diamond geezer

 Wednesday, March 04, 2020

Today's post is for people who still use Oyster cards, know people who might want to use Oyster cards, or simply enjoy tutting at transport-related decisions they have no control over.

Oyster cards have been with us since 2003. Initially they were provided free, but in 2009 a refundable deposit of £3 was introduced, and in £2011 this was increased to £5.

Should you ever want to cancel your Oyster card, TfL have always been happy to give you a refund. This can be done at any tube station ticket machine so long as your remaining credit is £10 or less. The machine returns your £5 deposit and your spare credit, in cash, then cancels your card. Refunds of over £10 PAYG have to be completed by post.

It's been estimated that over 60 million Oyster cards haven't been used in the last twelve months, and that TfL are sitting on £400m of our money. A lot of people keep an old card lying around in case they ever need it, even though the relentless march of contactless makes it less likely that they ever will. But the real issue isn't obsolescence, or forgetfulness, it's disposability.

Of the 9 million Oyster cards issued each year, less than a quarter are still being used four weeks later and only 10% are still in play after a year. That's a significant level of card churn, and can't simply be explained by tourists going home.

So last week TfL introduced a significant change to encourage people to hold on to their Oyster cards for longer. They changed the £5 refundable deposit to a £5 fee.

If your Oyster card was issued before 23rd February 2020, don't worry, there's no change and you can still get all your money back at any time. But for Oyster cards issued from 23rd February onwards, that initial £5 is a sunk cost.

Nothing on the actual card is changing, this is only a software tweak. When you buy your new Oyster card from a machine the on-screen description will now say 'card fee' rather than 'deposit'. And later, if you go back to a machine to get a refund, it'll check the issue date before it decides whether to pay up. Like so.

But describing the £5 as a fee isn't quite the full story. Your fiver will eventually become refundable, but only if you hang onto your new Oyster card for at least twelve months. It's only being treated as a fee for the first year, but after that it becomes a deposit and you can get it reimbursed.

Technically it's still a deposit, just a deposit you can't get back for the first year. But it's being described as a fee. A lot of smoke and mirrors is going on here.

It hasn't yet been decided how refunds will be provided, indeed the situation won't arise until next February when the first 'card fee' Oyster cards mature. One option TfL are considering is an automatic refund on the first anniversary of purchase, with your £5 being translated into a £5 credit.
But you'd only be told about this automatic refund if you'd registered your card with an email address on the TfL website, and you'd only have a 4-day window to collect your top-up by swiping on a pad somewhere, and this would suddenly leave your Oyster without a deposit so you could now simply exhaust your PAYG and throw your card away. My hunch is that this is an entirely impractical idea, but as I said they haven't decided quite how to do it yet, so we'll see.

One way you might be drawn into the murky world of depositless Oysters is if your existing card is lost, stolen or fails. The replacement you get will now be subject to a £5 card fee, rather than a £5 deposit, which you might not appreciate.

Your first move should be to go online and link your new Oyster card to your old one, which ensures that any existing PAYG balance will be transferred across and your original £5 refunded. But you'll still have paid £5 to get your new card in the first place, and that £5 won't be reimbursed in future... unless a year has passed, or unless TfL's backroom processes are robust enough to spot that you once had a refundable deposit so choose to refund it electronically, and blimey this is complicated.

TfL's hope is that the switch from 'deposit' to 'fee' will encourage customers to hold onto their new cards for longer or, better still, switch over to contactless which has no upfront cost. But customers won't discover the financial benefits of holding onto their new cards for longer until a year has passed, because the chosen approach is all stick and no carrot.

To draw a wider conclusion from this change, creating a 23rd February watershed in Oyster's terms and conditions has forced the introduction of a tranche of convoluted additional rules which have made a relatively transparent process more opaque. Adding a 'good idea' to an existing system can be incredibly messy. Sometimes it might be best to leave things well alone.

But like I said, it'll probably never affect you. So don't tut too loud.

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