Card payment sucharges banned in Australia from 2026

[MELso]

Yeah, that 1.7% Service Fee is clearly illegal unless it's included in the displayed price. You should report them.

Price displays

Businesses must display clear and accurate prices, and must not mislead consumers about their prices. There are specific laws about how businesses must display their prices.

www.accc.gov.au

Mind you, restaurants and cafes can apply surcharges as there's a carve out for them from single pricing rules provided the surcharge is 'transparent' (it's been mainly used on weekends and public holidays but has been creeping in more broadly like with forced 'gratuities') so this might be legitimate (if disgraceful)...

(This is the next surcharging rule that should be abolished so we can return to the principle of 'the price you see is the price you pay'.)

 

[SeaWolf]

If it goes through the till then is it illegal? I guess maybe so. But is there a new law to prevent that? Still registers for company tax and GST.

This comes from the, not unjustified impression, that if the business is offering a discount for cash it's probably so they can fail to declare it, for tax evasion purposes.

 

[SeaWolf]

Mind you, restaurants and cafes can apply surcharges as there's a carve out for them from single pricing rules (it's been mainly used on weekends and public holidays but has been creeping in more broadly like with forced 'gratuities') so this might be legitimate (if disgraceful)...

That only applies if the surcharge doesn't apply all the time. The 1.7% Service Fee here would seem to apply always, so it has to be included in the displayed price.

Price displays

Businesses must display clear and accurate prices, and must not mislead consumers about their prices. There are specific laws about how businesses must display their prices.

www.accc.gov.au

The ACCC has an instructive example:

A restaurant charges a 10% surcharge on Sundays, 15% on public holidays and a 5% surcharge Monday to Saturday on top of the prices displayed on its menu. There is no day a consumer can purchase an item at the price that is displayed on the menu, as a minimum of a 5% surcharge applies every day.
In this scenario, the business must include a 5% surcharge in the total price of its items as a single figure. Since a 5% surcharge applies every day of the week, it is now part of the minimum total cost of the restaurant's items.
The additional surcharge the business charges on Sundays and on public holidays must be disclosed by including the words on the menu as stated above.

 

[LondonAussie]

I don’t know if the same thing will happen in Australia, but when the surcharge ban started in the UK, the banks allowed you to submit chargebacks if you got charged more than the advertised price. They would force the business to refund the difference. This made businesses fix any non-compliance “errors” pretty quickly.

 

[Pushka]

This comes from the, not unjustified impression, that if the business is offering a discount for cash it's probably so they can fail to declare it, for tax evasion purposes.

Impressions don't matter, it's what actually happens that counts. A cash discount doesn't mean dodgy tax behaviour. Just a reduced charge.

This place offers a discount for the seniors card regardless of cash or card so are you suggesting that's dodgy too for cash payments? Same principle.

 

[SeaWolf]

Impressions don't matter, it's what actually happens that counts. A cash discount doesn't mean dodgy tax behaviour. Just a reduced charge.

Of course impressions matter, there's a multi billion dollar industry, called marketing, that is all about influencing people's impressions of a business. If people's impression of a business didn't matter they wouldn't be spending so much money on trying to shape it.

 

[kpc]

Just came back from my local Japanese place and coffee place. No price rise (yet) and no surcharges for card payment.

 

[DC3]

Of course, we’ll all get played for fools and prices most likely will rise

 

[SeatBackForward]

Of course impressions matter, there's a multi billion dollar industry, called marketing, that is all about influencing people's impressions of a business. If people's impression of a business didn't matter they wouldn't be spending so much money on trying to shape it.

*cough* Frequent Flyer programs, specifically incentivising the collection of points *cough*.

Of course, we’ll all get played for fools and prices most likely will rise

Ah but the market will sort it out, wont it? you know the same mechanism that assumes we all have access to all information to make an informed decision on supply and demand...That's sarcasm in case it wasn't explicit.

 

[Quickstatus]

Cash discounts are legal,

Yes, but I would not want someone calling the ATO on the basis of the business giving a cash discount.

 

[MELso]

That only applies if the surcharge doesn't apply all the time. The 1.7% Service Fee here would seem to apply always, so it has to be included in the displayed price.

Price displays

Businesses must display clear and accurate prices, and must not mislead consumers about their prices. There are specific laws about how businesses must display their prices.

www.accc.gov.au

The ACCC has an instructive example:

The ACCC is not quite right though, as surcharges are completely exempt from single pricing rules (provided the conditions are met).

Where it breaches the law is not that it applies every day but that it does not specify that it applies every day. There is nothing in the exemption regs that prohibit a surcharge being imposed every day. However, reg 80A of the Competition and Consumer Regs requires each day the surcharge to be applied to be specified.

 

[MelbFlyer]

If more and more places offer a discount of 5% when paying cash, I'd suggest that after a number of years in the wilderness (accelerated by COVID), cash will again become king.

5% of a $200 bill is $10 - Might not seem like much, but akin to paying all those surcharges over the years, it all adds up.

Coupled with lower sign-up bonuses, poorer earning rates and longer blackout periods to qualify for said sign-up bonuses - some credit cards may be in decline.

 

[Pushka]

Of course impressions matter, there's a multi billion dollar industry, called marketing, that is all about influencing people's impressions of a business. If people's impression of a business didn't matter they wouldn't be spending so much money on trying to shape it.

Maybe the impression that a business give a cash discount matters in a positive manner. We aren't talking BHP but the bread and butter businesses I dealt with today.

 

[Pushka]

Yes, but I would not want someone calling the ATO on the basis of the business giving a cash discount.

Not likely an issue though is it because do they even have humans working there anymore to answer the phone? And seriously. Who would actually do this.

 

[Quickstatus]

do they even have humans working there anymore to answer the phone?

Yes they do..

 

[elanshin]

So I'm actually semi baffled at the whole "cash" is cheaper concept for a business. Leaving tax evasion stuff out of the equation, I don't believe cash is as cheap as some business owners think it is.

How many minutes do you spend at the end of the day and start of the day counting cash?
How long does it take to go to the bank?
How much petty cash goes missing? Or even not petty.
How much did securing the cash cost?

Those are all very real costs and if you add it all up, I suspect it might actually be pretty close to what the card surcharge costs are.