As Easter approaches the Commerce Commission is reminding businesses that any surcharges added must be clearly disclosed and the reasons for the surcharge accurately described to avoid breaching the Fair Trading Act 1986.
“Businesses can set their own prices for products and services, including charging a surcharge. However, if they do apply a surcharge it must be clearly disclosed, for example, by adding information to their website for online sales or placing a sign outside,” commented Commission Chair Anna Rawlings.
“Customers should be aware that a surcharge will be payable before they make a decision to purchase or engage the service, so they can decide whether to pay the surcharge or go elsewhere. In addition, the reason for any surcharge must be accurately described and must not be capable of misleading consumers.”
For example, businesses sometimes use surcharges to recover additional costs such as staff wages, because employees get a higher pay rate and an alternative day off under the Holidays Act when they work a public holiday if it’s a usual working day for them. However, if a business says a surcharge covers those additional costs, the surcharge should not exceed those costs, and the costs should actually be incurred by the business.
Consumers who consider they have been misled about the reason for a surcharge, or the amount of a surcharge, or who believe that the surcharge has not been adequately disclosed, can make a complaint to the Commerce Commission.