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Cafe surcharge ban backfires on shoppers
Australian cafe surcharge ban backfires on shoppers as coffee prices rise
Key points
- About 20 per cent of cafes across Australia raised coffee prices in October, according to SmallFlatWhite.com data.
- A small flat white cost $5.16 on average in October, up from $5.01 in April.
- Tyro transaction data suggested almost nine in 10 providers had not increased prices since October 1.
Why it matters. Surcharges were scrapped to save customers money, but businesses absorbing or building in those fees are pushing prices up, and Drake expects most cafes to raise them in January or February.
In October, about 20 per cent of Australian cafes raised coffee prices after card surcharges were banned from October 1, price tracker SmallFlatWhite.com found. A small flat white averaged $5.16, up from $5.01 in April, and the most common rise was 50 cents. Chris Drake, who started the tracker, said suppliers that no longer charge surcharges had also raised their prices.
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Cafe surcharge ban backfires on shoppers
One in five cafes have hiked the price of coffee in the month since card surcharges were banned in Australia, a move promised to save customers money. Surcharges for credit and debit card payments were removed from October 1 when the Reserve Bank of Australia’s (RBA) new guidelines came into effect. Want more business news? Download our new app Australians were previously paying around $1.6 billion in transaction fees passed on to them by small businesses, which now must either be absorbed or baked into advertised prices. Hospitality industry leaders warned most merchants would do the latter, and that the new charges would be even higher than what they were with the small surcharge fees . New data from price tracker SmallFlatWhite.com found about 20 per cent of cafes across the country put the price of coffee up in October, with the most common rise of 50 cents. That 20 per cent figure represents thousands of cafes, with more than 10,000 venues surveyed last month. Prices rose about three times faster last month compared to the average over the past five months, the data revealed. Chris Drake, who started the price tracker in April, said cafes staff he had spoken to explained the surcharge was the last straw for businesses already buckling under increased costs and hits to cash flow. “I think the main thing to remember here is that the surcharge increase hasn’t just affected co.