Card Payment Surcharges Banned in Australia from 2026

[kookaburra75]

Ironically many hospitality businesses open all
Weekend, apply surcharges for the privilege of dining there and then close Monday or Tuesday or both. So the weekend must be a lot more lucrative for them and so much so they can afford to close for 1-2 days each week.

Not quite. The volume of trade on the weekends is high enough to justify opening, as that's when people choose to go out. With Mon and Tue being low volumes of trade, it's not worth opening as there is a fixed base cost per day to operate a business. A lot of cafes and small restaurants it's between $3,000-5,000 per day. Hence why movies have tight-cough Tuesdays to try and lure people in, as they trade seven days a week.

The other factor I think people may be overlooking, is that many of the employees in the hospitality industry (and why everyone is picking on that sector I have no idea) are young people and it's their first chance to get into employment and deal with people. The weekends is of course the only 'free' time they have to work, so again, the weekend trade is a focus. No weekend trade from small business, no opportunities for young people. Sometimes it's more than just the cost of your coffee or other hypothetical beverage of choice.

 

[MelbFlyer]

Why though? Interchange has reduced so their card processing fees have reduced.

Perhaps I'll re-phrase.

Let's say a plate of pasta is now $30 - when it inevitably increases to $31-$32, that weekend surcharge of say, 10%, will then increase from the current $3 to $3.1-$3.2).

The removal of surcharges has to be absorbed somewhere else - it will be the price of the goods themselves.

 

[dairyfloss]

I don't believe it is, the only reason that there is a higher penalty rate on Sunday to Saturday is a Christian one.

Its not the only reason it may be hard to convince staff to work the day. As a former weekend retail worker (late teens, early 20s), the extra money for Sunday amongst those I knew was considered compensation for coming in with a bigger hangover than other days. Sunday typically > Saturday, which was > Weekdays.

 

[esseeeayeenn]

80-90% of restaurants here in Melbourne charge weekend surcharges, whether it be just Sat or Sun, or both.

Now with CC surcharges gone, I'd expect those x% weekend surcharges to go up in-line with regular pricing.

A surcharge on Saturday night is absurd.
It's the busiest and most profitable night.
Most restaurants would be getting at least three if not four sittings out of each and every table.
It's shameless gouging.

 

[Pushka]

Why though? Interchange has reduced so their card processing fees have reduced.

But they can't push those fees on to the customer now and award rates push up the price.

 

[transpactraveller]

Not quite. The volume of trade on the weekends is high enough to justify opening, as that's when people choose to go out. With Mon and Tue being low volumes of trade, it's not worth opening as there is a fixed base cost per day to operate a business.

So they should probably have a Monday & Tuesday surcharge if their costs are higher than their revenue on those days.

 

[Mr_Orange]

But they can't push those fees on to the customer now and award rates push up the price.

They shouldn't need to because the card acceptance fees should already have been built into the business model!

 

[Pushka]

They shouldn't need to because the card acceptance fees should already have been built into the business model!

They were. That model passed them on to the customer. Entirely legitimately.

 

[drron]

A surcharge on Saturday night is absurd.
It's the busiest and most profitable night.
Most restaurants would be getting at least three if not four sittings out of each and every table.
It's shameless gouging.

And anyone who thinks that they should get rid of penalty rates will have the unions down on them like a ton of bricks.

 

[downgraded]

As someone said above, the concept of penalty rates (except perhaps public holidays) is defunct. There's plenty of people who want the sat/Sun shifts for convenience rather than inconvenience that there's no justification for paying a premium for the labour or the goods. There's too much squeeling with no reasonable justification.

 

[Pushka]

As someone said above, the concept of penalty rates (except perhaps public holidays) is defunct. There's plenty of people who want the sat/Sun shifts for convenience rather than inconvenience that there's no justification for paying a premium for the labour or the goods. There's too much squeeling with no reasonable justification.

That isn't the way of Australia right now and it can't be wound back.

 

[drron]

Monday this week was a Public Holiday.
Our favourite restaurant is one of 3 owned by the same family. They were closed for the PH.
So we went to a new restaurant we wanted to try. It has only opened for 3 months and although it and the original restaurant are owned by one family the second restaurant is run by a manager. Had a little chat. The wage bill for the public holiday is $500 an hour. Average main is $45. So need to sell 11 mains each hour just to pay wages. Then add the other costs particularly the lease which is not cheap being on the waterfront. So they had a 155 surcharge. It was on the menu plus a sign at the door as you entered. I had no problem with that.
As an aside she said the easiest days to get staff to work are public holidays.

 

[oz_mark]

Depends when their last increase to costs was though. Inflation's 4%, their staffing costs have gone up, their payment fees cannot be past on, their cost of materials has gone up considerably. I don't like paying more but you get to 10% pretty quickly. Years ago I worked for a food manufacturer and within the space of a year the tins that we packaged food into went up ~30%, just that made a notable increase in the cost of all of our goods.

But that's the point. These increases are not all about the removal of surcharges. Portraying them as such, when there are a whole lot of other factors, is not accurate.

 

[Pushka]

But that's the point. These increases are not all about the removal of surcharges. Portraying them as such, when there are a whole lot of other factors, is not accurate.

The timing - overnight - suggests many are.

 

[dairyfloss]

The timing - overnight - suggests many are.

I imagine that for a lot of businesses, it was just a convenient time to do this, and that with public awareness and news building about possible impacts to prices it might not have been taken so negatively at an individual business level.

The actual increases applied, or rather the magnitude of them, likely reflects broader, compounding effects to the cost of operating a business. I don't watch prices at cafes and restaurants closely, but had not noticed a difference to prices for existing offerings at the many places I/we eat for some time, however, we have absolutely noticed the difference in the underlying costs of food & beverages, and transport. There was also a ~6% rise in the national minimum wage that took effect in July.

The banning of surcharges might just have been the [paper] straw that broke the business's back.

Cheers,
Matt.

 

[OATEK]

But that's the point. These increases are not all about the removal of surcharges. Portraying them as such, when there are a whole lot of other factors, is not accurate.

The timing - overnight - suggests many are.

Our local cafes all seemed to raise their prices on October 1. Our usual go-to went from $5 per flat white ($5.15 with surcharge) to $5.50.

 

[Aussie_flyer]

I imagine that for a lot of businesses, it was just a convenient time to do this, and that with public awareness and news building about possible impacts to prices it might not have been taken so negatively at an individual business level.

The actual increases applied, or rather the magnitude of them, likely reflects broader, compounding effects to the cost of operating a business. I don't watch prices at cafes and restaurants closely, but had not noticed a difference to prices for existing offerings at the many places I/we eat for some time, however, we have absolutely noticed the difference in the underlying costs of food & beverages, and transport. There was also a ~6% rise in the national minimum wage that took effect in July.

The banning of surcharges might just have been the [paper] straw that broke the business's back.

Cheers,
Matt.

Agreed - the surcharge change was simply a good time to implement a general price rise under the guise of the surcharge issue.

 

[Mr_Orange]

The timing - overnight - suggests many are.

No, it's just cynical behaviour since, as has been stated many times, the actual cost of card acceptance has reduced.

Businesses can and do increase prices but pegging them to government decision without acknowledging the whole is pathetic.

 

[HMcM]

That isn't the way of Australia right now and it can't be wound back.

Charging credit card surcharges was the way until it wasn't and we wound it back.

But that's the point. These increases are not all about the removal of surcharges. Portraying them as such, when there are a whole lot of other factors, is not accurate.

Well this is the most acute change that has happened. It's a reordering because all of a sudden they cannot pass of the fee to customers. Otherwise businesses would have continued with their annual price rises for the other things.

 

[Pushka]

Charging credit card surcharges was the way until it wasn't and we wound it back.

We can't wind back employee law. Improve yes. Make less beneficial? Never.