Commerce Commission reminds businesses about overcharging on public holidays
Friday, 5 February 2021
Businesses must be clear and upfront about public holiday surcharges, the Commerce Commission has warned.
If businesses choose to add surcharges on a public holiday, they must be clearly disclosed, and the reasons for the surcharge accurately described to avoid breaching the Fair Trading Act, a commission spokeswoman said.
Commission chairwoman Anna Rawlings said businesses had the right to 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 or placing a sign outside,” Rawlings said.
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“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”.
Hospitality businesses who have added surcharges on public holidays have been criticised for “boosting their income” with the additional fees, while others have been criticised for not providing accurate information to customers before they ordered.
Rawlings said the reason for the surcharge needed to be accurately described and must not mislead customers.
For example, businesses sometimes use surcharges to recover additional costs such as staff wages.
However, if a business says a surcharge covers those additional costs, the surcharge should not exceed the wage costs, and the costs should actually be incurred by the business.
It was likely to be misleading and a breach of the Fair Trading Act for businesses to charge a public holiday surcharge on days when they did not actually incur additional costs, Rawlings said.
Several public holidays will be Mondayised in New Zealand in 2021. Waitangi Day and Anzac Day both fall on weekends for the first time since the Holidays Act 2003 was amended in 2014.
Working out which day is a public holiday can be confusing, and businesses must be upfront about surcharges and check that they are applying them on the right days, the commission said.
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 commission.