Small business forced to subscribe

The Alchemist’s Bonnie Hanlon.

A small business owner in Kyneton has called out a software service provider for doubling her subscription fee to charge her for an additional service she did not agree to subscribe to. 

Bonnie Hanlon started her art supplies and framing business, The Alchemist, in 2018, and signed up with Vend for her point-of-sale and inventory management software. 

But in 2021, Vend was acquired by Lightspeed, a company that also purchased a host of other retail and hospitality POS companies in recent years. 

In April last year, Lightspeed offered Bonnie its payment processing services, which she declined as the fees were four times higher than she paid with her bank and she preferred the safeguards of using a bank. 

But two months later, Lightspeed announced it was merging its POS and payment services and advised that customers who did not accept the payment processing offer would be charged a service fee for NOT using their services. 

“My additional ‘service fee’ is $200 per month, whereas the subscription fee for the POS is only $179. So my cost has more than doubled, as has their revenue,” Bonnie said. 

“I was told this fee was to help them cover the extra costs of staffing customer service enquiries about payment processing … that they don’t manage. 

“I have never once asked for help relating to a payment or payment dispute as this is clearly a question for my bank.” 

Bonnie challenged the first $200 fee taken from her bank account and it was subsequently refunded, but since then monthly fees have been deducted and the company will not answer her calls. 

“The ‘best’ card processing fees they can offer is twice what I pay though my bank, which is an extra $4500 per year, or I can pay the additional service fees of $2400 per year, or I can change POS systems, which will come at a huge expense due to the volume of my inventory,” she said. 

“I firmly believe that they are acting in bad faith due to the diminished negotiating position of their customers and their lack of clarity over their terms of service agreement and this change of contract without negotiation. 

“There was no notification of any change to the terms of service agreement entered into. Despite the change from a software service to a financial service. 

“I don’t charge an eftpos transaction fee to my customers but would have to consider passing the additional cost on to customers if I’m unable to reach an agreeable solution with Lightspeed.” 

Bonnie has been requesting information and clarification from Lightspeed for months. 

“What right does a company the size of Lightspeed have to force small, independent businesses to use an inferior service at an inflated cost or be unjustly charged exorbitant fees?” she said. 

“I have banded together with two other small businesses in my industry and we will file a joint complaint to the ACCC.” 

– The Midland Express left multiple phone messages with Lightspeed, and emailed questions several times, but despite acknowledging receipt of those questions and promising to respond, the company has not done so.