The Fair Trading Act: Surcharges and Misleading Claims

💸 Misleading pricing tricks

Most Fair Trading Act problems that shoppers actually meet are about price. The law does not stop a business charging what it likes, but it does stop a business creating a false impression about a price. Here are the tactics to watch for.

Fake was prices and phantom discounts

A was price, sometimes shown as a struck-through number next to the sale price, tells you that you are getting a genuine saving. It is only honest if the item was really sold at that higher price for a meaningful period beforehand. If a shop briefly ticks the price up to $199 so it can advertise a drop to $99, or if the item was never sold at $199 at all, the was price is misleading. The same goes for a permanent sale, where a product is always on special so the higher reference price is a fiction. A saving claim such as save $100 must reflect a real, recent selling price.

Drip pricing

Drip pricing is where a business advertises a low headline price, then adds unavoidable fees one drip at a time as you move through the checkout: a booking fee, a service fee, a card fee, a delivery charge. By the time you reach the final screen the price is much higher than the one that drew you in. Where those fees are compulsory, revealing them only late in the process can mislead you about the true cost, and the Commerce Commission has taken action against drip pricing. An honest business shows the real all-in price up front.

Bait advertising

Bait advertising promotes a deal the business cannot realistically supply, for example a headline bargain with only one or two units in stock, used to pull you in so staff can steer you to a dearer item. Advertising something you do not have a reasonable supply of, or never intended to sell at that price, can breach the Fair Trading Act.

Unit pricing at the supermarket

Unit pricing shows the price per standard unit, such as per 100g, per litre, or per 100 sheets, so you can compare products of different sizes and cut through clever pack sizing. Since 31 August 2024 it has been compulsory in physical stores for larger grocery retailers, those with a floor area of 1,000 square metres or more, and from 31 August 2025 for online grocery sellers. The rules sit under the Consumer Information Standards (Unit Pricing for Grocery Products) Regulations 2023, made under the Fair Trading Act, and the unit price must be shown clearly and legibly, at least a quarter the size of the retail price.

💳 Card and payWave surcharges

A surcharge is an extra fee a business adds when you pay by card, often shown as a percentage such as 2%, or sometimes a flat amount. Surcharges are common on payWave, contactless and credit card payments, because those methods cost a merchant more to accept than plain EFTPOS. This is one of the fastest moving areas of consumer law in New Zealand, so it is worth understanding both the rule that applies now and the change that has been signalled.

The rule that applies now: surcharges must be reasonable

Under the Retail Payment System Act 2022, the Commerce Commission oversees what it costs businesses to accept card payments. Its guidance is that a surcharge should be no more than the merchant's actual cost of accepting that particular payment method, which is usually the service fee the merchant's payment provider charges for that method. A business should not use a surcharge to recover general running costs such as wages, power, or the cost of the terminal, because those are not specific to any one payment method. EFTPOS is usually free or very cheap to accept, so a surcharge on an EFTPOS payment is hard to justify at all.

The Commission has also cut the interchange fees that sit behind these costs, a change it expects to save businesses around $90 million a year, which should push surcharges down over time. So a flat surcharge of 2% or more applied to every card, including EFTPOS, is very likely to be higher than the real cost, and that makes it unreasonable.

The change that has been signalled: an in-store surcharge ban

In 2025 the government announced it would ban surcharges on in-store payments made with EFTPOS, Visa and Mastercard, covering both debit and credit, and including contactless, payWave and digital wallet payments. The change was signalled to take effect by no later than May 2026. Online payments were not included in the proposed ban, so a surcharge could still apply when you buy online. The government estimated New Zealanders pay around $150 million a year in surcharges, including tens of millions it described as excessive.

How to complain about a surcharge or a misleading price

Your options run from quick and free to formal:

• Ask at the counter. A business must tell you a surcharge applies before you pay. Ask what the surcharge is for and whether a fee-free option, such as EFTPOS or cash, is available.
• Complain to the business in writing. Set out the price you saw, what you were charged, and why you think it is misleading or excessive. Keep it factual and keep a copy.
• Report it to the Commerce Commission. Use comcom.govt.nz to report misleading pricing or excessive surcharging. The Commission looks for patterns and can act against a business even though it will not chase your individual refund.
• Claim your money at the Disputes Tribunal. If you are out of pocket, you can bring a Fair Trading Act claim to the Disputes Tribunal for a low fee, with no lawyers.

🔢 Four New Zealand examples

These examples show how the rules play out with real numbers. The figures use round amounts for clarity, and the rules and rates are current for July 2026.

Related guides and tools

• Consumer Guarantees Act guide, for your rights when a product is faulty rather than mis-sold.
• Making a complaint and using the Disputes Tribunal, for turning a Fair Trading Act problem into a claim.
• Chargebacks guide, for reversing a card payment when goods are not as described or not delivered.
• Supermarket pricing guide, for using unit pricing and spotting shelf-price tricks.