Popular cafe ditches controversial bill detail   
A suburban cafe has shocked customers by removing its weekend surcharge, which has become a staple of the hospitality industry.


News.com.au
November 22, 2025

A cafe has announced its surprising decision to remove weekend surcharges.

James Xu opened Lost Sheep Cafe in the Melbourne suburb in Ivanhoe a year ago. Like most cafes, the business had a weekend surcharge on 10 per cent.

However earlier this month he revealed on TikTok that the cafe was ditching the weekend surcharge.   

“It’s all because of you,” he said in the video.

“In one year our revenue for October went from $46K to $84K — that’s an 82 per cent increase. And we can’t achieve this without your support.

“To say thank you to our amazing community we are removing the weekend surcharge from now on.”


Mr Xu explained to news.com.au the weekend surcharge was in place to help cover penalty rates for staff, explaining the cost of running a hospitality business has “increased dramatically since Covid”.

After being completely embraced by the Ivanhoe community he said he wanted to find a meaningful way to give back. Removing the surcharge felt like the best way.

The announcement sparked a lot of conversation.



“Good to see a cafe is able to make enough profit to remove weekend surcharges. I wish I could afford to do this at my cafe,” one social media user said.iOne commented: “Fabulous work.”
“Thank you for removing the weekend surcharge. I refuse to go to cafes/restaurants with surcharges,” another commented.

Another added: “Love the transparency and giving back!”

“So many other business need to follow this. Well done to you,” another commented.

One added: “Well done. Fantastic. That’s a huge move and I will support you every day of the week.”

“Good on you! Well done on achieving a growth like that,” another social media user said.

Mr Xu said that the reaction to the announcement has been huge.

“The reaction has been huge — our post announcing it went viral on both Instagram and TikTok. People absolutely loved it, and the positivity has been overwhelming,” he said.

Mr Xu added that every business had its own set of circumstances and no one should follow Lost Sheep’s move blindly.


“At the end of the day, you have to do what’s right for your staff, your customers, and your community,” he said.

“For us, we made the call to absorb the penalty rate costs as a way to give back while still keeping the business afloat.

“We’re incredibly proud of the community we’ve built so far, and we’re excited to keep growing it. We also have an amazing fusion brunch menu and some great specialty drinks that we love sharing with everyone who visits Lost Sheep.”

whiteknight wrote on Nov 23^rd, 2025 at 9:13am:



So staff should be paid more on weekends but  not customers.

What is your logic there?

only someone who has no idea how to run their business says they need a surcharge to cover wages on weekends. Your mark up on goods and services sold should be based on total expenditure for the year, that includes the cost of wages. Claiming you need surcharge to cover a known expense is either incompetence or profiteering.

It's only the hospitality industry that claims to be that incompetent. Most other industries can manage to cover overtime and penalty rates without charging surcharges. Buy a roll of sheet metal from the steelworks and you don't pay extra for the roll milled on a sunday.