The decline of cash payments since the pandemic means more customers are being slugged with these in a trend that experts say is “highway robbery”.
Billionaire Justin Hemmes owns the Lorne Hotel and part of payment provider Me&U.Rhett Wyman
At the Lorne Hotel last weekend,after the town’s annual open water swim event,a child’s chicken schnitzel priced at $14 on the menu cost $15.71 when ordered through a QR code – the extra cost included a 10 per cent venue surcharge of $1.40 and a 31¢ payment service fee.
A spokeswoman for billionaire,who owns the and part of Me&u,said a 10 per cent surcharge was applied on the day of the Pier to Pub event to cover additional operational costs for security and entertainment.
At Brunetti Oro on Flinders Lane in Melbourne,a toasted focaccia last week priced at $14.50 cost $14.67 with a 1.2 per cent card surcharge.
The cafe has signs at the register noting surcharges of 1.2 per cent for card payments,10 per cent for weekends and 15 per cent for public holidays.
Yuri Angele,owner of Brunetti Oro said he hates surcharges.Jason South
Yuri Angele,owner of,said he hated surcharges and would avoid them if he could.
“The charges became significant and we had to deal with them,so we decided to add on the surcharge,” he said. “Everyone is doing it now,so the customer is used to it and is accepting.”
But at Frankie’s Top Shop in St Kilda,there are no surcharges applied to customers’ bills. Owner Michele Curtis said she regarded the payment fees as part of her business costs,the same as electricity and gas.
“I understand why people are doing it,” she said. “Costs are going through the roof left,right and centre.[But] for me,it leaves an unpleasant taste.”
Michele Curtis,owner of cafe Frankie’s Top Shop,says she does not pass on payment fees to customers and instead absorbs the costs.Justin McManus
Gary Mortimer,professor of consumer behaviour and retail marketing at QUT,said rather than being included in the advertised price of an item,payment fees were increasingly being added by businesses as a surcharge.
“Possibly a while ago,bistros and restaurateurs were happy to wear that cost in order to bring patrons back,but margins are thin and there is a need to potentially push that cost back to the consumer,” he said. “I think the consumer is not fully aware of the cost.”
One hospitality operator,who did not want to be named out of fear of repercussions,said operators were being encouraged by QR code restaurant ordering app Me&u to pass fees onto the consumer rather than including the cost in the price of the item as “customers will not notice”.
A spokesman for Me&u denied that the company encouraged businesses to get consumers to pay the additional cost rather than including it in the advertised cost.
“With our order and pay product,we make money when consumers use the product in venues,so we have zero reason to disincentivise consumers from using our product,” he said. “Passing on the fee to consumers would mean they would use the product less,so that wouldn’t make sense for us to take that approach.”
Australian consumer law requires restaurants,cafes,pubs and retailers to display clear and accurate prices and not mislead customers about their prices,but businesses are free to set their own prices.
An Australian Competition and Consumer Commission spokeswoman said this included being clear and upfront about any additional costs that might apply,as well as when a charge is optional.
“Hospitality venues need to ensure they make consumers aware of any additional costs the business may apply before consumers decide to order,” she said.
Grant Halverson,the founder and chief executive of payments consultancy McLean Roche,said because of inflation,surcharging was “running rampant”,with different types of debit cards,credit cards and payment methods all charging different fees and merchants often applying a flat fee.
“Technically,what they’re supposed to do is charge the consumer their raw cost of the payment,but they don’t do that,” he said.
Halverson said the cost of payments on an eftpos card was typically 28¢,Visa or Mastercard debit cards were 50¢,a typical credit card was $1.30 and an American Express or Diners Club is $1.50.
“A debit card effectively should cost 0.28 per cent but in fact,the merchant is often surcharging 1.75 per cent,so this is just a highway robbery,” he said. “The average consumer is paying about $140 a year extra and another $75 in surcharges. All these fees and charges come in and so the consumer is getting whacked,totally whacked.”
Halverson said the ACCC was a “toothless tiger” as far as surcharges were concerned.
“Businesses are feeling the pressure just like consumers are,all of their costs have gone up so they’re trying to recover what they can as well,” he said.
“But the real issue here is what banks and non-banks are charging. It’s over a billion dollars a year. That’s just gouging.”
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