Is it illegal to charge more than the advertised price

• Businesses must display clear and accurate prices, and must not mislead consumers about their prices.
• There are specific laws about how businesses must display their prices.
• Businesses must display a total price that includes taxes, duties and all unavoidable or pre-selected extra fees.
• If a business charges a surcharge for card payment, weekends or public holidays, it must follow the rules about displaying the surcharge.
• If more than one price is displayed for an item, the business must charge the lowest price, or stop selling the item until the price is corrected.

What the ACCC does

• We educate consumers and business about their rights and responsibilities.
• We accept reports where people consider a business is doing something they shouldn’t do. We use those reports to inform our education, compliance and enforcement work.
• If a business breaks the rules about displaying prices, we can investigate and may take some form of compliance or enforcement action. See our compliance and enforcement policy and priorities.

What the ACCC can't do

• We don’t give legal advice to businesses about the way they display prices.
• We don’t resolve individual disputes about price displays.

Businesses must not display prices that are wrong or likely to create a false impression. This includes prices displayed in store, in advertising, or whenever communicating with customers. See False or misleading claims for more information.

We have a guide to help business owners avoid misleading customers.

Advertising and selling guide

Honest advertising and selling practices benefit small businesses and consumers alike. Enterprising small businesses should be able to prosper on the merit of their products or services without fearing that competitors will gain an unfair competitive advantage from dishonest representations.

Examples of a misleading prices being displayed

• Stating the sale price is marked down from an earlier price when:
  • the items were not sold at that price in a reasonable period right before the sale started, or
  • only a very small proportion of items were sold at that price right before the sale.
• Comparing the displayed price with an incorrect cost or wholesale price.
• Comparing the displayed price to a recommended retail price (RRP) that no-one generally charges for the product.
• Promoting a price as being a sale or special price, when it is actually the normal price. Where an item is offered at a sale or special price for an extended period of time, it may be misleading to call it a sale or special price, as the price has effectively become the new selling price.
• Advertising a price that is not the total price the consumer will have to pay.

This price display is misleading if the item was never offered for sale at $19.99.

‘Drip pricing’ is when a price is advertised at the beginning of an online purchase, but then extra fees and charges (such as booking and service fees) are gradually added during the purchase process. This can result in consumers paying more than they initially intended to.

Businesses must be upfront and clearly disclose to consumers at the start of a purchasing process the types of fees that will apply and when.

Consumers should be wary of misleading ‘drip pricing’ practices when shopping online, particularly when purchasing airline, ticketing, accommodation and vehicle rental services.

To try and avoid paying more through drip pricing consumers should:

• not just focus on the advertised price – add up all the charges together to figure out the total final price you will have to pay and whether this is good value for money
• be prepared to back out of the transaction and shop around to find a better final price from a competitor
• look out for pre-selections and make sure to deselect anything that’s not wanted.

Sometimes businesses display different prices for the same item. If this happens, even by mistake, the business must either:

• sell the product for the lowest displayed or advertised price, or
• stop selling the item until the incorrect price is corrected.

This does not apply when:

• there are different prices for different regions
• one price is hidden by another price. For example, one price sticker covers another
• a unit price is displayed
• a price is displayed in an overseas currency.

Minimum total cost

Businesses must display the total price of a product or service as a single figure. This price must be the minimum total cost – the lowest amount a customer could pay, including any taxes, duties and unavoidable or pre-selected extra fees.

Example

The total price of an advertised holiday must include GST and airport taxes.

Optional extras that are pre-selected

Optional extras must be included in the total price, if the business pre-selects these options for customers. ‘Pre-selected’ means the business will include these options – and charge for them – unless the customer removes them.

Example

Seat selection for a plane flight is pre-selected by the business and will be charged, unless the customer opts to turn it off. Carbon offsets is not selected by the business and will not be charged unless the customer selects this option. The total price for the flight must include the cost of seat selection as this is pre-selected by the business. It doesn't need to include the cost of carbon offsets.

Optional extras that aren't pre-selected

The total price does not need to include optional charges that have not been pre-selected.

Example

If a business charges delivery fees, but consumers can also choose the option to click and collect for free, the business does not need to include the delivery charges in the prices displayed for its products.

Extra charges that can't be quantified

The total price does not need to include extra charges that can't be quantified (converted into a dollar amount) at the time of stating the price of a product or service.

Example

Holiday serviced apartments provider advertises its rooms as ‘from $117 per night’. The business also charges a $7 per person cleaning fee. Until someone makes a booking, the business doesn’t know how many people will be staying under that booking. As such, the business is unable to calculate the per night charge inclusive of the cleaning fee when making general advertisements of the apartments’ prices.

However, given at least one person would be staying under any booking, the business should include one $7 cleaning fee in the advertised price. As soon as the business becomes aware of how many people are staying under a booking, the business must inform the customer during the booking process of the full total price. The full cleaning fee will be able to be calculated at that point.

Prominence of prices

If a business also displays a price for just one part of a product or service, the total price must be at least as prominent as the partial price.

A prominent single total price is one that is clear and stands out so that it is easily noticed by a consumer.

Example

A business can advertise the cost of a 2-year contract as a per month fee, as long as it advertises just as prominently the total cost of the contract over the 2 years.

Example

A business can display the price of its services without including the cost of the mandatory booking fee it also charges, but only if it also displays the prices inclusive of the mandatory booking fee. The prices inclusive of the booking fee must be displayed just as prominently as the display of the prices without the booking fee included.

Displaying prices to other businesses only

If a business is displaying prices only to other businesses, it doesn’t need to include GST in the total price.

Some businesses that sell groceries must show a unit price alongside the total selling price for certain products. Unit pricing helps consumers compare prices and find the best value for money.

See Unit prices for groceries for more information.

Card payment surcharges

In general, businesses can charge a surcharge for paying with a credit, debit or prepaid card, but the surcharge must not be more than what it costs the business to use that payment type. There are rules around what businesses can include in calculating these costs.

If there is no way for a consumer to pay without paying a surcharge, the business must include the minimum surcharge payable in the displayed price for its products.

See Card surcharges for more information.

Weekend and public holiday surcharges for cafes and restaurants

Some restaurants and cafes charge a surcharge on certain days – usually weekends or public holidays.

Although this surcharge is unavoidable, they don't need to include this charge in the total price displayed for their products, as an exemption under the law applies to them.

However, if they charge such a surcharge, they must include these words on the menu:
A surcharge of [percentage] applies on [day or days].

These words must be at least as prominent as the most prominent price on the menu.

Alternatively, if the menu does not list prices, the information about the surcharge must be displayed in some other prominent way.

Advertising and selling guide

Small business and the Competition and Consumer Act

Unit prices for groceries

Unit Pricing Code

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