California has recently introduced a new bill that would ban hidden fees that often plague consumers buying concert tickets, renting cars, and much more. The bill, SB 478, makes it illegal for companies to advertise low prices to consumers, then add hidden fees later bringing the total cost up. Reactions to the bill varied; while many consumers were happy to hear that hidden fees could be a thing of the past, the hospitality industry was concerned.
Enter Bill 1524, which would allow an exemption for restaurants to include service charges. The bill exempts “individual food or beverage items sold directly to a customer by a restaurant, bar, food concession, grocery store, or grocery delivery service” as long as the fee is displayed clearly for customers.
The bill was introduced by Senator Dodd; “This measure achieves the goal of providing consumers with up-front price transparency without inadvertently harming food service workers or small businesses…” he said in a recent statement.
The bill allows restaurants to still include a service charge, although it needs to be clearly displayed to customers before their bill arrives. “Clear, conspicuous disclosure of any fee, and a description of its purpose, would be required on all advertisements, menus or other displays that contain the price of a food or beverage item. It ensures restaurant customers are not shocked when they get their checks,” stated Senator Dodd.
Gavin Newsome officially signed the bill over the weekend, just in time for the Junk Fee Ban bill that begins today, July 1. So, while restaurants can keep service charges, you can expect to see the fees clearly displayed before placing your order.
The bill intends to increase transparency for consumers so they can make informed decisions while not hindering the success of restaurants and bars in California.