expected to rise towards 2033. Historically, many shops let sales reps dictate their greeting card inventory, partly to save time and because it was lazy. However, relying on these reps means you are likely missing out on profits. The big killer here is the hidden dead stock that eats up valuable floor space. Ultimately, it's only by taking control of your card stock data that you will discover exactly how to change your card stands into a highly profitable department. 

Key Takeaways

• POS reports instantly identify dead and slow-moving greeting cards, reducing wasted stock.
• Digital stock-takes prevent over-ordering and free up valuable backroom storage space.
• Premium boutique cards offer a distinct competitive advantage over local mass-market supermarkets.
• Cross-merchandising strategies place complementary cards near relevant gifts and books.
• Customer loyalty programs track annual buying events to predict seasonal card demand.
• Sales data mapping places high-value items in premium, eye-level shop locations.

The Point of Sale (POS) System Information Hub

A Point of Sale (POS) system is a digital hardware-and-software combo that processes transactions, tracks inventory, and records customer data. It acts as your shop's info hub, recording purchases in real time. For example, buying a $7.95 birthday card instantly updates stock and revenue.

Furthermore, modern software platforms do much more than ring up sales at the front counter. They provide deep, actionable perceptions of consumer behaviour and specific product performance. For instance, a shop owner can pull a quick report showing which premium cards sell best now. Our retail integration empowers shop owners to make profitable decisions.

Consequently, you no longer have to guess what your local customers actually want to buy. By replacing intuition with hard numbers, you can confidently tell your suppliers exactly which items sell on your shelf space.

How Does Greeting Card Management Increase Retail Profits?

Greeting card management involves curating, tracking, and positioning paper inventory to minimise dead stock and maximise retail profit margins. Historically, the greeting card department has been one of the fastest areas in a shop to show financial improvement when closely monitored. For instance, I have seen figures where a high-profit wedding card, simply by moving to an eye-level shelf, instantly doubles its weekly sales velocity.

Unfortunately, too many leave these critical management functions entirely up to external sales representatives. These reps are notorious for making stocking decisions partly based on their company's needs rather than on your shop. For example, a rep might fill your premium spinner with a slow-moving card simply because their warehouse desperately needs to clear it out.

How Does a POS System Manage Inventory for Greeting Cards?

Automated inventory management involves continuously recording every retail sale, return, and supplier delivery to maintain real-time stock accuracy. Specifically, the software flags exactly which items are selling and which ones are collecting dust. For example, if you order five Mother's Day cards, the system will show exactly how many remain unsold by Monday morning.

Additionally, maintaining accurate inventory levels helps prevent costly retail shrinkage and overstocking. It is incredibly common to find heavy boxes of unsold cards sitting in a back room, tying up your precious capital. Yet the rep is ordering more stock for you. Use what you have first!

Identifying Slow-Moving Stock

You need to find the specific products that require dead stock reduction to save your net profitability. You can achieve this quickly by navigating to the reports section in your software and selecting the 'Stock Slow and Dead' reports.

Finally, the resulting detailed report will likely shock you with the total monetary value of your stagnant stock. Armed with this knowledge, you can confidently instruct your reps to permanently remove these duds. For instance, you can hand the rep a printed list of 50 under-performing SKUs that need to be credited and removed today.

How Can Retailers Compete with Supermarkets?

Supermarket competition is the ongoing retail challenge of retaining local customers when large grocery chains sell similar mass-market products. It's hard, as a busy customer buying milk at Woolworths, to avoid grabbing a generic $3 card out of sheer convenience.

Instead, your principal advantage lies in offering premium items. For instance, stocking a beautiful range of handmade, letterpress birthday cards will draw shoppers specifically into your store. Premium products attract high-value local shoppers.

Consequently, you must use your Point of Sale (POS) system to track these high-end ranges rigorously.

What Are the Best Cross-Merchandising Strategies for Retailers?

Cross-merchandising is the physical retail practice of displaying complementary products together to increase the overall size of the customer basket. Because your shop likely focuses on gifts and books, this creates a massive opportunity for impulse purchases. For example, placing a small spinner of baby shower cards right next to your children's book section guarantees overlapping sales.

Furthermore, analysing your basket data will reveal exactly which items are frequently purchased together. Your software can easily highlight these hidden customer buying habits that you might otherwise miss. For instance, a companion analysis report will show that premium anniversary cards are almost always bought alongside your gift stand.

Therefore, you should immediately break your cards out of their isolated, traditional department. Moving a selection of tasteful sympathy cards next to your floral or premium candle displays will noticeably boost your daily transaction value.

How Do Retailers Target Local Demographics?

Market targeting is the analytical process of adjusting your inventory to align perfectly with the income and lifestyle of your local community. Typically, if your local area consists of family-oriented residents with above-average incomes, your product range should reflect their specific wants. For example, an affluent neighbourhood will happily buy a $15 elaborate pop-up card for a child's first birthday.

Furthermore, you can try luxury price points without worrying about alienating your main customers. Your sales data will quickly show the highest price your customers are willing to pay. For instance, testing a small batch of expensive, gold-foil wedding cards will quickly reveal if your market supports premium pricing.

Additionally, you should run category reports to closely monitor important life-cycle events in your community. Make sure your stock always matches your community's social calendars.

How Can Retailers Use POS Data to Boost Customer Loyalty?

Customer loyalty integration involves the strategic connection of specific customer purchase histories directly to their store rewards profiles. Luckily, you already have a steady local customer base, which is your most valuable asset. For example, when a regular customer buys a card, their profile automatically records the transaction date and the particular occasion.

Consequently, tracking this deep data allows you to utilise customer retention analytics to forecast seasonal demand with incredible accuracy.

What Tools Optimise Store Layouts for Better Sales?

Retail mapping tools are specialised reporting features within a point-of-sale system that determine the most profitable physical locations for your products. Essentially, your absolute best-selling cards must be displayed in the most prominent, high-traffic spots on your stand. For example, placing top-selling humorous birthday cards directly at eye-level instantly guarantees higher daily turnover. Calculated positioning maximises overall retail profitability.

Details on how to do this with our system can be found here on how to create a useful planogram.

Next, you can directly compare your current greeting card sales data to past periods to test any layout changes. If you move your sympathy cards to a lower shelf, a quick comparative report will show if sales dropped over the following month.

What Are the Ensuring Steps for Retail Business Owners?

Actionable inventory control is the immediate implementation of software tools to halt bad ordering habits and boost shop profits. First, you must set up a regular, non-negotiable schedule to review your card sales and stock information. For example, using only fifteen minutes every Tuesday morning to run a slow-moving stock report will keep your inventory incredibly lean.

Additionally, you must have a firm, professional conversation with your card company representatives today. Stop relying on their intuition and firmly dictate that they only restock high-performing categories based on your actual data. For instance, you can safely refuse a delivery of generic blank cards if your system clearly shows you already have a six-month supply. Consistent monitoring guarantees long-term retail success.

Conclusion: Maximise Greeting Card Sales Today

A comprehensive POS system is an undeniable requirement for managing a highly lucrative and well-organised greeting card department. Ultimately, using your software's accurate sales data analysis transforms a confused, rep-managed stand into a highly profitable, controlled retail zone. For example, simply identifying and removing your bottom 10% of performing cards instantly frees up cash flow for much better products.

FAQ

Q: How do I quickly find and eliminate dead cardstock that's taking up space?
A: Run a POS report to identify unselling SKUs, then give the list to your rep for credit and removal.

Q: What is Dead Stock?
A: Dead stock is inventory that has not sold within its expected timeframe.

Q: What is planogram?
A: A planogram is a store layout guide that shows where products should be placed to maximise sales.

Q: What is Cross-merchandising?
A: Cross-merchandising is the practice of displaying complementary products together to increase basket size.

Q: How do I stop sales reps from dumping unwanted cardstock?
A: Use your POS data to specify restocks and decline unnecessary deliveries.

Q: How can my shop survive when customers grab cheap cards from Woolworths?
A: Stock premium, high-quality cards like handmade or letterpress to attract shoppers seeking better options.

Q: What should I do if my card spinner is full of duds that won't sell?
A: Remove the bottom 10% of best-performing cards identified via your POS, replace them with high-value items at eye level.

Q: How does a POS system track my individual greeting card sales?
A: When scanned, the system deducts the card from inventory and records the sale in real time.

Q: Where is the most profitable place to put my best-selling cards?
A: Use POS maps to position top cards at high-traffic, eye-level spots for higher turnover.

Q: How do I cross-merchandise cards with other items to boost basket size?
A: Use companion analysis to place related cards near complementary products.

Q: Will my community pay more for premium or luxury cards?
A: Test by introducing expensive cards and assess sales to determine pricing limits.

Q: How can I use my loyalty program to sell more cards?
A: Connect purchase histories to customer profiles for targeted stocking around milestones.

Q: What is the best weekly routine for managing greeting card inventory?
A: Spend 15 minutes weekly on reports, sales review, and layout or order planning.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.

I received a lot of questions yesterday on my article on the RBA ban, not surprisingly, as we did submit a paper.

Rather than make a new post, I decided to add the questions people were asking to yesterday's article to clear up any questions this article raised. Go to the FAQ section to read up on them here.

If people like this I may switch to this format, let me know.

The RBA has officially decided to ban card surcharges in its RBA conclusion paper here. This means that come October 2026, you will no longer be allowed to charge a surcharge for Debit and Credit Card purchases. However, you will still be able to offer a cash discount.

Key Takeaways

• The surcharge ban is a new federal rule starting in October 2026 that prevents retailers from charging extra checkout fees.
• Many will, as a result, see their Profit margins shrink on fixed-price goods, e.g., magazines, lotto, etc
• Interchange fee caps will drop, helping lower the wholesale cost you pay banks for card processing.
• Cash discounts are still completely legal and offer a smart way to avoid card fees.
• POS software gives you the power to update prices in bulk and track your exact margins in real-time.
• Premium cards, the RBA claims that the fee gap between debit and credit cards will be reduced.
• The RBA has asked for clearer transparency rules on hidden bank fees.
• You can still reject American Express

What is the 2026 RBA Surcharge Ban?

The 2026 RBA Surcharge Ban is a federal rule that takes effect in October 2026 and prevents Australian retailers from adding surcharges to card payments at checkout. This new rule forces business owners to pay the full cost of card processing out of pocket. For example, if a customer buys a $10 notebook with a rewards credit card, you cannot add a 1.5% fee to cover the extra credit fees charged by the bank.

Next, the RBA mandated a reduction in one of the bank fees (interchange fees) to help businesses cope. Interchange fees and scheme fees are the hidden wholesale costs that your bank and the card networks charge you to process every electronic transaction. When a customer taps their card, the payment network takes a tiny slice of the sale before the money hits your account. For instance, Visa and MasterCard charge a fee just to use their global networks to verify that the customer has enough money. This should reduce some of the fees merchants are charged.

Also, by forcing banks to publish these fees, the RBA hopes to increase competition. If you know exactly what your bank charges compared to other banks, you can negotiate a much better deal for your store.

Did the RBA Fix the Gap Between Small and Large Merchants?

The RBA claims to close the gap between small and large merchants by strictly limiting the maximum interchange fees banks can charge. You will need to actively check your merchant statements to ensure your bank actually passes these savings down to your account. Do not assume your bank will automatically lower your bill.

The problem of Premium Credit Cards

These cards affect your margins by imposing significantly higher processing costs. Soon, you will no longer be able to recover via a checkout surcharge. RBA thinks that lowering interchange fees will help here, which it will, but only to a limited extent. I am sure merchants will end up having to keep paying for the lavish rewards programs attached to platinum travel cards. For instance, processing a basic debit card might cost you 10 cents, but processing a premium platinum card now costs you over a dollar for the same sale. If a customer tries to pay with a premium Visa or MasterCard, and your terminal can accept them, you must also accept their premium cards, even though they carry higher fees. Mind you, in reality, often you do not know until the transaction has gone through whether it is one of these cards.

American Express

You have complete control over whether you accept American Express. If you feel their rates are too high to match the new 2026 realities, you are entirely within your rights to put up a 'No Amex' sign and turn it off on your POS system.

Will the Surcharge Ban Cause Retail Price Inflation?

The surcharge ban will cause retail price inflation because shops must raise the cost of their goods to absorb the banking fees, which everyone agrees on. The RBA optimistically estimated that this policy would have only a tiny, 0.1%, one-off inflationary effect across the whole economy. We will see whether they are right.

How to Manage Fixed-Price Inventory

These are items where the merchant cannot change the fees. Products such as lottery tickets, newspapers, and phone credit do not offer flexibility for recovering absorbed bank fees. For example, if a magazine publisher prints a strict $9.95 price on the cover, you must swallow the card processing fee entirely. This needs to be addressed ASAP, as the solution proposed of keeping a fixed price item like a magazine at $9.95 but raising the price of a greeting card from $5.00 to $5.50 to balance your overall shop profit, is not workable in the current economic environment.

Why Are Cash Discounts the Best Alternative to Surcharging?

This is the only solution; cash discounts are completely legal price reductions offered to customers who choose to pay with physical notes and coins instead of cards. While the RBA banned card penalties, it openly supports offering price breaks to cash-paying customers. For example, you can price a hardcover book at $20 on the shelf, but program your till to give a 1% discount for cash. Our POS System can be set to do this automatically. Many customers will appreciate the savings. If you are going to do this, put a big sign up so everyone knows.

Automating Real-Time Margin Calculations

When new items, like gifts, come into the shop, you now need to factor in a percentage for bank fees into your pricing. Again, your POS System should be able to handle this automatically.

What Steps Should Retailers Take now?

Retailers must actively audit their current banking costs and overhaul their store pricing strategies long before the October deadline. Do not wait until the last minute. Follow these three steps to protect your store:

Call your bank: Contact your merchant facility provider today and demand a clear breakdown of your current fees. For instance, ask your bank exactly what percentage you pay for standard debit versus premium rewards credit cards. You need to know your baseline costs.

Audit your inventory: Review your stock to identify which high-margin items can safely handle a small price increase. For example, find your best-selling toys or gifts and plan a small price bump.

Fixed price items: You need to review these now. Ask your suppliers what they plan to do about your margins on these items.

FAQ
 

Q: What's the current status on the RBA banning card surcharges? Is it actually happening?
A: Yes, this is Labor policy and is almost certainly going to come into effect.

Q: Will cafes and shops just jack up the price of everything to cover the ban?
A: Yes, you will likely see the cost of card processing baked into the everyday sticker price of items, similar to GST. Some shops may adopt a discount-for-cash policy.

Q: Why don't they just cap the merchant fees as they do in Europe?
A: Good question, I think that is what they should have done. What many lobbied heavily for in Australia was a more targeted fix, of banning surcharges only on debit cards or low-value transactions, as New Zealand did. This was unfortunately rejected.

Q: Are weekend and public holiday surcharges getting banned too?
A: No, the RBA's proposed ban only targets payment processing surcharges, the 1% to 2% fee applied when tapping your card. Weekend and public holiday surcharges are legally separate and designed specifically to cover mandated penalty rates for hospitality and retail staff.

Q: Does the ban apply to both credit and debit cards, or just EFTPOS?
A: The changes aim to eliminate surcharges across all major networks, meaning it would apply to Eftpos, Visa, and Mastercard debit and credit transactions. The ultimate goal is to mandate that the price you see on the shelf or menu is the exact total you pay at the till, regardless of your card type.

Q: How are small businesses supposed to absorb these costs without going under?
A: You can ask your customers to support your local shops by selecting the Savings account, which routes the payment through the cheaper Eftpos network rather than Visa or Mastercard.

Q: Who actually benefits from this? Won't the banks, Visa and Mastercard just keep making billions?
A: Well, the big banks, Visa and MasterCard are certainly winners, but to be fair, consumers will benefit from transparent, upfront pricing. 

Q: Why am I being charged a percentage fee for tapping when the technology costs the same?
A: A good question, as it costs as much to process a $1 transaction as a $100 transaction.

Q: Is this just a push to make us a cashless society?
A: I think so. 

Q: If a shop is still charging me a tap fee right now, are they breaking the rules?
A: No, it is still entirely legal for merchants to charge a card surcharge, provided it is not excessive and only covers their exact cost of acceptance. The ban only starts in October.  This gives retailers a transition period to adjust their pricing models and negotiate new merchant terminal rates with their banks.

Q: How are we supposed to absorb the high costs of premium credit cards without going under?
A: People are expecting a price rise as the actual cost of processing payments has not disappeared; most businesses will have to put these bank fees into their standard shelf prices.

Q: Why do big retailers like Coles and Woolworths get away without surcharging, but we get slammed?

A: Large retailers indeed process an enormous volume of transactions, so giving them the leverage to negotiate significantly lower merchant fees with the banks and card networks than smaller retailers who lack this bargaining power, but what I have noticed is that most of these retailers have quietly given up surcharging a while ago.

Q: Is the government doing anything to lower the actual merchant fees we pay to the banks?
A: Yes. Alongside the surcharge ban, the RBA is requiring banks to disclose previously hidden fees and is enforcing strict reductions on interchange fees. The RBA estimates that 90% of smaller businesses will be better off under the lowered wholesale caps, though most of us remain deeply sceptical.

Q: What happens if we just keep our surcharges active after October 2026?
A: Once the ban comes into full effect, applying a card surcharge will be a breach of consumer law. Non-compliant retailers will likely find that this is a matter for the courts.I would not suggest doing this.

Written by:

Bernard Zimmermann is the founding director of POS Solutions, a leading point-of-sale system company with 45 years of industry experience, now retired and seeking new opportunities. He consults with various organisations, from small businesses to large retailers and government institutions. Bernard is passionate about helping companies optimise their operations through innovative POS technology and enabling seamless customer experiences through effective software solutions.