We’ve been hearing about an increase in restaurants and cafes adding on a surcharge recently and if you have come across this you should be aware of the rules around surcharges.
We commonly see surcharges added during public holidays or weekends as restaurants must pay their staff penalty rates so they may choose to pass on these extra costs to you.
Food businesses are generally allowed to set their own prices, and we understand why they may choose to add a surcharge – staying afloat is tough, but paying a surcharge should never come as a surprise to you.
As a consumer, when you go to a restaurant or café, you should be made aware of any surcharges, and it must be displayed in an obvious way, so you are aware of it before you decide to order or buy any items.
This could be as simple as a sign on the door of the business that clearly states there is a surcharge on food.
Another way is for the business to add wording on the menu or price board that says there’s a surcharge. This statement must be easy to see and noticeable, so every customer knows the price displayed for each item will not be the final price charged.
If your local restaurant or café fails to let you know your food is going to cost a little more this may be a breach of the Australian Consumer Law.
There’s no limit on what the surcharge could be, but it should reasonably reflect the additional costs a business might be incurring, and if it doesn’t, it could be challenged.
If a restaurant is adding on a credit card surcharge, this is different. They can only charge what it costs to process the payment on card. This would be for bank fees or terminal costs, and they must be able to prove those costs.
A lesser-known rule for restaurants and cafes to keep in mind is that if there is no other way for someone to pay without incurring a surcharge, then the business must include that fee in the displayed price.
For example, as a restaurant owner, you charge $5 for side of hot chips, but you do not accept cash so that means all card payments will have a surcharge – then it is not possible for your customers to buy those chips for $5. If the surcharge is 1% then the price displayed must clearly be $5.05 so a customer can easily tell exactly how much the side of chips cost.
Passing on the cost of processing debit and credit card payments is not mandatory for businesses, and many incorporate these costs in their overheads.
However, it’s important to note that from October 1, 2026 the Reserve Bank of Australia will ban surcharges on debit, prepaid, and credit card transactions.
Remember, purchasing goods or services is entering into an agreement with a seller. You do not have to agree to make the purchase if the payment methods or final price aren’t acceptable to you.
Surcharges must be clearly disclosed upfront and must not be misleading or deceptive. If you feel you have been misled by a business about surcharges, have a chat with the owner or manager first about it and see if they can help rectify it.
For further information or advice, contact Consumer Protection on 1300 30 40 54 or email consumer@lgirs.wa.gov.au
