Take care with surcharge on Public holidays

A number of cafes, service providers and a few other retailers have decided to apply a surcharge for the services they provide on public holidays to recover the additional labour costs incurred for trading on the day. The Commerce Commission has issued a timely reminder about the requirement for any such surcharge to be clearly disclosed to customers before they commit to a purchase.

The Association believes that the decision to charge a surcharge or not is one for the individual trader. It has become common practice in the hospitality trade, but is more difficult in other retail operations and we believe surcharges are unlikely to be used by many general retailers. Publicity given to traders who applied a surcharge at a bakery and also at another food supply shop over the Christmas period suggests that it wasn't a good marketing strategy, but finally it is a decision for the retailer.

The Commerce Commission's press release is set out below. With several public holidays occurring over the next few weeks, we thought it useful to draw this to your attention.

Association members are welcome to call the Member Helpline (0800 472 472) to discuss any particular concerns with one of our advisors.

Commerce Commission Media Release -Issued 20 January 2004-05

Commission reminds businesses of obligation to clearly disclose holiday surcharge

The Commerce Commission is reminding businesses that while charging a holiday surcharge is not illegal, failing to inform customers that a surcharge applies is.

Director of Fair Trading Deborah Battell said that with Anniversary Day holidays approaching in Wellington, Southland, Auckland and Nelson, the Commission was concerned to ensure that businesses were aware of their obligations under the Fair Trading Act and that consumers were aware of their rights.

"Under the Fair Trading Act, businesses must clearly identify all the costs or charges that the buyer of the goods or services will have to incur at the time an offer or representation is made," Ms Battell said.

"This means that customers must be made aware of any holiday surcharge that applies before they make a decision to purchase.

"If a customer isn't told a surcharge applies, then the business may be acting illegally by insisting they pay it."

Media contact:  Deborah Battell, Director, Fair Trading Branch

Phone work (04) 924 3760, mobile 0275 24 3760

 Gail Marshall, Communications Adviser

 Phone work (04) 924 3709, mobile 0275 24 3709

Commission media releases can be viewed on its web site www.comcom.govt.nz