Finance

How this café introduced a weekend surcharge to cover penalty rates without upsetting customers

Broede Carmody /

A café owner in north east Victoria has decided to apply a 20% surcharge to customers’ bills in order to open on public holidays after its weekend surcharge to cover penalty rates was well received by customers.

Eric Bittner, the owner of Café Derailleur in Wangaratta, introduced a 10% surcharge on customers’ weekend bills last year.

Yesterday, the small business owner took to Facebook to say he will be opening on public holidays and applying a surcharge of 20% to ensure he won’t lose money by trading on those days.

Read more: Some cafes may have opened, but Victoria’s new public holiday hurt SMEs

Café Derailleur employees around 13 people and has been operating for nearly five-and-a-half years.

As for how Bittner initially introduced the surcharge without creating a backlash from customers, the small business owner told SmartCompany it’s all about being as transparent as possible.

As a result, Bittner says the response from the community has been fantastic, with many people saying they are happy to pay a little extra in order to support a local business.

“It comes down to being able to manage my expenses and revenue at the same time,” Bittner says.

“I try and maintain a dialogue with my customers to talk about what the issues are that they have and to try and make sure there’s an understanding about what my issues are in the business. It’s about making sure I’m running as sustainably as possible.”

 

 

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Bittner says too many hospitality businesses close their doors after a year or two because they are unable to put money away for tough times and are just trying to stay afloat by managing costs, including penalty rates.

“That’s typical for a lot of businesses, they have a debt to the tax office and that’s what causes them to go under,” he says.

The small business owner acknowledges penalty rates are a “really contentious issue” but  says he hopes he has found a way to move beyond simplistic and divisive arguments.

“If my customers go, ‘Eric, we’re not going to come on a public holiday because you’re charging the surcharge’, that’s fine,” he says.

“I’ll respond accordingly and look at what other ways I can look at staying open on a public holiday. That’s up to me as a hospitality professional to explore what other options I’ve got.”

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Broede Carmody

Broede Carmody is a former senior SmartCompany reporter. Before this, he was a co-editor of RMIT University's student magazine Catalyst.

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