New Zealand consumer files Commerce Commission complaint over hidden food delivery charges
Consumer NZ investigated fast food chain prices and found that some increased the cost of each item in a customer’s order if it was delivered.
Consumer NZ has lodged a complaint with the Commerce Commission after finding fast food chains were raising the prices of items if they were delivered.
Consumer NZ said that in addition to delivery and service charges, restaurants across the country were also charging customers more for each item delivered, which risked breaching fair trade law.
After receiving complaints from customers, Consumer NZ investigated fast food chain prices and found that Pizza Hut and Domino’s increased the cost of each item in a customer’s order if it was delivered.
A phone order from a Pizza Hut store to pick up a pizza for meat lovers would cost $15.39, Consumer NZ said.
* Outrage over Domino’s “tip your driver” feature
* Coronavirus: what the new alert levels mean for McDonald’s, Burger King, Domino’s
* Domino’s free pizza offer for the elderly undermines coronavirus lockdown, union says
But delivered, the same pizza costs $18.49, plus a $7.99 delivery charge, he said. That meant the actual cost of delivering the pizza was actually $11.09, he said.
The Commerce Commission’s Chief Fair Trade Officer, Vanessa Horne, said since July she had received 12 complaints about hidden delivery charges at restaurants and through delivery services.
When Things phoned Pizza Hut on Friday to place an order, cost for Hawaiian pizza was $7, pepperoni was $7, and meat lovers $11, $25 for pick up.
Getting it delivered costs $9.99 for a Hawaiian, $9.99 for a pepperoni, and $13.99 for meat lovers, plus a $7 delivery charge, bringing the total to $40.97.
The same order at Domino’s came to $24 for pickup. Hawaiian is $7, pepperoni $5, and meat lovers $12.
For delivery, the store clerk said it was $40 because there was a $10 delivery charge and the price of Hawaiian and pepperoni had gone up $3 each.
However, the same online order was $42.40 because it also included a 6% delivery charge, which was $2.40 for the order.
Consumer NZ chief executive Jon Duffy said it wasn’t just the pizza that was the most expensive. Each item in a basket increased if a customer opted for delivery, he said.
“We believe businesses should be upfront about additional shipping costs, so the customer can make an informed decision,” Duffy said.
“The fact that these companies are not upfront about the actual cost of delivery means they risk breaking the law.”
Since Consumer NZ began investigating delivery charges in May, Domino’s has added information to its website to let customers know it charges a 6% delivery service charge.
Domino’s also sent an email to its database customers notifying them of the charges.
Domino’s declined to comment.
Restaurant Brands, owner of Pizza Hut, did not respond to requests for comment.
Duffy said people were also caught off guard by the hidden costs of other popular fast food chains.
Most customers knew they were paying for delivery, but they might not know how much it was really costing them, he said.
Customers told Consumer NZ they thought it was intentionally misleading to have two sets of prices for the same menu, without being clear about the different pricing structure.
Consumer NZ said the pricing practices risked breaking the law and would file a complaint with the commission.
Third-party delivery services also increased the price of each order item when delivered, compared to if a customer was dining.