Marsiling mart owner defends 50-cent e-payment surcharge on cigarettes, says it's due to tobacco tax hike
The owner of a grocery mart in Marsiling has defended his decision to impose a 50-cent surcharge on cigarette purchases made via electronic payments (e-payments), citing rising tobacco costs and low profit margins.
In a Facebook post on March 12, user SiaoLyn Lyn described her experience at MyHome Mart at Block 132 Marsiling Rise.
She said she had planned to buy four items but was told a 40-cent surcharge would be imposed for every item if she used PayNow, adding $1.60 to her total bill.
Speaking to Stomp, the 38-year-old social media marketing freelancer, who wanted to be known as SL, said there was no signage informing customers of the surcharge at the time, and she was only told at the point of payment.
She decided not to proceed with the purchase and went to a nearby mart instead, where she was not charged for using PayNow.
Surcharge applies only to cigarettes
When Stomp visited the mart, staff clarified that the surcharge applies only to cigarette purchases made via e-payments.
A sign was displayed above the e-payment QR code alerting customers of the practice. This reporter also made a purchase using PayNow and was not charged an additional fee.
The QR code used for digital payments was under NETS.
In response to queries, a NETS spokesperson said merchants are informed that costs associated with accepting NETS e-payments are to be absorbed by the merchant, and that surcharges should not be passed on to consumers.
Similarly, the Association of Banks in Singapore (ABS), which oversees the PayNow system, told Stomp that PayNow is "intended to be provided free to consumers" and that banks would have informed merchants not to charge processing fees for such payments. It added that it was unable to comment on the specific case.
Extra fee covers processing fee and tobacco law
Speaking to Stomp, the shop owner of MyHome Mart, Mr Tan, 52, clarified that there was never a blanket charge over all goods in his store.
He said a 30-cent charge had previously applied to cigarette purchases, but this was raised to 50 cents following a 20 per cent tobacco tax increase that took effect on Feb 12. This was part of efforts to reduce smoking prevalence rates.
According to the Ministry of Finance, the price of a single stick will cost 58.9 cents, up from the previous 49.1 cents. As such, a packet of Marlboro cigarettes could increase from about $15.60 to $17.74.
Mr Tan said he only earns about 15 cents per pack after deducting bank processing fees and unit cost — roughly one per cent of the retail price.
"The cigarettes I sell are already cheaper than other stores by 70 to 80 cents," he also told Shin Min Daily News. "If I don't charge that 50 cents, I'll lose money after deducting bank fees, especially for pricier cigarettes."
The store accepted the following e-payments:
- PayNow
- NETS
- Credit cards
- WeChat Pay
- Alipay
He added that processing fees across platforms range from 0.8 to 2.8 per cent.
While he acknowledged that such surcharges are not allowed, he told Stomp he felt he had little choice if he wanted to remain profitable.
Customers who wish to avoid the surcharge are encouraged to pay in cash, he added.
Nearby stores receive customers from MyHome Mart
Two grocery marts within walking distance of MyHome Mart told Stomp they occasionally receive customers who patronise their stores after learning about the surcharge.
A 54-year-old employee at Yi Jia Family Store who wanted to be known as Mr George said smokers often visit multiple stores in the same area to compare prices. Those who do not live nearby also tend to buy cigarettes in bulk, making MyHome Mart's 50-cent surcharge per pack less appealing.
While Yi Jia Family Store does not impose surcharges for PayNow payments, Mr George said he understood the rationale behind MyHome Mart's decision.
He agreed that cigarette sales offer slim margins after accounting for various fees, especially following the latest tobacco tax increase. "It is a business tactic: to drive profit and attract customers. Customers can benefit if they pay in cash too."
Mr George added that he did not want to pass judgement, noting that there are different perspectives: business owners need to turn a profit, while customers are looking for the best deals.
"Customers are the boss. If they think you're doing something wrong, it will affect how they see your business."
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