Component pricing

When a business promotes a price for goods or services, they must state the total price. If the business promotes a price that is only one component of the cost, they must also advertise the total price (as a single figure) at least as prominently as the partial price.

The single price must be:

• clear at the time of the sale; and
• as prominent as the most prominent component of the price.

If services are supplied under a contract that allows periodic payments then there is no requirement to display a single price as prominently as the component prices.

The single price is the total of all measurable costs and includes:

• any charge payable; 
• the amount of any tax, duty, fee, levy or charges (for example, GST); and
• any pre-selected optional extras.

A single price does not usually have to include postage, unless the business is aware of a minimum charge that must be paid.

The Australian Consumer Law provides an exemption from these requirements to cafes and restaurants. Café and restaurant menu surcharges are not required to adhere to the component pricing requirements as long as:

• the menu displays a surcharge for the supply of food or beverage on specified days by the restaurant or café;
• the menu displays the following words ‘a surcharge of [percentage] applies on [the specified day or days]’; and
• the prescribed words are displayed in a transparent and prominent manner.

Pre-selected optional components

Changes to the Australian Consumer Law will clarify prices for people shopping online. From 26 October 2019, businesses must include pre-selected optional extras in the advertised price of goods and services. Consumers may then choose to deselect them as they go through the buying process. 

For example

An airline website advertises a flight for $500. As the consumer makes the purchase, the optional carbon offset fee of $10 is pre-selected.

Under the new laws, the flight must be advertised at $510 up front. During the purchase process, the consumer can de-select the fee to reduce the flight cost to $500.

More information about component pricing is available from the ACCC website.