Ban on hidden business fees is about to take effect in California. How does it work?
Update: Gov. Gavin Newsom’s office confirmed June 29 that he signed SB 1524, legislation that allows restaurants to continue adding surcharges to diners’ checks — fees that the industry says are crucial to the survival of these businesses — so long as businesses state those fees “clearly and conspicuously” on menus.
Original story:
A new California law will prohibit restaurants and other businesses from using hidden fees to attract customers with seemingly low prices.
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 at the final stage of purchasing, the bill states.
“This act is not intended to prohibit any particular method of determining prices for goods or services,” the bill states. “This act is intended to regulate how prices are advertised, displayed, or offered.”
Here’s how the new law works:
How does new California ban on hidden fees work?
When SB 478 takes effect on July 1, you’ll know exactly how much you’re paying and what you’re paying for when it comes time to pay your total.
The law applies to additional hidden fees related to online purchases, such as concert tickets or hotel rooms and food delivery.
Businesses will be required to disclose all charges ahead of time. This does not apply to taxes and government fees.
“Californians will know up front how much they’re being asked to pay, and no longer be surprised by hidden junk fees,” state Sen. Nancy Skinner, D-Berkeley, said in an October statement from the Office of the Attorney General.
Are there any exceptions to new state law?
Some exceptions apply to car rental companies and motor vehicle dealerships.
Car rental companies will not be in violation of the law when including a disclaimer that additional mandatory charges can be imposed.
Dealerships will not be in violation for not disclosing exact registration or licensing fees in the payments.
This story was originally published June 25, 2024 at 6:00 AM with the headline "Ban on hidden business fees is about to take effect in California. How does it work?."
