Bmag Jan 24th 2012 - Advertising restaurant surcharges

Here’s something to keep in mind this Australia Day. Did you know, as of last year, restaurants and cafés are no longer allowed to say “plus 15 per cent surcharge on weekends and public holidays”? Instead they must show the full price, which means having two sets of menus with two sets of prices. But don’t get too used to it. This relatively new law is already set to be overturned. Confused?

Here’s the current situation as explained by the Australian Competition and Consumer Commission: “A business must not promote, advertise or state a price that is only part of the cost that a customer has to pay, unless the total single price is also prominently advertised, promoted or stated. “This law affects businesses that apply surcharges (cafés/restaurants); incur additional levies and taxes (tourism/travel); and some service industries. “Any breach is directly enforceable as a contravention of the Australian Consumer Law.”

Amelia Taylor creates marketing solutions for small businesses in the food and wine industry. She says “it’s a ridiculous law”. Admitting her anger is “possibly due to the 15 sets of menus I had to redesign and print at New Year”, Amelia says “the government makes it almost impossible these days to run a business”.

As another industry insider puts it: “I understand the principle but if patrons can’t work out 10 per cent they should probably not dine out!” That’s fine if it is 10 per cent but what about 15 per cent or 17.5 per cent? Hands up anyone who’s willing to be tested publicly on their ability to divide a bill, then multiply the per-person cost by 17.5 per cent, all at the end of a particularly jovial night? And does everyone always know which days are the public holidays? For example, not everyone would have realised this year’s New Year’s Day holiday was on 2 January.

Amelia Taylor makes a good point when she says “now restaurants can put whatever they want [on weekends and public holidays] because no one actually knows what the [normal price] is”.

The latest twist is that in September the Federal Government accepted a Productivity Commission recommendation to have restaurant and café menu surcharges placed outside the scope of the component pricing provisions of the Australian Consumer Law. Straight away, the industry’s peak body, Restaurant and Catering Australia, welcomed the Federal Government’s new (old) approach, saying “a percentage surcharge was far easier for consumers and the businesses involved”. That was 13 September last year. The reason it is still illegal to state “plus 15 per cent surcharge” on menus is, according to Restaurant and Catering Australia, “the state governments now need to accept the change, given the new federal approach to the Consumer Law”.

Which would you prefer? Email spencer@bmag.com.au and let me know. At the moment, it’s nothing short of confusing. Many restaurants and cafés don’t know or don’t care and continue to advertise that an additional surcharge applies. Most café and restaurant-goers are simply unaware this debate has been going on.

On a similar note, why did tradies apparently not get the memo about including GST in the total amount on their quotes and invoices? Having travelled in the US, where taxes differ from state to state and price tags rarely show the full amount, I love how we show the total, GST included. In the last two years, whilst slowly dabbling at renovating, I’ve noticed many – not all – tradies will quote you a figure then write “plus GST”. How is that legal?

Solar eclipse update

In the last issue, I enthused about the total solar eclipse visible from Far North Queensland later this year. Cairns-based travel agent Pete Pritchard emailed to add the following advice: “The road between Cairns and Port Douglas is mainly narrow, windy and single-lane and with a marathon starting in Port Douglas [at the very end of the eclipse] the road will be horrendous. Additionally, the roads up to Mareeba and to the north of Mareeba are all single lane as well and are likely to be very busy from 3am onwards as a lot of accommodation is already booked out up there. I would definitely suggest people do research with this in mind.” Thanks Pete!