If You Split Payments, if One Person Pays by Card Does The Other Person Have to Pay The Card Surcharge if Paying by Cash?

This is just a warning for all, to always be vigilant and to always check you are being charged the right amount when bills are split.

I dine at Chin Chin’s a few weeks ago with a friend, when we went to get our bill the waitress offered us split payments. She decided to pay her portion by card and was charged a card surcharge of 1.8%. I decided to pay by cash but the waitress wanted to charge me the surcharge as well because my friend paid by card. I asked her why should I have to pay the card surcharge when I’m paying cash and she just said that is the way it is - I don’t blame her because she is clearly under instruction by management but it is clearly not fair. Not so much losing a dollar or two but the principle. She was very reluctant to let me pay my cash without the surcharge and I had to be very firm with her (but polite as always).

I’ve contacted fair trading about this received and received confirmation that what Chin Chin was doing was in their words was ‘definitely unlegal’ and they said they were going to follow this up with the restaurant. I just wanted to share this in case it happens to anyone else.


Hi @natanitteb,

You’re right in thinking what they did was illegal and I’m glad you’ve followed it up with Fair Trading.

The surcharging laws say that businesses can only charge a surcharge to recover the costs of processing the transaction - they can’t make a profit from surcharging. This cost is reflected as a percentage of the transaction processed. Therefore, if your friend’s transaction went through, the bank would charge a percentage-based fee on their amount which the restaurant have passed on the the customer. This obviously isn’t the case if you’re paying cash, as there is no need to recoup costs from the bank.

You’re right in saying that the principle of it is important! Imagine if they’re doing this all the time - the $ figure dramatically increases. It’s also a new law, so it’s important for businesses to understand and comply with the law from the start. This also applies to fixed cost surcharges commonly seen at cafes (e.g. 50c charge for card transactions). The fee needs to represent a percentage of the total cost, not an arbitrary dollar amount (unless it’s capped below the actual ‘cost of acceptance’, like some airline booking fees are).

Tilly - Policy and Campaigns Advisor


1.8% percent seems a bit high - the RBA set expectations for debit cards at around 0.5% and credit cards 1.0-1.5%.

ACCC are the people to report them to, but that said, good luck :wink:


But on the other hand, surely it’s arguable that the restaurant has the right to place a surcharge on splitting the bill, independent of any surcharge of processing credit cards. After all many restaurants flatly refuse to do so. Of course they should then state that is the purpose of the surcharge. Agreed it’s something to watch out for, but for me it belongs in the same bucket as excessive “corkage” and “cakeage” fees.


which is ok until you stop dealing with the source directly (ie a bank). Every tier thereafter will add their own fee/%. Also the smaller you are the less likely the banks are to bother with giving a remotely average deal (and support can be an issue at said sizes at least when I was working for a POS provider it was a reason people were happy to sometimes go with the POS preferred supplier instead). Types and costs of terminals too factor into decisions as to who gets picked.

Ideally the split bill and surcharges should be handled by the POS automatically its not entirely simple as it sounds but its not that hard either (the better and likely pricier POS will) but cheap POS systems/apps probably not.


They do much like an auto gratuity for ‘large’ tables that some places charge but this has to be separated out on the bill you can’t bundle it under CC surcharges because they are no longer legally permitted to be larger than what the venue is charged (typically the venues would also want to notify users of this somewhere say in menu or an entrance sign(s)).


Current experience with bill splitting in Germany and Scotland over the last few weeks has been 100% ‘no worries’. How they did it varied widely but not once was there any pushback; tipping culture was either ‘gone missing’ with not even a tip jar, or an Aussie type tip jar by the till. The venues were mostly not on the main tourist routes and 2 per day for 20 days and counting is probably a small sample, but after loving my life in Australia for many years getting out and about has been an awakening about some of our ‘rough edges’ compared to at least those places we dined in Germany and Scotland. The food has been generally amazing (especially the fish!) and the service a comparative step up from what I have come to think of as normal at home.


I travelled to the USA some years back, good service here (Aust) is still good comparatively but general level of minimum service is typically eclipsed here on a regular basis because the basics are pretty well standard everywhere in USA (my parents have been living there for 7 years now … food might be terrible because its not a great place but its very rare to get bad service).