Why Being a Good Customer Costs You More (Loyalty Tax, Explained Simply)

Picture a coffee shop that charges you $6 for your usual flat white. The person behind you, ordering for the first time, gets the same coffee for $4.50. Now picture that's not a coffee shop. It's your electricity company. Your insurance company. Your internet company. Your bank. That's loyalty tax.

It costs the average Australian household $500 to $1,500 every year (eTax.com.au, 2025). This page explains what's going on, in plain terms, no finance degree needed.

For a deeper look at how loyalty tax works across every sector, read our complete guide to loyalty tax in Australia.

TL;DR: Companies charge their longest-standing customers more than brand new ones, for the same service. It's called loyalty tax, and the average Australian household loses $500–$1,500 every year because of it (eTax.com.au, 2025). Most people drift onto a worse deal over time. Not because they're careless, because sorting it is a hassle. This page explains how it works, and how we sort it.

What Is Loyalty Tax?

What is loyalty tax in plain English?

Loyalty tax is when a company charges you, a loyal, long-term customer, more than it charges someone who just signed up. There's no reward for staying. The longer you've been a customer, the more you're likely paying above the new-customer price.

It's not written anywhere on your bill. You won't find a line that says "loyalty tax: $18." It sits in the gap between what you pay and what a new customer would pay for the same thing.

That gap adds up. Across electricity, insurance, phone plans, and home loans, it can reach $1,500 a year or more for a typical household.

Why do companies do this?

Because most people don't check. Companies know loyal customers are the least likely to leave. So they save their best deals for people about to walk out the door, and quietly charge everyone else a bit more.

It isn't a mistake. It's a business decision. The money they make from loyal customers who don't check pays for the discounts they use to win new ones. You end up funding someone else's introductory deal. It works for them because most people never notice, or notice but never get to it. Fair enough. Life's busy.

Citation capsule: Loyalty tax is the price gap between what long-term customers pay and what new customers are charged for the same service. The average Australian household loses $500 to $1,500 every year across electricity, insurance, phone plans, and home loans, according to eTax.com.au (2025). This gap isn't accidental, it's a deliberate pricing strategy that relies on customer inaction.

Citation capsule: Australia's consumer watchdog found that customers on the same electricity plan for three or more years paid $221 more per year than customers on a newer plan (ACCC, 2025). Separately, insurance customers in years two and three of a policy paid 34% above what new customers would pay for the same cover (ACCC Insurance Monitoring, 2023). These figures cover electricity and insurance alone, before phone plans or home loans are counted.

How Do I Know If I'm Paying Loyalty Tax?

You don't need an accountant. The check itself is quick once you know where to look.

How do I check if I'm being overcharged?

The principle is simple. Find what you pay now, then find what the same company charges a brand new customer today. If new is cheaper, that gap is your loyalty tax.

The trick is that your company's website shows you your account's price, not the new-customer price. A private browser window gets around that. It's the kind of small, fiddly step that's easy to know about and never quite get to.

What's a private browser window?

A private window hides the fact that you're an existing customer, so the website shows the new-customer price instead of yours. We tested this across five company websites: electricity, insurance, internet, phone, and banking. Every one showed a lower new-customer price in private mode than the price our accounts were actually on.

You can open one in a few taps on Chrome (Ctrl+Shift+N), Safari (tabs icon, then "Private"), or Firefox (Ctrl+Shift+P), then look up their current plans without signing in. The price you see is the new-customer price.

That's the comparison. It's not hard, it's just one more thing to remember for every bill, every year. We do this part for you: we find the new-customer price, work out the gap, and tell you what it's worth.

Citation capsule: Checking for loyalty tax doesn't require switching companies or contacting anyone. Opening a private browser window and navigating to your current company's website, without logging in, reveals the new-customer price. If that price is lower than what you're paying, the difference is loyalty tax. This method works for electricity, insurance, internet, and phone plans.

What Do I Actually Do About It?

In most cases you don't even have to switch. Often a single phone call to the right team does it.

Do I have to switch to get a better deal?

Not always. Most companies will match or beat a competitor's price if asked. Retention teams, the people you reach when you say you want to leave, can offer discounts regular customer service can't. That's not a secret. It's just that most people never make the call.

What does that call actually look like?

It's less of a negotiation than you'd think. The whole thing turns on one specific number: the new-customer price, said back to them. Here's a real one.

What we did: we called an electricity company after spotting their new-customer plan was $340 cheaper per year than ours. We told them we'd been a customer for four years, that they were offering new customers the same service for less, and asked if they'd match it. We were transferred to the loyalty team and offered a matching plan within eight minutes.

No skills, no aggression, just a specific number and a plain question. The number is what makes it work. It tells them you've checked, so they take it seriously.

That's also the part we do for you. We find the number, make the call, and if a call won't fix it, we move you to a better plan. With electricity and internet, switching takes about ten minutes and there's no gap in service. With insurance, most companies start a new policy the same day and refund the unused part of the old one. You don't do any of that. You just say yes.

For the numbers behind each sector, see our loyalty tax statistics across all six sectors.

How often does this need doing?

About once a year, timed to each bill's renewal. That's the catch: ten minutes per bill doesn't sound like much, but it's per bill, every year, forever, and it never makes the top of anyone's list. So we keep watch and handle it on the renewal cycle. You stop thinking about it.

Citation capsule: Loyalty tax is legal in Australia and can be resolved through direct negotiation in most cases. Customers who call their company's retention team with a specific competitor price typically receive a matching offer. Reviewing each bill at renewal, and repeating that at the next one, removes most loyalty tax exposure, often without switching companies.

What Is Resunday?

What does Resunday do?

Resunday checks your bills, finds the better deal, and moves you onto it. Electricity, insurance, broadband. You don't remember to do anything, you don't work out what to compare, and you don't make the calls. We do the work. You say yes. Then you stop thinking about it.

Resunday started with a familiar gap. Our electricity bill had crept up to $185 a month while a neighbour who'd just signed up with the same company was on $140. Same company, same suburb, same usage. The only difference was that she was new and we weren't. Nothing out there just sorted it, so we built something that does.

Join the waitlist and we'll take loyalty tax off your plate.

How is Resunday different from a comparison website?

A comparison website hands you a list of plans and leaves the work to you: read them, pick one, do the switch. Resunday doesn't hand you a list. We look at what you're already paying, find the better deal, and move you onto it. The difference is being handed a menu versus the meal turning up sorted.

Citation capsule: Comparison tools present a list of options and leave the switching to the customer. A managed service instead identifies the specific dollar gap between what a current customer pays and what a new customer would pay, then acts on it at the right time, before the next renewal date, so the customer doesn't have to check each service manually every year.

The Short Version

Loyalty tax is real, it's legal, and it adds up. Here's what the numbers look like:

• Electricity: $221/year more after 3 years on the same plan
• Insurance: 34% more in years 2–3 than a new customer pays
• Phone plan: $144/year average overpayment
• Home loan: potentially thousands in extra interest each year (general context only, not something Resunday acts on)

Fixing it usually doesn't take a switch. Often one call, with a specific number, does it. The catch is doing that for every bill, every year, on time. That's the bit that never happens.

So we do it. Resunday keeps watch, finds the better deal, and moves you onto it. You just say yes.

See how much Australians lose in each sector or read the complete loyalty tax guide.

Last updated: March 2026.

signed, resunday.