Key facts
- 17% of cafes have increased prices since the credit card surcharge ban began.
- The average price increase for coffee was 50 cents, over 10% of the price.
- Economists suggest businesses are using the ban as cover to pass on broader cost pressures.
- The Australian Competition and Consumer Commission (ACCC) warned businesses against misleading consumers about price rises.
- Rising produce costs, rents, and wage adjustments are cited by businesses for price hikes.
- Higher interest rates from four hikes in 2026 are increasing loan repayments for businesses.
Businesses in Australia are reportedly using the recent ban on credit card surcharges as a justification to implement larger price increases, according to experts. The ban, which took effect on October 1, was intended to improve transparency and lower bank fees.
Small Flat White, an online coffee price tracker, reported that 17% of cafes have raised their prices since the ban. The average increase observed was 50 cents, representing more than 10% of the coffee price, which is significantly higher than the typical 1.5% surcharge that was previously applied.
Economists like Stephen Wu from UBS suggest that resilient consumer demand and the prevailing high inflation environment are allowing merchants to use the change as 'cover' to pass on broader cost pressures. Wu noted that consumers may be more accepting of price rises after years of above-target inflation, and that 'round-up' pricing for items like coffee indicates that the pass-through could exceed the surcharge itself.
The Australian Competition and Consumer Commission (ACCC) has cautioned businesses against misleading consumers by attributing price hikes solely to the surcharge ban when other costs are also involved. The ACCC also stated that businesses attempting to circumvent the ban by reclassifying surcharges as other fees may be engaging in misleading conduct.
Wes Lambert, chief executive of the Australian Restaurant & Cafe Association, acknowledged that business costs are escalating due to factors such as rising produce costs, high rents, and adjustments to junior pay rates. He suggested that the surcharge ban might have provided the impetus for business owners to implement necessary price increases. Lambert also pointed to the impact of four interest rate hikes in 2026, which have increased loan repayments for businesses.
Consumer advocate group Choice noted that while some price increases were anticipated, consumers benefit from upfront pricing. Morgan Campbell, head of policy at Choice, stated it was too early to conduct research on the ban's impact, but suggested customers could decide how to respond if businesses raise prices significantly more than the surcharge amount.