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Bulletin 21: Surcharges / Pricing

High prices
The Australian Consumer Law does not regulate the pricing of goods and services. If you think a business is charging too much, you may wish to offer your feedback directly to them, or to the relevant industry association, for their consideration.

Businesses may charge what they see as a fair and reasonable price, except when pricing is regulated or otherwise fixed. There are also laws against businesses colluding to inflate or control prices. This is known as cartel conduct or price fixing.

Multiple prices
If a supplier displays the same item with more than one price, they must sell it for the lowest displayed price or withdraw the item until the price is corrected.

For information, visit the Code of Practice for Computerised Checkout Systems in Supermarkets.

Component pricing
A supplier must not promote or state a price for goods or services that represents only part of the cost, without also prominently advertising the single (total) price. The single price must be as clear and obvious to a consumer as the most prominent component of the price.

Where a service is supplied under a contract that provides for periodic payments, the single price does not have to be displayed as prominently as the component prices. However, the supplier must take care to promote the price in a way that is not deceptive, false or misleading.

The single price does not have to include a charge for sending goods from the supplier to the consumer, unless the supplier is aware of a minimum charge that must be paid.

The single price is the total of all measurable costs and includes:

  • any charge payable, and
  • the amount of any tax, duty, fee, levy or charges (for example, GST).

Civil and criminal penalties apply for failing to comply with single price requirements.

Drip pricing
Drip pricing is where a single price is advertised at the beginning of an online shopping process and additional fees and charges which may be unavoidable are then incrementally disclosed (or ‘dripped’). This can result in paying a higher price or spending more than you realised you would.

When shopping online, you can follow these tips to avoid any issues, or if you find yourself faced with a drip pricing scenario:

  • be aware of misleading drip pricing practices when shopping for services, particularly in the airline, ticketing, accommodation and vehicle rental sectors
  • consider all applicable charges together – don’t just focus on the advertised price since this may not be the cheapest final price. It is also a good idea to shop around
  • be prepared to not proceed with the transaction, especially when you start to see additional charges being added
  • look out for pre-selections and make sure you reject anything you do not want to include in your purchase. Thoroughly check your booking before you make any final payments.

Civil and criminal penalties apply for conduct that misleads or deceives consumers about the price of goods or services. Drip pricing can also amount to a failure to comply with single price requirements if all of the components of the advertised costs could have been presented as a single price from the beginning.

Restaurants, cafes and bistros
Restaurants, cafes and bistros often apply a surcharge on Sundays and public holidays.

If they do, their menu must include the words “a surcharge of [percentage] applies on [the specified day or days]”These words must be displayed at least as visibly as the most prominent price on the menu on the day or days the surcharge applies.

If the menu does not list prices, the applicable surcharge amount must be easily seen and visibly displayed so that you are aware of the additional costs before ordering.

Change of mind
A store does not have to give a refund or replacement if you simply change your mind about a product. This includes if you find the same product or service cheaper from a different supplier.

Example only (outcome may differ in individual cases):

Celeste bought a vacuum cleaner from a department store. That weekend she saw the same model at a local store on special. She returned to the department store, who told her that as there was nothing wrong with the vacuum cleaner, they do not have to give her a refund, exchange or store credit.

Some stores have an in-store policy to offer a refund, exchange or credit note if a customer changes their mind. For more detail, view our Change of mind page.

Price matching
Some businesses promise to match (or better) the prices of competitors if a customer can find the same item for the same (or a cheaper) price elsewhere.

Businesses that have price-matching policies must make sure they do not:

  • take away the customer’s rights under the Australian Consumer Law
  • present information in a misleading or deceptive way
  • omit important information relevant to the price match, or bury it in any fine print.

We cannot provide tailored advice on whether an in-store policy is valid or legal.