SACRAMENTO — Some California restaurants are bracing for big changes to how they charge customers as a new law takes effect this summer that bans hidden fees from people's bills.
The state is cracking down on fees tacked onto the bottom of restaurant bills.
"Hidden fees are bad for consumers and bad for competition," said Eleanor Blume, California's assistant attorney general.
They're sometimes called a competitive wage fee, or cost of living surcharge.
"Businesses use hidden fees or junk fees to pitch an artificially low headline price to attract a customer before revealing additional charges," Blume said.
A number of restaurants across the region have the extra charge. The cost is 23 percent at Allora in Sacramento, and Hawks Public House charges 3 percent on each bill and 20 percent for large groups.
Hawks owner Molly Hawks said the money helps boost the wages of the staff who work behind the scenes and don't get tips. This new law that takes effect in July prohibits restaurants from charging any extra fees other than tax.
State Senator Bill Dodd said it's part of a broader effort to eliminate confusing surcharges and also applies to things like concert tickets and hotel resort fees.
"The principle behind this bill is simple: the final purchase price for a good or service shouldn't be a mystery for California consumers," Sen. Dodd said.
The unexpected costs are also getting the attention of President Biden, who opposed them in his 2023 State of the Union speech.
"My administration has proposed rules to make cable, travel, utilities and online ticket sellers tell you the total price upfront so there's no surprises," President Biden said in his speech. "It matters."
The state attorney general's office said these fees cost consumers billions of dollars each year.
"In California, the price listed should be the price you pay," Blume said. "It's pretty simple."
The attorney general's office said restaurants can still raise prices on menu items if they want to provide higher employee salaries or pay for rising supply costs.
Starting July 1, Senate Bill 478 will ban so-called junk fees on purchases made across California. This law aims to prohibit drip pricing, where a price shown to consumers is lower than what they actually end up paying for a product or service
service
Noun. usługa f. (economics) service (paid activity consisting in performing a task)
On July 1, 2024, California banned hidden fees and deceptive “drip pricing” practices. The law applies to businesses selling or leasing goods and services for personal use in California, as well as resellers of goods and services like event tickets and online platforms.
Senate Bill 1524, essentially an amendment to SB 478, allows food service businesses to charge service fees as long as they're “clearly and conspicuously” displayed alongside an explanation of where the money is going. The bill was approved by the state Senate on Thursday, and was signed into law by Newsom on Saturday.
We believe that allowing the many restaurants who for decades have used auto gratuity instead of tips, (which is more fair and equitable), and more recently who have added service charges to help offset things like the SF Health Care Security Ordinance, will make it possible for restaurants to continue to support pay ...
Beginning July 1, 2024, the “Honest Pricing Law” or “Hidden Fees Statute,” SB 478, which was recently amended by SB 1524, makes it illegal for most businesses to advertise or list a price for a good or service that does not include all required fees or charges other than certain government taxes and shipping costs.
While most consumers expect to pay specific fees for the services they use, additional charges that they were unaware of when they signed up may be added. These are called hidden or undisclosed fees. They may appear in the fine print on a contract.
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California Senate Bill 478 (SB 478) targets the practice of using a lower price to attract consumers and then tacking on additional required fees later in the buying process – sometimes referred to as “junk fees” or “drip pricing.” SB 478 amends California's Consumers Legal Remedies Act to add to the list of unfair and ...
The new law aims to prohibit "junk fees" across a range of businesses, including restaurants, bars and delivery apps. Restaurants will need to factor surcharge fees into menu prices, as opposed to simply advertising them at the end of a bill.
Compulsory service charge: The customer Must be notified before ordering. Only when the consumer receives poor service can they refuse to pay. Discretionary service charge: This fee may be added to the bill receipt at the end of the meal, but the client is free to decline it.
The new law, officially known as the Consumers Legal Remedies Act, allows restaurants, bars, food concessions, grocery stores, and grocery delivery services to continue charging service fees, healthcare costs, and other surcharges as long as the charges are clearly listed for customers to see.
“Under the law, a restaurant cannot charge an additional surcharge on top of the price listed,” the office shared in an FAQ. That includes gratuities that are “not voluntary.” As part of the bill's legislation, prices for goods and services must include all fees the consumer is required to pay.
Is it Legal to Surcharge Credit Card Transactions in California? Effective July 1, 2024, it's illegal to surcharge credit card transactions in California.
Generally, a tip, gratuity, or service charge (tip) is optional if your customer adds the amount to the bill, or leaves a separate amount in addition to the actual amount due from your sale of meals, food, and drinks that include services.
The reason that many venues charge a convenience fee is that the bank and processor service both take a small percentage from each credit card payment the business processes. Worse for companies, this is not an absolutely predictable amount because each individual transaction could come with additional costs.
A new law created by Assembly Bill 72 (Chapter 492, Statutes of 2016) protects consumers from surprise medical bills when they go to an in-network health facility and receive care from an out-of-network provider without their consent.
Starting next year, California businesses will be prohibited from using hidden fees to attract customers with seemingly low prices. The rules surrounding “junk” fees — from cell phone to food delivery costs — will be stiffened beginning July 2024. California Gov.
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Introduction: My name is Chrissy Homenick, I am a tender, funny, determined, tender, glorious, fancy, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.
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