It's Still Illegal For Restaurants To Quote A Sunday Surcharge

The Christmas break is quickly approaching, there are a stack of public holidays during that time, and the odds are good that you'll eat out more often than usual during that period. Remember this: it's illegal for restaurants and cafes to display a message saying something like '10% surcharge on Sundays and public holidays'. They can charge more on given days, but they need to display the total price of each item on the menu.

Image courtesy of Shutterstock

While I still encounter this message quite regularly on menus, displaying such a claim leaves the establishment open to being prosecuted. That has been the case since mid-2009, when the Australian Competition and Consumer Commission (ACCC) introduced laws around component pricing. Those laws meant that any promotion or advertising for a service had to prominently display the total price, not just elements of it. That included restaurant menus: if you had to pay 10 per cent extra just to cover public holiday costs, the restaurant needed a separate menu indicating those prices.

The ACCC left the laws in place for more than a year in order to give food establishments time to adjust, then began busting restaurants which consistently refused to play by the rules. While some restaurant operators grumbled about the extra cost, the law remains in place (and on a national basis). If restaurants want to charge more for dishes on a public holiday or Sunday, they need to produce menus that display the total cost. A sign which says 'X% surcharge', no matter how prominent, isn't sufficient.

It's worth restating that point because there appears to be a belief in some quarters that this isn't the case. In a post on Lifehacker earlier this year discussing dodgy retailer behaviour, one commenter seemed convinced that the situation had changed:

The law was changed back to the original law. They can now put the percentage surcharge at the bottom. The extra cost with new menus was sending some cafes broke. And since it was only a new law, business owners could have had a claim against the Government for making their costs higher once they started their business.

Every element of this claim is nonsense. The law hadn't altered at that date, and still hasn't changed now, as you can quickly confirm by checking the relevant FAQ on the ACCC site. The notion that governments can't ever introduce laws that change business costs for fear of being sued is equally specious.

So for now, the rules remain the same. I suspect you won't have to go far in your neighbourhood to find a cafe or restaurant ignoring the ruling, but there's no question that any such establishment doing the wrong thing in the eyes of the law.

A change may come

The law as it stands is clear, but a change is being considered. Early in December, Treasury announced a review of the consumer law that would change the relevant rulings to allow surcharges to be quoted on menus in this way. That followed a Productivity Commission report which suggested the law be eliminated to help reduce business red tape.

Submissions commenting on the proposed draft amendments are open until January 18. At some point after that date, it's possible that the law will be altered, and cafes and restaurants will be allowed to use surcharge statements. However, that may not be the top priority for anyone in an election year. And with Parliament not sitting until February, we can safely say that for summer 2012/2013, surcharge signs remain illegal.

Lifehacker's weekly Loaded column looks at better ways to manage (and stop worrying about) your money.


Comments

    This was good to read. I haven't seen a Sunday surcharge in years, but since this applies to any surcharge, I think it's something I'll try to remember next time someone tries to pull this off.

    Last edited 11/12/12 3:10 pm

      Agreed, one of the more interesting local reads lately from LH.

      One particularly annoying point:
      "The extra cost with new menus was sending some cafes broke"
      If a cafe is so poorly managed that having extra menus for the additional day is sending them broke and they still insist on both opening on Sundays and charging a premium for it, they deserve to go bust.

        There was an article in one of the local Logan city newspapers late last year (Can't remember if it was The Reporter or Albert & Logan news) that was talking about how tough the law was. Spoke to 2 former owners that lost their restaurant due to the higher costs, and others that said they had to cut staff to cover the costs.

          Just because they say it, doesn't make it true.

            Indeed. Squeeky wheel

    Does this also apply to credit card surcharges?

      Or Jetstar's $17 "processing" fee on CC? Frigging ridiculous, $17 for a computer to do it automatically, vs free if you do direct deposit (would assume would be harder to reconcile).

        Credit charge surcharges don't fall under the same law because you don't have to pay them under all circumstances; there are ways of avoiding them, even if they aren't ways that appeal to you personally.

          Fair call - just feeling particularly ranty about it.

          Continue on with real discussion!

          Then what about booking companies like Ticketek who will advertise tickets to an event for, say, $50, then when you go to pay you get the choice of getting tickets mailed to you ($10 delivery fee) or picking up from an outlet ($10 handling fee), plus something like 3% credit card fee when the only option is paying by card.

            -

            Last edited 17/09/13 9:34 am

              It's not a free option because that's how Ticketek makes money. TicketTek don't run the events themselves

                Nah, if this were the case they'd be running for charity. Ticketek take a huge cut of the price of a concert ticket.
                In fact, done bands won't play Ticketek venues because they lose too much.

        Or movie ticketing sites charging $1 processing fee, *per ticket* even though it's one transaction

      From the ACCC:

      "The answer to this question depends on whether you provide other payment options.

      If a consumer has the choice of paying by credit card or by some other method (e.g. cash or eftpos), the credit card surcharge is an optional extra that does not need to be included in any single price representation.

      However, if the only payment method you offer is by credit card, the 3 per cent surcharge will be a quantifiable component that must be included in the single price because the consumer cannot avoid paying it.

      As in question 2, if the surcharge is captured by the requirements of s. 48, you need to ensure you do not mislead or deceive consumers about the surcharge and its application."

    Yeah, right. Let's see how far you get challenging the pricing when you visit on a weekend or public holiday, at an establishment that has a weekend/public holiday surcharge.

    It may be technically illegal, but this doesn't give you the right to be an idiot about it. Either accept the terms in good faith, or just don't eat there.

      You have the right to dispute an illegal charge on your bill.

      Australian Consumer Law is designed to protect the consumer against unfair practices by businesses. Whether you think this is such a case (and it does seem a bit of a stretch) businesses still need to obey it. They really have no excuse for not following the law, and they are the ones to blame if they do, not the consumer.

      If the business in question was doing something truly dodgy a consumer would have every right to take them up on it and expect them to follow the law. Just because one or both parties doesn't agree with a particular rule doesn't make the case any different; you still need to follow it. Trying to tell a customer to get over it when the company is in the wrong IS dodgy behavior.

      Having said that, you are right that the restaurant won't just let you not pay it. Being right doesn't always get you far.

        I suspect if you just refused to pay the surcharge, they'd be boned. They can't call the cops on you because the charge wasn't legal.

          I imagine they would simply refuse to accept your payment as it is not the full amount.

            And when you go to leave after attempting to pay they...?

      If you are made aware of the surcharge in advance and still proceed to eat there, then you are legally obliged to pay it. The restaurant can be prosecuted for misleading advertising but that is between the ACCC and the restaurant. But small print on the bottom of the menu may not equal being made aware since it's not a reasonable expectation that patrons will read it.

        The advice for consumers from the ACCC centers on the specific price given:

        Traders are required to provide you with a single cash price for the products or services they offer. The single price means the minimum total cost that is able to be calculated at the time the representation is made.
        The single price must be clear at the time of the sale and the most prominent price displayed.

        Basically, you have to pay the actual price quoted when the offer is made. If that price includes the surcharge, you have to pay. If not, you don't. The Consumer Guarantees list grounds where a customer can pay for only part of a service if they believe there is something wrong.

      I have. I felt like an arsehole doing it, but I got really riled up when the bill was 10% higher than expected and they snootily pointed to the line on the bottom of the last page of the menu.

      They backed down because they could see I was furious (stupid, I know) but I felt like a tiny, tiny person for doing it.

    Far more toubling is that fact that someone seems to have filled those poor boys' glasses with ice cream or shaving foam!

    Any advice on disputing this? If you refuse to pay the surcharge and they insist you pay it's going to be a tricky situation. I doubt quoting parts of the act will help much when you're talking to a establishment that's been doing it forever.

    It the restaurant has a sign and points it out before you order I don't have an issue with this. I understand our labour laws in Australia often require businesses to pay higher wages on these days so it's understandable to pass on the extra charges. Forcing them to re-print special menus for the odd public holidays or penalty rate days will simply push up the prices further so instead of us consumers pay say a 10% extra we now have to pay 15% extra as an example... red tape is becoming rather crazy in this great country of ours.... Hopefully this law is changed and for you who don't like it or agree with it simply don't go to restaurants that charge it or stay home!

    OR perhaps we should say you work in the hospitality industry which means public holidays, weekends are standard working days... NO extra pay, just standard wages on any day that would solve it all and be fair I believe... If I chose to work in the hospitality industry I should expect to have to work weekends and public holidays as I did many years back (there was no extra pay back then and I was happy to do the work and have a job)

    Just my 2 cents worth...

      I've worked in the hospitality industry for about 3 years out of the past 10, and my partner has worked in it for the last 7. We have never been paid extra on a public holiday or a Sunday.

        Hi Gus

        Thanks sharing, it's good to see, I take it the business you work for also does not charge extra for these days either then I hope? (if they don't that's great and it's how I believe it should be, if they do charge extra but don't pay the staff extra then I would not agree with it)

      I didn't know that printing menu's was such an expensive exercise? A chain will likely have menus professionally printed on behalf of franchises so the cost is easily rolled into franchise cost, but a lot of small businesses use an inkjet or you can print at officeworks for much less, 10c per page kind of thing. The kind of places that this affects the most effectively have negligible printing costs. Laminating, embossing, gold highlights, and hard bound books are all additional cost above and beyond that is realistically needed for those dozen or so public holidays a year.

    FFS, just follow the "don't be a douche" rule. If you eat at a restaurant on a public holiday and you're aware of there being a surcharge, even if the individual prices on the menu haven't been changed to reflect that, then just pay the surcharge. You don't have to be a genius to mentally add 10% onto the prices as you're looking through.

    However, if there are no signs or notices informing you of a surcharge, and you get charged one, then you have a case to kick up a fuss.

      Except of course that the restauranteur doesn't follow the "don't be a douche" rule when it comes to passing that 10% on to their staff who have given their time on a public holiday with no extra remuneration.

        How does changing the prices on menus to reflect a surcharge affect whether or not a restaurant passes said surcharge onto their staff? Restaurants not informing customers of a surcharge and restaurants not paying employees extra are two separate issues.

          Because it's a "douche move" to increase prices for patrons when there is no increase in running costs or extra remuneration for staff. So no, these aren't 2 separate issues. It's profiteering.

          The comparison I drew was with both of those things being a douche move.

    The worst thing in my experience with Sunday surcharges, or public holiday ones, is that they are usually at restaurants or hotels that don't actually pay their staff a single cent extra to work on these days!
    So why am I paying more? For the non existent increase in wage costs? Or the non existent increase in electricity prices on that day, or the non existent increase in the price of the food they've ordered from their wholesaler?
    So before someone chimes in saying not to eat there on the days they charge the surcharge, I wouldn't anyway.

      I think you'll find most restaurants that charge a surcharge do pass on extra pay (or with friends and family I know of that still work in hospitality that is the case)... Some friends also work in retail and get extra pay for working on Sundays (which I don't agree with as there is always students and people that want to work weekends for standard pay)... these stupid wage rules just push prices up for us all and put unneeded stress on businesses especially in times like we are in at the moment...

      If the restaurant you work in charges extra for public holidays to customers but does not pass on any of that to you it's something you need to talk to them about... I don't run a restaurant so I'm not sure what other extra charges they would have and the reasoning for it but generally most businesses would not just charge extra unless there was a reason (I did say generally as there is always idiot bosses out there as well I know!)

    The "10% public holiday surcharge" notice is a fairly common fixture in Mackay, Queensland. Just another reason to love the Australian backwater...... Unfortunately, several of the offenders were places at which I was a regular, and I didn't want to invite bad karma, so I paid it without complaint every time.

    It's the percentage surcharges that are illegal as the ACCC deemed customers too dumb to be able to work out a percentage. A fixed rate per person is still legal e.g. $5 surcharge per person on Sundays and Public Holidays - though I've only seen it a couple of times.

    Look its not illegal to charge more on particular days you just cant say 10% extra. So really its not a big deal unless they don't disclose that prices are higher on those particular days. Change the laws to make it easier for small business. Lets be honest no one follows the laws anyway right?

    Fasting on the sabbath for everyone - god's wrath appeased - no charge related restaurant issues - problem solved - Amen.

    Wouldn't it be easier to just increase your regular prices by 1.43% overall? If the margin is so sensitive that such a small amount would impact on the ability to operate, the issue isn't the price, it's the business model, surely?

Join the discussion!

Trending Stories Right Now