Media release: Restaurants’ hidden delivery fees risk breaching the Fair Trading Act
Consumer NZ is urging hungry customers to watch out for hidden costs with their food deliveries. On top of delivery and service fees, restaurants around the country are also sneakily charging customers more for each item they get delivered. This practice risks breaching the Fair Trading Act. Consumer is calling on businesses to be upfront about their pricing so customers can make informed choices.
After receiving complaints from frustrated customers, Consumer investigated misleading pizza delivery prices. The watchdog found that both Pizza Hut and Domino’s increase the cost of every item in a customer’s order if it’s delivered.
If you call into Pizza Hut to collect a Mega Meat Lovers pizza, it will set you back $15.39. But if you opt to get it delivered, the same pizza costs $18.49, plus a delivery charge of $7.99. The true cost of getting your pizza delivered is actually $11.09.
It’s not just the pizza that’s more expensive, either. The cost of every item in your cart increases if you opt for delivery. This means you could end up paying significantly more for your delivered order than if you opted to collect it.
Graham, a Pizza Hut customer, got a shock when he mistakenly selected delivery for his online order. He corrected his order to pick-up and was surprised to see the cost of each item in his cart reduce.
“For a large company like Pizza Hut to not be upfront about additional costs, I thought, was unethical and misleading,” said Graham.
Consumers are being caught out by hidden costs at other restaurants too. In fact, the practice of increasing prices for delivered items is widespread across New Zealand’s food delivery sector. Most customers know they are paying for delivery, but they might not know how much more it’s really costing them.
KFC, Taco Bell and Carl’s Jr charge significantly more for each item delivered – on top of the advertised delivery fee. The true price of delivery goes up with every item added to a customer’s cart.
Customers told Consumer they believe it is intentionally misleading to have two sets of prices for the same menu, without being clear about the different pricing structure.
Third-party delivery services
Many customers have noticed similar pricing practices when ordering through third-party delivery services, such as UberEats, DeliverEasy, and Menulog. When ordering from these services, customers are charged a delivery fee, but also pay more for each item than they would if they were dining in.
Breaching the Fair Trading Act
The Fair Trading Act prohibits misleading and deceptive conduct by traders.
“We think businesses should be upfront about additional delivery fees so the customer can make an informed decision,” said Consumer NZ Chief Executive Jon Duffy. “The fact these companies aren’t being upfront about the true cost of delivery means they risk breaching the act.”
Consumer considers these pricing practices risk breaching the act and will lodge a complaint with the Commerce Commission.
Domino’s delivery disclaimer Since Consumer’s investigation into hidden delivery fees, Domino’s has added some fine print to its website to let customers know it charges a delivery service fee. Domino’s also emailed the customers on its database to let them know about the fee.
Note for editors
Pricing for Pizza Hut meat lovers pizza correct as at 13 July 2022.