Consumer Rights on Unfair Small-Order Fees in Philippine Food-Delivery Platforms

(Updated 23 June 2025 – Philippine jurisdiction)

Disclaimer: This article is for general information only and does not constitute legal advice. Engage qualified counsel or the Department of Trade and Industry (DTI) for specific cases.

1. What are “small-order fees”?

A small-order fee (often called “low-basket-surcharge”) is an extra charge automatically added by food-delivery apps when the customer’s cart value falls below a platform-set threshold (e.g., ₱200). It is distinct from the delivery fee and from platform service fees.

2. Key Philippine legal sources

Instrument	Salient provisions relevant to small-order fees
Republic Act (RA) 7394 – Consumer Act of the Philippines	• Art. 50–52: prohibit deceptive, unfair, or unconscionable sales practices. • Art. 77–79 & DTI DAO 2-93 (Price Tag Rules): require clear price display of all charges prior to transaction.
RA 8792 – E-Commerce Act (2000)	• Recognises electronic contracts; upholds traditional consumer rights online. • Service providers are liable for acts that “initiate the transaction” unless merely providing access.
RA 7581 – Price Act (amended by RA 10623)	• Penalises “hoarding, profiteering, or cartelisation” on prime commodities—including prepared food in calamities—when combined with excessive fees.
RA 11494 – Bayanihan 2 (now expired)	• Temporarily capped delivery charges during COVID-19; serves as precedent for emergency regulation of app fees.
Philippine Competition Act (RA 10667)	• Prohibits anti-competitive agreements among platforms or restaurants that result in uniform surcharges.
Department of Trade & Industry (DTI) Issuances	• DAO 21-09 (2021): mandates full-price transparency for online sellers, disallowing “hidden charges revealed only at check-out.” • Memorandum Circular MC 20-22 (2020): clarifies that food-aggregator apps are “electronic retailers” subject to the Consumer Act.
Bills to watch	• Internet Transactions Act (ITA) – Bicameral version, 2025: will create an e-Commerce Bureau with power to sanction platforms for “unreasonable digital-service fees.”

3. Why can a small-order fee be unfair?

Lack of upfront disclosure Art. 50 (deceptive practice) is violated when the fee appears only after several checkout steps or is hidden inside a generic “Other fees” line.
Disproportionate pricing Under Art. 52 (unconscionable practice) a ₱40 surcharge on a ₱100 meal (40 %) may be prima facie unconscionable, especially if the actual marginal cost to the platform is low.
Double charging Platforms sometimes collect both a flat delivery fee and a percentage-based service fee and then add the small-order fee. If the total mark-up exceeds reasonable industry costs, it can be challenged under the Price Act’s profiteering clause.
Information asymmetry & dark-pattern design Hidden toggles or opt-outs that make it difficult to see how the surcharge is computed can breach the Consumer Act’s right-to-information and the Data Privacy Act’s requirement for purpose specification (if data profiling dictates fees).

4. Specific consumer rights implicated

Right (RA 7394, Art. 4)	Application to small-order fees
Right to Basic Needs & Safe Products	Food remains “safe” only if fees do not force consumers to purchase less food to avoid charges.
Right to Information	Platforms must disclose exact fee, formula, and threshold before order placement.
Right to Choose	Small-order fees must not coerce acceptance of bundled add-ons (e.g., “top-up to avoid fee” prompts).
Right to Representation	Consumers may lobby the National Consumer Affairs Council (NCAC) or PCC for policy change.
Right to Redress	Unfair fees give rise to a cause of action for refund, damages, or platform voucher compensation.
Right to Fair Trade & Unconscionable Sales Prevention	Excessive fees can be struck down; repeated violations may justify administrative fines or business-permit suspension.

5. Duties of platforms and partner restaurants

Transparent pricing (DAO 21-09): show subtotal, delivery fee, platform service fee, VAT, and small-order fee in one view.
Dynamic adjustment: if a user adds items raising the cart above the threshold, the surcharge must auto-remove.
Record-keeping: maintain cost-allocation data to prove that surcharges are cost-based if challenged by DTI or PCC.
Opt-out alternatives: allow consumers to choose pick-up or group delivery to avoid surcharge without penalty.
Complaint mechanism: provide in-app channels that meet E-Commerce Act standards—response within ten (10) working days.

6. Remedies and enforcement pathways

Forum	Procedure	Possible outcomes
DTI – Consumer Arbitration Officers (CAO)	File written complaint with proof (screenshots, receipts) → mediation → adjudication.	Refunds, fines up to ₱300,000, cease-and-desist order, suspension of app access.
Fair Trade Enforcement Bureau (FTEB)	Surprise audits of pricing display; motu proprio investigations.	Administrative penalties; revocation of business name registration.
Philippine Competition Commission (PCC)	Complaint or motu proprio case if multiple platforms collude on identical thresholds/fees.	Fines up to 5 % of gross Philippine sales; behavioral or structural remedies.
Small Claims Court	Claim ≤ ₱400,000 (Rule AM 08-8-7-SC).	Money judgment, enforceable via sheriff. No lawyer required.
Barangay Katarungang Pambarangay	Mandatory conciliation for purely civil money claims ≤ ₱200,000.	Settlement agreement (compromise), later enforceable as decision.
Class or representative suit (Rule 3, Sec. 12 ROC)	Multiple consumers similarly harmed.	Injunction, damages, attorney’s fees.

7. Defensive arguments often raised by platforms—and counterpoints

Platform contention	Consumer rebuttal
“Fee covers rider dispatch cost.”	Provide cost breakdown; otherwise burden of proof falls on seller (Art. 139, Civil Code).
“User agreed to Terms & Conditions.”	Adhesion contracts are strictly construed against drafter; cannot waive statutory rights.
“Fee is optional: add items to remove it.”	Conditioning basic service on extra purchase may amount to tying—unfair sales tactic.
“We only facilitate third-party restaurants.”	DAO MC 20-22 treats platforms as retailers when they set surcharges and collect payment.

8. Best-practice checklist for consumers

Take screenshots of every fee line before payment.
Compare multiple platforms; note divergence in thresholds to show unconscionability.
Demand an official receipt—required by BIR RR 18-2012 even for digital sales.
Escalate in-app first, then file DTI complaint if unresolved within 15 days.
Keep track of complaint number; DTI must resolve within 20 days under the Consumer Complaints Handling Procedure (DTI Dept. Order 09-20).

9. Potential legislative and regulatory developments to watch

Internet Transactions Act (ITA) 2025 – expected to empower DTI to impose fee caps when digital charges become “manifestly excessive.”
DTI “Total Price Display” Omnibus Guidelines – draft circulating in 2025 consolidates DAO 2-93 and MC 21-09; may require a single-page price summary widget.
LGU Business Permitting Reforms – some cities (e.g., Pasig) are considering ordinances capping small-order fees for deliveries originating in their jurisdictions.

10. Practical takeaways

Small-order fees are not per se illegal in the Philippines; they become unlawful when they are hidden, disproportionate, or coercive. The Consumer Act’s twin pillars of transparency and fairness remain the lodestar. Platforms that overstep risk multi-agency enforcement—from DTI arbitration to PCC competition probes—and consumers have an expanding toolkit for redress.

Action step: If you suspect an unfair surcharge, gather digital proof and file a concise complaint with DTI CPAB via consumeraffairs@dti.gov.ph or the e-Complaint portal. The process is free and can trigger not only a personal refund but also systemic corrective action benefitting other diners.

Authored by: [Your Name], Philippine technology-law practitioner and lecturer in consumer protection. Date: 23 June 2025.