RBA card surcharge shake-up to push shoppers towards retail loyalty programs for ‘freebie fix’

The battle for customer loyalty is heating up, with the Reserve Bank’s looming shake-up on card payment surcharges tipped to push consumers towards retail memberships for their “freebie fix”, experts say.

From Thursday, surcharges on EFTPOS, Mastercard and Visa payments — whether it’s made using a debit, prepaid or credit card — will be banned.

While the crackdown is tipped to save consumers $1.6 billion a year at the checkout, experts say credit card providers are using the changes to overhaul their rewards programs, with some customers now facing higher fees and fewer benefits.

Canstar data insights director Sally Tindall said this would likely have ripple effects across the broader industry, with customers set to reassess how they pay for things and which banking products they keep in their wallet.

“Credit card churn over the next few months is expected as people move to a card that’s a better fit for their finances and their lifestyle,” Ms Tindall said.

“However we’re also expecting some credit card customers will drop out of the rewards game altogether and switch over to paying things with their debit card.”

The changes could also push customers further towards retail loyalty programs for their “freebie fix”, Ms Tindall said, instead of shelling out hundreds of dollars on annual fees on a credit card that “doesn’t pack the same rewards punch it used to”.

It comes as retailers overhaul their loyalty program in a bid to grab more shoppers.

Wesfarmers in August rebranded its Priceline Sister Club loyalty program into Pulse Rewards, giving customers more ways to build up points.

Members can now earn points across Wesfarmers’ health brands, including at Priceline Pharmacy, Atomica, Silk Laser Clinics and InstantScripts.

Wesfarmers Health chief customer officer Richard Pearson said it had an ambition to build the biggest and best loyalty program in Australia.

“Through the evolution of Sister Club to Pulse Rewards, our 10.5 million members now have even more opportunities to earn rewards,” he said.

“Our loyalty program is incredibly important. It’s how we connect with and reward our most valuable customers.

“Members shop with us more often and spend more with us, so it’s important we’re continually finding new ways to recognise that loyalty through member-only pricing, reward vouchers, bonus point offers, gifts with purchase, competitions and exclusive experiences.”

Mr Pearson said members have redeemed more than $20 million in rewards over the past year.

This week, department store giant Myer revealed it achieved its sixth-consecutive year of growth for its loyalty program Myer One, with active members hitting a record 5.3 million in 2026.

Under boss Olivia Wirth, the department store giant has been transforming Myer One in a bid to fuel sales and unlock data to target younger shoppers with refreshed product offerings.

Tag rates — or the number of transactions linked to a membership — hit 81.5 per cent at Myer’s flagship department stores in the 2026 financial year.

At Just Jeans, Portmans, Dotti, Jay Jays and Jacqui E — collectively known as Apparel Brands — tag rates hit 55.1 per cent following the launch of Myer One across the portfolio.

Ms Wirth said about half of the new customers who joined Myer One in 2026 were younger than 35.

“You do see that when times are tough that people are using their points to redeem. Our customers . . . see genuine benefit in being a Myer One member,” she told The Nightly.

“We’re also seeing a really strong redemption through our partners, which include Yello rewards with Commonwealth Bank.

“Those customers (are) choosing to burn their Commonwealth Bank points with us, and also (Virgin Australia’s loyalty program) Velocity.”

Myer in May 2025 first flagged plans to expand Myer One partnerships with companies like CBA and Virgin Australia, allowing customers to redeem points beyond the department store network.

Canstar said banks were increasingly joining forces with retailers to drive loyalty. However, it warns that while the earn rate — or how quickly customers can collect points when they spend — remains the same, it can quietly become less valuable if the number of points needed to redeem rewards increases.

Canstar pointed to CBA’s burn rates on its rewards program, including to redeem gift cards at Myer. From the end of the month, CBA members will need 12,500 points to get a $50 Myer gift card — up from 10,950 points.

Elsewhere the Flybuys loyalty program — jointly owned by Coles and Wesfarmers — has more than 10.5 million members.

A Coles spokeswoman said last year, nearly 5 million members redeemed 2000 Flybuys points for $10 off their groceries. She said this demonstrated the important role loyalty played in helping customers get more value from their shop.

“Our loyalty offer goes beyond specials and promotions, giving members access to additional value and exclusive rewards, including our popular Curtis Stone cookware and glassware collections,” the Coles spokeswoman said.

A spokesman for Endeavour Group said Dan Murphy’s loyalty program My Dan’s had an 84 per cent scan rate, which demonstrated its members were seeking the best value.