Hidden Fees Just Became a Very Bad Idea

Digging deeper

Everything above is the bottom line. What follows are the details: the single-price rule, how drip pricing works, the surcharge change, and how it applies to your business. Read on if you set your own prices or write your own quotes.

The single price rule

The law is clear. When you advertise a price to consumers, you must show a single total price. That price has to include every fee and charge the customer cannot avoid, and any pre-selected optional extras, calculated as accurately as you can at the time.

This is sometimes called the component pricing rule. In plain terms, you cannot advertise a small headline number and add the compulsory parts later. If a customer has to pay it to get the thing, it belongs in the price you show first, not the price they discover last. Show it any other way, and you are drip pricing.

The rule exists because a partial price is a misleading price, which is exactly why drip pricing is unlawful. It pulls people into a purchase, or into paying more than they meant to, by hiding the real cost until they are committed. That is the harm drip pricing causes, and the harm the law is built to stop.

What counts as drip pricing

Drip pricing is the practice of revealing the true cost bit by bit, rather than up front. It is easiest to spot in a few common forms.

• A “from $99” headline for a job that never really costs $99 once call-out, materials, and disposal are added.
• A booking fee or service fee that only appears at the final screen of an online checkout.
• A card surcharge added at the terminal that was never mentioned in the advertised price.
• An “administration” or “processing” charge tacked on at the end of a quote.

None of these is banned because the fee exists. They are a problem because the fee is hidden. Charge what you need to charge. Just show the whole number from the start, and drip pricing stops being a risk.

The surcharge ban changes the game.

A major change lands on 1 October 2026, and it reinforces the case against drip pricing. The Reserve Bank of Australia is removing card surcharges on the main networks, which cover EFTPOS, Mastercard, and Visa debit, prepaid, and credit cards.

From that date, you cannot add a surcharge when a customer pays with those cards. The price you display becomes the final price at the terminal. The reform is expected to save consumers around $1.6 billion a year in surcharge fees and remove one of the most common forms of drip pricing at the till.

There is a catch worth planning for. You will still pay a fee to your payment provider on every card transaction, though at a lower rate than before. So you have a choice. Absorb that cost, or build it into your prices. What you cannot do from October is add it as a separate line at the end. A few card types, such as American Express and buy now, pay later services, sit outside the ban, so check which of your payment methods are covered.

Was, now, and other price claims.

Drip pricing is not the only pricing trap. Two others catch businesses often.

The first is the false discount. A “was $200, now $120” claim is a price statement and must be true. The item has to have genuinely sold at the higher price for a reasonable period first. Inventing a “was” price to manufacture a saving is misleading.

The second is bait advertising. If you promote a special at a great price, you must have reasonable quantities to sell for a reasonable time. Advertising a deal you cannot actually supply, to draw people in and switch them to something dearer, is against the law.

The theme runs through all of it. Whatever you say about a price, whether it is the total, a discount, or a special, has to be honest and real.

What this means for a trade.

Trades and services feel this more than most because so much of the work is priced on a job-by-job basis. The “from $X” quote is where drip pricing risk lives.

Picture a plumber who advertises a $90 call-out. The real job carries an after-hours loading, a disposal fee, and materials. If the ad says $90 and the invoice says $300, the headline was misleading, even if every added charge was fair. The fix is not to drop the charges. It is to show a realistic total, or to state clearly and up front what the call-out does and does not include.

The surcharge change hits trades squarely too. Adding a card fee to an invoice has been common in the trades. From October, that stops for the major card networks. That removes a form of drip pricing many trades did not realise they were doing. So now is the time to review your pricing and decide how you will handle the cost before the date arrives, rather than after.

This reaches every sector SBAAS serves. An early learning centre advertising a daily fee, an allied health clinic quoting a gap payment, a consultant offering a fixed fee, and a charity selling event tickets all have to show the real total. Trade and services are among the largest parts of the economy, with well over 450,000 businesses, almost all of them small. That is a lot of quotes going out every day, and a lot of chances to get the number right.

What it costs to get it wrong.

The regulator is not making an example of the little end of town, but the cases show how seriously it treats drip pricing.

Webjet agreed to a $9 million penalty for advertising airfares without including compulsory fees, such as a servicing fee and a booking fee, which were not included in the headline price. Dendy Cinemas paid an infringement notice for showing a movie ticket price that left out an unavoidable per-ticket booking fee until late in the online process. Both are classic drip pricing: a real fee, hidden until the end.

For a small business, the more likely cost is an infringement notice worth thousands of dollars, a demand to fix your pricing, and the reputational hit of being named. The good news is that this is one of the cheapest risks to remove. Drip pricing costs nothing to fix: show the full price from the start.