STALLHOLDERS are demanding a full refund of the 10 per cent levy charged by Hobart City Council for Taste of Tasmania transactions.

They say widespread failures in the cashless transaction system have cost them thousands of dollars.

An explosive five-page open letter signed by 38 stallholders outlines a litany of errors attached to the use of the Commonwealth Bank Albert hardware system and software providers Black Label Solutions and Surefire Systems Pty Ltd.

The letter was delivered to the Hobart City Council acting mayor Ron Christie, Premier and Tourism Minister Will Hodgman, Local Government Minister Peter Gutwein and State Growth Minister Matthew Groom yesterday.

Led by Barringwood Estate owner Neville Bagot, stallholders cited numerous and widespread discrepancies that ranged from $1200 to $4500 between transactions and settlements.

The stallholders questioned the traceability of financial data, queried the viability of swapping terminals by CBA and HCC representatives, and described the loss of thousands of dollars in sales because of connectivity failures and voided transactions.

“The stallholders request a refund of the full 10 per cent levy paid by each stallholder as a consequence of the system failures, their impact on our costs and lost sales,” they stated.

Ald Christie said the council would not refund the levy but would honour every transaction where stallholders could prove they were out of pocket.

“We will honour every dollar lost from stallholders, every void transaction, but we will need proof of transactions,’’ he said.

Meanwhile, the council’s auditors are combing through transactions and waiting on the final response from the CBA, Black Label and Surefire before it responds to the stallholders later today.

Ald Christie said glitches were expected with the cashless system.

He said the cashless system was introduced as an alternative to charging entry to the Taste and as a means of council recouping some of the $2 million in costs in running the Taste.

“It was the stallholders who asked for the system,” he said.

The stallholders stated in the letter that they were “passionate supporters” of the Taste and took part in this year’s cashless system in good faith.

They have not ruled out taking legal action, stating that individual stallholders will not be stopped from raising the issues with other parties and that they reserve all legal rights.

Fish Bar owner Mike King, who did not sign the letter, said the request for the levy refund was reasonable and would be met with “universal support”.

Mr King said he has yet to see the last two nights of his Taste takings which have not been put into his business account.

“It was system that had not been tested and has come at a great cost to everybody,’’ he said. The system was “an embarrassment to council” and it may be responsible for costs incurred by council, he said.

“We were looking forward to using it and thought it had a great deal of merit, but the benefits were outweighed by the negatives.”

Willie Smith’s Organic Apple Cider co-owner Sam Reid said there were always going to be teething issues with the new system.

“Overall the event benefited because there was no entry fee for the punters,” he said.

A CBA spokeswoman said the bank was pleased with how the hardware of the Albert system worked at the event and feedback from festival-goers had been overwhelmingly positive.

“As the first cash-free festival of its size there were of course some lessons on how we can improve the system for all involved,’’ she said.

“Now that the festival has finished, we understand that council is working with the software provider to reconcile accounts for stallholders and check them for accuracy. CBA continues to support council by providing data for that to occur.”

Festival Mushrooms John Caire, a strong supporter of the cashless system, said it was “problematic” but remained positive about the concept.

“Sometimes technology doesn't work as well as it should but I am happy with the council’s response.”

Stallholders said comments made by council Taste spokesman Ald Damon Thomas that there was no overall problem with the system and that hundreds of inexperienced staff and 16 new stallholders were compounding the problem were “defamatory to stallholders and staff and false and misleading”.

At a press conference Ald Christie said the Taste was the most innovative festival of its kind in Australia.

“Sure when I say innovation comes some technological glitches. We’ve had a few glitches, we’re going to deal with those. But this is a first for Australia, and Hobart we can be proud,” he said.

When asked how much money the council would make from this year’s Taste he replied “how much money are the rate payers going to make — because that’s what we’re talking about here’’.

He said he would like to make $600,000.