The restaurant surcharges you need to watch out for

Even during a period of belt-tightening, it seems as though many of us can't resist the draw of a takeaway coffee or dinner out.

Despite a slight dip month-on-month, Australians still spent $5.1 billion at restaurants, cafes and on takeaway food services during October, the latest Australian Bureau of Statistics' retail spending figures show.

That's not to say that eating out is necessarily cheap though, as the price of food and drinks has not been spared from the pressures of inflation.

However, while diners may be happy enough to stomach the higher cost of their meals, they may be less thrilled by the variety of surcharges and other non-food-related costs that are becoming part and parcel of eating out.

So can these surcharges and other fees be avoided? Are eateries actually allowed to pass these on to customers? And how do patrons need to be alerted to additional costs? Read on as we take a look at some of the more common charges in more detail.

Card surcharges

Debit and credit card surcharges are by no means unique to cafes or restaurants, but they can still prove an unwelcome addition to any bill.

It's perfectly legal for businesses to pass on the cost of certain card payments to customers though, as long as they aren't excessive and are reflective of the true cost. The Reserve Bank estimates that the average cost for businesses to accept card payments is under 0.5% for eftpos, 0.5% to 1% for Mastercard and Visa debit and 1% to 1.5% for Mastercard and Visa credit.

"I think it's fair enough that businesses charge a credit card surcharge because there is a cost to accepting plastic," says Consumer Campaigner, Christopher Zinn.

"But as we all move towards different payment systems, there is also a considerable saving in terms of money, time and security for the merchants in accepting plastic. In fact, more and more places, such as cafes, will not accept paper money - and we're going to see more of that."

So, can restaurant or café patrons avoid card surcharges at the till? Cash is certainly one option to do that, but as Zinn points out, many businesses are moving away from cash.

What businesses do need to do, if there's no option to pay without a surcharge, is display products with the minimum cost of the surcharge included. For instance, a café selling a muffin for $5 would need display the price as $5.15 if the lowest surcharge available was 15 cents while using a debit card.

Services fees and industry surcharges

Card surcharges are likely to be the most common additional cost café and restaurant customers will face, but it's not unheard of for some businesses to charge more obscure fees.

In one recent case, a patron at Bavarian Beer Café on the Sunshine Coast shared a copy of their receipt after a dinner out which included a $5.35 'industry service charge' - a charge which the company later clarified was to cover the cost of inflation and COVID-related hardship.

While it's unclear where and how prominently this fee was displayed, in general, unavoidable fees are not something that can be sprung on customers at the checkout.

"Businesses under the Australian Consumer Law should not mislead consumers on the price of good or services, including any unavoidable or pre-selected additional charges that might apply to the transaction," says a spokesperson for the Australian Competition and Consumer Commission (ACCC).

"Any unavoidable or pre-selected additional fees or charges should be disclosed upfront, this includes any surcharges or taxes that might apply to the transaction."

Weekend and holiday surcharges

As the Christmas and summer holidays draw closer, it's worth bearing in mind that if you venture out for a bite to eat on a public holiday there's a good chance that you will receive a more expensive bill than usual as a result of a holiday surcharge.

Of course, not all cafes and restaurants surcharge on special days - some may choose to average out the cost of higher wages in their prices throughout the year. But it's not uncommon to see a 10% or 15% surcharge on public holidays or even weekends.

Businesses are allowed to do pass on surcharges on special days in order to cover additional salary costs, but unlike card surcharges which need to be displayed in the price if they are unavoidable, there's a special carve out for restaurants and cafes explains Zinn.

"They have got to print it, so often it will be on the menu. But it's not always at the top of the menu, which means you have to look for it. But generally, in my experience with smaller cafes anyway, it's better to tell people clearly at the beginning rather than annoy them at the end of the transaction."

No-show and cancellation fees

The pandemic has certainly thrust cancellations into the spotlight in a more prominent way, with COVID-related drop outs causing havoc for businesses in the hospitality sector over the past two years.

As a result, more restaurants and cafes have begun to introduce cancellation charges to cover at least a portion of the costs they may have to wear if customers either don't show up, or cancel at short notice.

Are these enforceable though? According to Consumer Affairs Victoria, businesses can charge fees for cancellations, as long as they are clearly laid out to the customer and not excessive - they should, for instance, reflect the reasonable costs associated with actually making the booking.

Do you have to leave a tip?

To be clear, a tip is not a surcharge or fee. However, as more businesses move towards automated tipping models whereby customers have to actively choose whether or not to give or decline a tip, it's worth asking whether tipping can be made mandatory.

"If you get service that you regard as above and beyond the call of duty then it's fine to give a tip - that's been our system for a long time," says Zinn.

"But now, the onus of responsibility has switched. It used to be that you chose to give a tip, but now you have to choose not to give a tip. At the moment it is 'would you add on a 10% gratuity?', but we could end up with a screen that says, 'we've added 10% but you can withdraw if you wish.'"

In a publication on restaurant tips, the Australian Taxation Office (ATO) does make it clear though that in addition to paying for a meal, customers do have the option of including a tip. However, that tip is "purely voluntary" and if it's given to an employee for their service, it must go to that employee rather than to the business.

You can find more information on how Australian businesses need to showcase their prices by visiting the ACCC's price display guide, or check out our related piece on whether businesses are legally obliged to offer no-cost payment options to their customers.

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