How often have you seen the words "10% surcharge
applies on Sundays and public holidays" at the very bottom of
a cafe or restaurant menu?
I think every cafe in Sydney does it. I've come to
expect it. Did you know it's illegal?
The Australian Consumer Law (which applies throughout Australia)
says that traders are not allowed to state a price for a good or
service if that price is only part of the price for that good or
service, unless the single price (being the minimum total cost) of
the good is also displayed in a prominent way.
In other words, traders must advertise the full price (including
any surcharge) as prominently as the pre-surcharge price.
So, if my local cafe wants to charge me a 10% public holiday
surcharge because I like to enjoy a double shot flat white (normal
price $4) and eggs Benedict ($15) on the Queen's big day, they
have to display the prices as $4.40 and $16.50 – they
can't just say "plus 10%" down the bottom.
Awkward, but it really means they need to either display both
prices or have two menus. No wonder none of them comply
Traders are not required to include in a single price things
such as optional extras. This is because extras do not form part of
the minimum total cost of the item.
What you need to know
These laws only apply to businesses supplying goods and
services to consumers.
Surcharges are legal, but must be included in the single total
The single total price must include all charges payable by the
consumer to purchase the good or service (including booking fees,
administration fees and all taxes and charges imposed on the
supplier by law).
And yes, you can refuse to pay the surcharge at your local if
they haven't complied.
Questions? Give us a call.
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In some cases these fees or surcharges are higher than what a bank charges to these merchants for use of the system.
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