Surcharge Sinners: an investigation
Lauren Said-Moorhouse & Amanda Hoh | Chief Editors
Patrick Wright | Radio Atticus
All information presented in this investigation is correct as of June 6, 2010.
Watch video: Behind Australia’s Surcharge Sinners
and send us a tip-off.
Data collected between May 17 and June 6, 2010. View Weekend & Public Holiday Surcharges in a larger map
Restaurants and cafés in Australian capital cities are flouting consumer protection laws and illegally charging patrons on weekends and public holidays.
In May 2009 the legislation of the Trade Practices Act 1974 was amended with Section 53C stipulating that restaurants and cafes are required to incorporate any additional surcharges into the prices listed on their menus.
One way to do this is for restaurants to print a second menu just for weekends and public holidays.
However, from May 17 to June 6, an investigation conducted by Reportage Online and Radio Atticus found that in Sydney alone, over 50 restaurants and cafés are failing to observe the changes to the law.
“This component pricing issue is nothing to do with the rights and wrongs of weekend surcharging but everything to do about how you implement the law,” says Chris Zinn from consumer advocacy group, Choice.
“The ACCC [Australian Competition and Consumer Commission] seems unambiguous about this as to say ‘No asterisks, no small print. You’ve got to have a separate menu with the prices clearly spelt out’.”
During the three-week investigation, the businesses that we found had either a weekend or public holiday surcharge – and no second menu. Instead the surcharge was highlighted at the bottom of most menus with an asterisk.
Listen to the story originally broadcast on Radio Atticus:
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The ACCC is the national body that enforces consumer protection laws like Section 53C.
Deputy chairman of the ACCC, Michael Schaper says, “The ACCC is serious about the law. We act on complaints we get from consumers. We act on our own investigations and advice.
“Interestingly enough, we’ve recently had a look at compliance within the restaurant and catering sector within particular cities and our evidence today indicates that there is actually not a big issue for most industry participants. Something like three-quarters of restaurants that we’ve surveyed in Canberra, for example, are compliant with the new laws.”
In half an hour after the interview with Schaper on June 3, Reportage and Radio Atticus journalists found five restaurants in Canberra’s CBD which failed to comply with the law.
One restaurant, Tosolini’s, had a 20 per cent surcharge on public holidays – the highest we found during the investigation.
Tosolini’s is just around the corner from the ACCC building.
Zinn also says restaurants should be aware of the law change as it has been over a year since the amendment.
“One would have thought the message has been sent out there very clearly. They have trade bodies. They have all sorts of information. So the message should have got through.”
However, manager of the Waterfront Grill in Sydney’s Darling Harbour, Jeremy Sloss, says that wasn’t the case.
“I had a customer dining in our restaurant who said that you are no longer allowed to charge a 10 per cent surcharge. It has to be the same out the front and same price in the menus on a Sunday and a public holiday.
“And we never had any emails sent from ACCC and the Restaurant and Catering Association. We never got a specific email sent to our company in regards to that.”
John Hart is CEO of the Restaurant and Catering Association in Australia. He says it’s not the association’s responsibility to enforce the ACCC’s laws.
Watch the video of our investigation by clicking on the image.
“We are not charged with enforcing the ACCC’s legislation. That is for the ACCC to do. All we can do is pass information to businesses and suggest that that is the way they do their thing. We are not a government agency. We are not an enforcement body. We provide advice to business and that is exactly what we will be doing.”
Hart also says that the ACCC failed spectacularly in consulting the restaurant industry prior to passing the law.
“There was very little information that flowed out on what the requirement was for restaurants particularly. We’d understood at that point that we wouldn’t be included in the net because we thought restaurant menus were exempt from the component pricing requirements.”
“The original rash of information that came out from the ACCC didn’t have any supporting material around what restaurants needed to do,” he says.
But Schaper disagrees.
“In terms of making sure that the industries were informed well in advance of the start date, it’s simply the case that the commission did consult fairly widely and fairly broadly with it,” says Schaper.
Link to the ACCC’s complaints page.
Editor’s note: This investigation was conducted by Reportage and Radio Atticus between May 17 and June 6, 2010.
Any businesses named as not complying with section 53C of the Trade Practices Act, was correct during this period.
Reportage and Radio Atticus are aware that since the investigation ended, some restaurants and cafes have now changed their policies.
Additional reporting by Paul Farrell, Nastasia Campanella, Alex Taylor, Bonnie Yiu, Steve Corner, Kathryn Gall, Amy Yang, Neda Vanovac and Patrick Tombola.
Read the follow-up story: Consumer watchdog takes cafes to court
Interesting report. Perhaps Australian Competition and Consumer Commission can now address this issue properly.
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Interesting report. Perhaps Australian Competition and Consumer Commission can now address this issue properly.
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Interesting report and well done. What does this mean now for when we visit a place that charges the extra? Can we refuse on the grounds that it was not included in the menu price?
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Interesting report and well done. What does this mean now for when we visit a place that charges the extra? Can we refuse on the grounds that it was not included in the menu price?
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The ACCC requirements here are needlessly strict. What is wrong with putting a clearly marked “10% surcharge on public holidays” note on a menu, and/or putting up a sign in the window? Is working out what a certain percentage of your bill is really that hard?
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Nick Evershed Reply:
June 7th, 2010 at 2:51 am
One of the interesting things some people from Melbourne pointed out (don’t think it made it into the story), is that many of the places down there don’t do the surcharge at all. Which makes me wonder if it would just be easier to average out a restaurant/cafe’s extra cost of Sunday/public holidays over the whole week and keep one single menu, rather than having two…
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The ACCC requirements here are needlessly strict. What is wrong with putting a clearly marked “10% surcharge on public holidays” note on a menu, and/or putting up a sign in the window? Is working out what a certain percentage of your bill is really that hard?
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Nick Evershed Reply:
June 7th, 2010 at 12:51 pm
One of the interesting things some people from Melbourne pointed out (don’t think it made it into the story), is that many of the places down there don’t do the surcharge at all. Which makes me wonder if it would just be easier to average out a restaurant/cafe’s extra cost of Sunday/public holidays over the whole week and keep one single menu, rather than having two…
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In reference to Alice’s comment,
As I understand it, you must still pay the bill but you can make a formal complaint to the ACCC.
Lauren Said-Moorhouse
Chief editor
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In reference to Alice’s comment,
As I understand it, you must still pay the bill but you can make a formal complaint to the ACCC.
Lauren Said-Moorhouse
Chief editor
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Interesting investigation.
A bit confused though, if restaurants are still allowed to increase their prices on weekends/public holidays, what’s the difference for consumers? They’ll still be paying the same price whether it be included in a seperate menu or in small print?
Have I completely missed the point?
And what was ACCC’s reason for changing the law?
Thanks.
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Nick Evershed Reply:
June 7th, 2010 at 4:57 am
The rationale behind banning the “fine print” is the assumption that most people would not see the surcharge until after they’ve eaten and go to pay the bill, then finding that their meal costs 5-20 % more than they thought.
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Interesting investigation.
A bit confused though, if restaurants are still allowed to increase their prices on weekends/public holidays, what’s the difference for consumers? They’ll still be paying the same price whether it be included in a seperate menu or in small print?
Have I completely missed the point?
And what was ACCC’s reason for changing the law?
Thanks.
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Nick Evershed Reply:
June 7th, 2010 at 2:57 pm
The rationale behind banning the “fine print” is the assumption that most people would not see the surcharge until after they’ve eaten and go to pay the bill, then finding that their meal costs 5-20 % more than they thought.
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Really interesting stuff. I have been the victim of “fine print” surcharges on way too many occasions. Thinking the $15 in your wallet will cover you for your $14.95 sandwich only to realise you didn’t do the math to add on the extra 10% is a killer. Who wants to be doing maths on a Sunday anyway! While most places say the surcharge is to account for the Sunday loading they pay their staff, I suspect it’s really just an easy way to make a quick dollar. But great investigation reportage!
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Really interesting stuff. I have been the victim of “fine print” surcharges on way too many occasions. Thinking the $15 in your wallet will cover you for your $14.95 sandwich only to realise you didn’t do the math to add on the extra 10% is a killer. Who wants to be doing maths on a Sunday anyway! While most places say the surcharge is to account for the Sunday loading they pay their staff, I suspect it’s really just an easy way to make a quick dollar. But great investigation reportage!
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Great work on the comprehensive coverage and the investigation, it’s all very impressive =) I found it especially interesting that you found incidences of the surcharge applying in Canberra despite the ACCC supposedly cracking down on the “sinners” there.
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Great work on the comprehensive coverage and the investigation, it’s all very impressive =) I found it especially interesting that you found incidences of the surcharge applying in Canberra despite the ACCC supposedly cracking down on the “sinners” there.
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A surcharge would be completely resonable if the cafes were actually paying their staff extra for weekend shifts. I know for a fact that at least a few of these cafes don’t.
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A surcharge would be completely resonable if the cafes were actually paying their staff extra for weekend shifts. I know for a fact that at least a few of these cafes don’t.
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I have complained about this to the ACCC and they did nothing, not even a reply to me.
100% of resraurants in sydney I go to (mostly inner west, manly, northern beaches, city) charge the extra surcharge. Some agree to take it off ONLY if you ask them, explaining the new laws (now one year old!) Others say No, complain to the ACCC.
One bill I did complain to the ACCC, because of the $1000 bill the 10% surcharge was $100! Again, the ACCC did NOTHING but luckily Manly headland the restaurant eventually refunded the money.
Another group bill at a city restaurant resulted in a $90 charge for “groups of over 6″ and when I asked for it to be removed they refused.
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I have complained about this to the ACCC and they did nothing, not even a reply to me.
100% of resraurants in sydney I go to (mostly inner west, manly, northern beaches, city) charge the extra surcharge. Some agree to take it off ONLY if you ask them, explaining the new laws (now one year old!) Others say No, complain to the ACCC.
One bill I did complain to the ACCC, because of the $1000 bill the 10% surcharge was $100! Again, the ACCC did NOTHING but luckily Manly headland the restaurant eventually refunded the money.
Another group bill at a city restaurant resulted in a $90 charge for “groups of over 6″ and when I asked for it to be removed they refused.
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Whenever I’ve complained about it the restaurants seem to be quite ambivalent. In one case the owner said he knew about the change. When asked to have the charge removed he flatly said no, take it up with the ACCC. Turns out he knew something that most people don’t. There are no consequences to those who violate this new change. Restaurants get away with it because they know they can.
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Whenever I’ve complained about it the restaurants seem to be quite ambivalent. In one case the owner said he knew about the change. When asked to have the charge removed he flatly said no, take it up with the ACCC. Turns out he knew something that most people don’t. There are no consequences to those who violate this new change. Restaurants get away with it because they know they can.
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An interesting read! Nice to know that we are being dudded in sydney *shakes fist at restaurants*…I’m sick of paying extra for everything!!
Thinking you guys should go after the public holiday/sunday night surcharge that taxi’s charge next!!
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An interesting read! Nice to know that we are being dudded in sydney *shakes fist at restaurants*…I’m sick of paying extra for everything!!
Thinking you guys should go after the public holiday/sunday night surcharge that taxi’s charge next!!
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Great to see that the Reportage investigation has been taken up by the Sydney Morning Herald with a great follow up story by 2 SER and Reportageonline.com
Don’t miss it on SMH this morning
http://www.smh.com.au/entertainment/restaurants-and-bars/restaurants-flout-ban-on-weekend-surcharges-20100611-y3lb.html
Pity the link to the audio and video at the bottom is not live !
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Great to see that the Reportage investigation has been taken up by the Sydney Morning Herald with a great follow up story by 2 SER and Reportageonline.com
Don’t miss it on SMH this morning
http://www.smh.com.au/entertainment/restaurants-and-bars/restaurants-flout-ban-on-weekend-surcharges-20100611-y3lb.html
Pity the link to the audio and video at the bottom is not live !
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I own a cafe & this is news to me. I have had a few customers say that they didn’t think that this was allowed but I was oblivious until I read this report. We do charge 10% extra on holidays & public holidays & I can guarentee that it is because of the wages. I would love not add a surcharge as to be honest it is not about the mooney. I pay almost $10 more an hour for sundays & over $10 for public holidays for all my staff.
The shear logistical nightmare of changing menus for these days & also the pricing structure on our computer system for one day a week or a public holiday I suspect is the reason that most cafe’s/restaurants have not adopted the changes, that & being completely unaware of them. I do not agree with a surcharge for large groups. This is absolute crap & I even buck when restaurants try & charge this. but have always paid surcharge & all the cafe’s & restaurant’s that are around me charge them too & some charge more for public holidays.
Now that I am aware of this I will have to work out how I implement this & how much it will cost me.
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I own a cafe & this is news to me. I have had a few customers say that they didn’t think that this was allowed but I was oblivious until I read this report. We do charge 10% extra on holidays & public holidays & I can guarentee that it is because of the wages. I would love not add a surcharge as to be honest it is not about the mooney. I pay almost $10 more an hour for sundays & over $10 for public holidays for all my staff.
The shear logistical nightmare of changing menus for these days & also the pricing structure on our computer system for one day a week or a public holiday I suspect is the reason that most cafe’s/restaurants have not adopted the changes, that & being completely unaware of them. I do not agree with a surcharge for large groups. This is absolute crap & I even buck when restaurants try & charge this. but have always paid surcharge & all the cafe’s & restaurant’s that are around me charge them too & some charge more for public holidays.
Now that I am aware of this I will have to work out how I implement this & how much it will cost me.
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Hi Nick,
Thanks for your comment. Feel free to email me if you wanted to talk further about the pros and cons of this law change. I’d like to hear more of your views on it.
patrickwrightfj@gmail.com
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Hi Nick,
Thanks for your comment. Feel free to email me if you wanted to talk further about the pros and cons of this law change. I’d like to hear more of your views on it.
patrickwrightfj@gmail.com
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I just came back from lunch at Umi Kaiten-Zushi, a Japanese restaurant already marked on the google map above. Out of curiosity I asked the manager and was told that there will still be an extra 10% surcharge for the public holiday tomorrow and that is without a separate menu nor of any indication of extra cost!
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I just came back from lunch at Umi Kaiten-Zushi, a Japanese restaurant already marked on the google map above. Out of curiosity I asked the manager and was told that there will still be an extra 10% surcharge for the public holiday tomorrow and that is without a separate menu nor of any indication of extra cost!
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Great work except there is no link to where to report. Make it easy for all of us by including a reporting link!
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Nick Evershed Reply:
June 13th, 2010 at 11:48 pm
Vivian here’s a link to the ACCC’s complaints page, has been added into the article also. Thanks!
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Great work except there is no link to where to report. Make it easy for all of us by including a reporting link!
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Nick Evershed Reply:
June 14th, 2010 at 9:48 am
Vivian here’s a link to the ACCC’s complaints page, has been added into the article also. Thanks!
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I own a restaurant. I think surcharge is bad and stopped. With large group you are making a larger amount of money. Why the extra charge, there should be a discount for any large group. All these restaurants are greedy. People have to realize that they can pay the bill without paying the surcharge and the restaurant cannot do any thing about it. If they are still stubborn just walk out without paying the bill. The restaurant still cannot do any thing to you. They will loose any legal battle. Restaurant is about food and service not to be rip off.
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I own a restaurant. I think surcharge is bad and stopped. With large group you are making a larger amount of money. Why the extra charge, there should be a discount for any large group. All these restaurants are greedy. People have to realize that they can pay the bill without paying the surcharge and the restaurant cannot do any thing about it. If they are still stubborn just walk out without paying the bill. The restaurant still cannot do any thing to you. They will loose any legal battle. Restaurant is about food and service not to be rip off.
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I personally think that having a separate menu on weekends & public holidays is even more deceiving. I’d hate to turn up on Sunday after checking out the menu earlier in the week to realise that all the prices had gone up…
I hate surcharges, but that’s ok coz I couldn’t think of anything worse than going out for breakfast/lunch on a Sunday with the rest of the universe.
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I personally think that having a separate menu on weekends & public holidays is even more deceiving. I’d hate to turn up on Sunday after checking out the menu earlier in the week to realise that all the prices had gone up…
I hate surcharges, but that’s ok coz I couldn’t think of anything worse than going out for breakfast/lunch on a Sunday with the rest of the universe.
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Amazing that another law has been passed and hasent been passed on to the restaurants!!
So many changes have taken place in the industry and so little information about it even the experts are confused..
I love it when the consumer gets to enjoy a public holiday and relax eating good food, problem is they dont want to pay for that experience, while the owner of the business has to try and recope the moneys lost by paying the high cost of staff.
Just to put it out there in 4 years time an untrained 1st apprentice will be worth $40 an hour on a sunday and thats just a first year. how does that work? Ive been doing the trade for 14 years and have never earned that sort of money nor have I ever cared that I didnt.
Now I own my own and worked hard to get there I employ 5 apprentices and 3 chefs I cant see my self in the industry in 4 years time, making those jobs redundant… Unless I charge a 30% surcharge on the weekends. would the consumer be willing to pay up??????
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Amazing that another law has been passed and hasent been passed on to the restaurants!!
So many changes have taken place in the industry and so little information about it even the experts are confused..
I love it when the consumer gets to enjoy a public holiday and relax eating good food, problem is they dont want to pay for that experience, while the owner of the business has to try and recope the moneys lost by paying the high cost of staff.
Just to put it out there in 4 years time an untrained 1st apprentice will be worth $40 an hour on a sunday and thats just a first year. how does that work? Ive been doing the trade for 14 years and have never earned that sort of money nor have I ever cared that I didnt.
Now I own my own and worked hard to get there I employ 5 apprentices and 3 chefs I cant see my self in the industry in 4 years time, making those jobs redundant… Unless I charge a 30% surcharge on the weekends. would the consumer be willing to pay up??????
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My partner works in a cafe and the owner was completely unaware of this. Had received no notification from any source about this and too busy to peruse websites to stumble upon this regulation.
Their cafe charges 10% surcharge for public holidays but not for Sundays. I can confirm that EVERY CENT received as a public holiday surcharge is given to the staff and always has.
The owner will be working towards implementing a “Public Holiday” menu for the next NSW holiday in October.
I personally have no problem in paying a surcharge whether it is added on at the end , after stating that on the menu, or if it is already included in the price of the menu item on the menu.
The fact that some cafe owners do not pass this onto their staff is what should concern most , not how it is collected.
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My partner works in a cafe and the owner was completely unaware of this. Had received no notification from any source about this and too busy to peruse websites to stumble upon this regulation.
Their cafe charges 10% surcharge for public holidays but not for Sundays. I can confirm that EVERY CENT received as a public holiday surcharge is given to the staff and always has.
The owner will be working towards implementing a “Public Holiday” menu for the next NSW holiday in October.
I personally have no problem in paying a surcharge whether it is added on at the end , after stating that on the menu, or if it is already included in the price of the menu item on the menu.
The fact that some cafe owners do not pass this onto their staff is what should concern most , not how it is collected.
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This is a sad state of affairs that the bureaucracy of ACCC would add a further complication and cost to F&B operations. You are asking the cash register systems to have 2 prices, to then automatically change on the weekend, ensure menu’s don’t get mixed up and have twice as many menu folders, producing 2 lots of menu’s!!! How ridiculous. Small print – seriously does this mean you can’t read it??
The other sad state of affairs is the small percentage of consumers who find the surcharge a problem. It is really simple don’t want to pay, don’t come…It is dumb founding when wage cost can be 40% of revenue that those ignorant to what it takes to run a restaurant would comment, I am not a lawyer so I don’t tell people how to prosecute people, why do the consumer always think they know what is best for an industry if at most they may have worked at Maccers when they were 16.
Please point out the huge number of millionaires from owning restaurant business…maybe look at those in finance or banking industries producing huge profits rather than those who work 7 days a week, breakfast, lunch and dinner.
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This is a sad state of affairs that the bureaucracy of ACCC would add a further complication and cost to F&B operations. You are asking the cash register systems to have 2 prices, to then automatically change on the weekend, ensure menu’s don’t get mixed up and have twice as many menu folders, producing 2 lots of menu’s!!! How ridiculous. Small print – seriously does this mean you can’t read it??
The other sad state of affairs is the small percentage of consumers who find the surcharge a problem. It is really simple don’t want to pay, don’t come…It is dumb founding when wage cost can be 40% of revenue that those ignorant to what it takes to run a restaurant would comment, I am not a lawyer so I don’t tell people how to prosecute people, why do the consumer always think they know what is best for an industry if at most they may have worked at Maccers when they were 16.
Please point out the huge number of millionaires from owning restaurant business…maybe look at those in finance or banking industries producing huge profits rather than those who work 7 days a week, breakfast, lunch and dinner.
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My husband and I own a restaurant in WA and had ZERO knowledge of this till recently. We are a small Family run place with a few casual staff and we have to pay over $27p/h to our seniors on sundays – hence why we had a % surcharge.
We read the small amount of info on the ACCC website and it says it cannot be a % surcharge.
One example explains we can have a per head set amount charge as it is up front advised and does not increase as the bill does – as per a % surcharge.
We chose to close sundays as on a normal standard weekend cannot afford the extra amounts for wages on Sundays since they change those rates in the awards too and only open the sundays during school hols/long weekends when we know we will be busy.
On the last Sunday we opened we charged $5 per adult surcharge which they were advised of when making a booking and on arrival and also upon seating and we had not one issue with any of our customers. They actually preferred that over a % surcharge.
The new law changes and also sunday 25% incresed casual wages to the previous weekend rates has caused many small businesses to reaccess there opening days, as did we. We will end up with sundays being Ghost towns in tourist regions like ours!
FOOD FOR THOUGHT!!!!
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My husband and I own a restaurant in WA and had ZERO knowledge of this till recently. We are a small Family run place with a few casual staff and we have to pay over $27p/h to our seniors on sundays – hence why we had a % surcharge.
We read the small amount of info on the ACCC website and it says it cannot be a % surcharge.
One example explains we can have a per head set amount charge as it is up front advised and does not increase as the bill does – as per a % surcharge.
We chose to close sundays as on a normal standard weekend cannot afford the extra amounts for wages on Sundays since they change those rates in the awards too and only open the sundays during school hols/long weekends when we know we will be busy.
On the last Sunday we opened we charged $5 per adult surcharge which they were advised of when making a booking and on arrival and also upon seating and we had not one issue with any of our customers. They actually preferred that over a % surcharge.
The new law changes and also sunday 25% incresed casual wages to the previous weekend rates has caused many small businesses to reaccess there opening days, as did we. We will end up with sundays being Ghost towns in tourist regions like ours!
FOOD FOR THOUGHT!!!!
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how ridiculous…..weekend and public holiday surcharge has been around for years and years .Unless you have been living in a cave or never been out before its part of the industry.And why not restaraunts an cafes owners work very hard pay enormous rents has any of you customers ever complained how much rent their paying in some places forget about staff pay wat about vegies and meat and greedy landlords blackmailing restaraunters with rent increases do you now all that stuff too .wat about councils on big events cashing in on allowing every jo blo to sell food and drinks while these restaraunts have been waiting all year for these events .give me a break.acc or watever their called should stop these big banks credit istitutions from ripping people off every day why are we charged bouncing fees and now everyones charging late fees even schools are now in the act.catch these shonfs first.We all know you go to arestaraunt on sunday or public holiday you pay a charge it s been roun for yonks.wat anightmare for rest. and cafes 2 menus wat about the computer systems how ? and wat for their still going to collect so does it matter ????? Or we have nothing better to do than winge and sound so ignorant
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how ridiculous…..weekend and public holiday surcharge has been around for years and years .Unless you have been living in a cave or never been out before its part of the industry.And why not restaraunts an cafes owners work very hard pay enormous rents has any of you customers ever complained how much rent their paying in some places forget about staff pay wat about vegies and meat and greedy landlords blackmailing restaraunters with rent increases do you now all that stuff too .wat about councils on big events cashing in on allowing every jo blo to sell food and drinks while these restaraunts have been waiting all year for these events .give me a break.acc or watever their called should stop these big banks credit istitutions from ripping people off every day why are we charged bouncing fees and now everyones charging late fees even schools are now in the act.catch these shonfs first.We all know you go to arestaraunt on sunday or public holiday you pay a charge it s been roun for yonks.wat anightmare for rest. and cafes 2 menus wat about the computer systems how ? and wat for their still going to collect so does it matter ????? Or we have nothing better to do than winge and sound so ignorant
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