Banks run the risk of a customer backlash if they continue with "absurd charges" for simple services such as changing small amounts of cash, the Consumers' Institute says.
Chief executive David Russell said there were no regulations to prevent banks from charging customers for splitting a $20 note.
"But they do so at the peril of upsetting potential customers. If someone went into a bank wanting to break a $20 note and was charged for the privilege, that's absurd.
"They're applying their cash-handling fee in a ridiculous way. From a marketing point of view, from an image point of view, that's just plain dumb."
Spokespeople for ASB Bank, ANZ, Westpac and BNZ told the Herald that it is not standard practice to charge people who want to change small amounts of cash.
But this is at odds with the experiences of several people who contacted the Herald yesterday.
"This is unbelievable," emailed Karen Hawxhurst, who said she was asked for a $20 fee for breaking a $100 note at the Westpac on Auckland's Dominion Rd, Mt Eden. "Not being a customer at this bank, the teller wanted to charge me. What a rip off. I informed Westpac I would never become a customer of theirs if this is how they treated non-customers."
An email from Shelley Raskin said: "As an ex-trainer at Westpac (left January 2007) I can tell you that it is Westpac policy to charge $10 for any non-Westpac customer requesting change, regardless of the amount or their position."
Corry Joubert, from Waihi Beach, said he changed his $50 note into $10 notes at a local bookshop after the local BNZ wanted to charge a fee. "The cashier told me that I have to pay a cash handling fee because I was not a BNZ customer. I was the only customer in the bank, with two cashiers working at the time, so they weren't even busy."
Jessy Thomas refused to fork out $5 at a BNZ at Auckland International Airport when she tried to change $50 bills to $100 notes.
She had only just withdrawn the money from the bank's ATM machine outside. "I thought it was ridiculous and refused, and didn't bother changing the money."
BNZ spokeswoman Brenda Newth said the incidents involving BNZ were genuine mistakes and should never have happened. The bank would speak to the branches concerned.
Westpac spokesman Mark Watts said the bank charged a fee for non-Westpac customers if they were changing money for commercial purposes. But he said it was extremely unlikely customers or non-customers would be charged for changing a small amount.
He said the bank would make inquiries today.
