The Western Australian government has issued a compliance reminder to all food and beverage operators, including those in the agritourism sector, regarding the legal application of surcharges. The directive from Consumer Protection clarifies that failure to clearly disclose additional charges to customers before a transaction constitutes a potential breach of Australian Consumer Law, and it comes ahead of a complete ban on payment card surcharges scheduled for October 2026.
Disclosure Mandates for General Surcharges
Businesses choosing to apply surcharges to cover increased operational costs, such as penalty rates on weekends or public holidays, must ensure the charge is explicitly communicated to patrons before they order. While there is no prescribed limit on the surcharge amount, it must reasonably reflect the additional costs being incurred by the business.
Acceptable methods of disclosure include:
* A clear and prominent sign displayed at the business entrance.
* Unambiguous wording on physical menus or price boards indicating that a surcharge applies.
The disclosure must be sufficiently noticeable to inform a customer that the displayed item prices are not the final price that will be charged. Any ambiguity or failure in this upfront communication may expose the business to regulatory action.
Rules for Payment Processing Fees
Surcharges for credit or debit card processing are governed by a separate, stricter set of rules. Businesses are permitted only to pass on the direct cost incurred for processing the transaction, such as bank fees or terminal costs, and must be able to substantiate these costs if challenged.
A critical compliance point exists for operators who do not offer a surcharge-free payment method, such as cash. If all payment options incur a surcharge, that fee must be incorporated into the single, displayed price of the goods. For example, if a $10.00 item can only be paid for by card with a 1.5% surcharge, the displayed price must be $10.15.
Strategic Implications of the 2026 Ban
Operators must prepare for a significant change to payment processing. The Reserve Bank of Australia will implement a mandatory ban on all surcharges for debit, prepaid, and credit card transactions, effective from October 1, 2026.
This regulatory shift requires businesses to begin reformulating their pricing strategies now. From that date, all payment processing costs must be incorporated into the business’s standard overheads and reflected in the displayed prices of goods and services. Operators currently relying on surcharges to offset these costs will need to adjust their financial models to maintain profitability under the new rules.
The WAAA News Team
