California’s Clear Billing Law Set to Transform Prices

California residents might start seeing a difference in restaurant prices across the board this July once a new law comes into effect. Let’s take a look at how these new prices could affect you.

Hidden Fees in Various Services

Image Credit: Shutterstock / frantic00

If you’ve ever been shocked by the extra fees sneaking onto your restaurant bill, showing up unexpectedly when booking a hotel, or snagging game tickets, California hears you loud and clear.

The “Honest Pricing Law”

Image Credit: Shutterstock / Aerial Mike

Starting this July, a new law dubbed the “Honest Pricing Law” or “Hidden Fees Statute” is rolling in, promising price transparency that could shake up how many places do business.

Attorney General’s Explanation

Image Credit: Shutterstock / Sheila Fitzgerald

Californian Attorney General Rob Bonta explained it in plain terms, “The law is simple: the price you see is the price you pay.” No more hidden surprises. The law is casting a wide net, reaching thousands of businesses across various sectors.

Scope of the Law

Image Credit: Shutterstock / YAKOBCHUK VIACHESLAV

“Our price transparency law is about clear and honest communication with consumers, so consumers can make the financial choices that are best for them and their families,” Bonta later said.

Changes Starting July 1

Image Credit: Pexels / Andrea Piacquadio

Come July 1, restaurants will have to revamp their menus, listing one price for each item, including any and all other necessary charges.

Exceptions to the Law

Image Credit: Shutterstock / lunopark

The only exceptions are optional fees, like tipping your server, which don’t typically come on a menu.

Prohibiting Drip Pricing

Image Credit: Shutterstock / sutadimages

The Office of the Attorney General’s website explains that the new law is “intended to specifically prohibit drip pricing, which involves advertising a price that is less than the actual price that a consumer will have to pay for a good or service.” Essentially, it stops businesses from advertising prices that don’t include all the fees you’ll actually pay.

Legal Consequences

Image Credit: Shutterstock / frantic00

And here’s the kicker: if a business slips up and doesn’t list all the charges, diners could be in for a huge windfall.

Protecting Consumer Rights

Image Credit: Shutterstock / Salivanchuk Semen

The law is on the customer’s side and allows for “actual damages of at least $1,000” if they mess up.

Enforcement Guidelines

Image Credit: Shutterstock / Jirapong Manustrong

While the state’s guidelines note they will be lenient on initial enforcement –  things like tips or fees that get paid directly to workers will get a pass – businesses could still get in hot water over private actions.

Leveling the Playing Field

Image Credit: Shutterstock / Ground Picture

The idea behind this law is to give you, as a consumer, a clear picture of what you’re actually going to pay. It’s about fairness, so businesses compete on a level playing field based on the real cost of their goods or services. This also helps you compare prices accurately between different sellers.

What Falls Under the Law

Image Credit: Shutterstock / Ralf Liebhold

This law covers pretty much anything you buy or rent for yourself, like event tickets, Airbnb stays, hotel rooms, eating out, or ordering food to your door.

Positive Feedback

Image Credit: Shutterstock / Thapana_Studio

While this change in the law has been welcomed by consumer rights groups and customers across the state, not everyone is happy.

Concerns from Restaurant Owners

Image Credit: Shutterstock / Ground Picture

Restaurant owners, especially, are feeling the pressure, as the law is essentially waving goodbye to surcharges.

Surcharge Dilemma

Image Credit: Shutterstock / wutzkohphoto

Restaurants have relied on these surcharges to pay higher wages in California and to cover the cost of worker healthcare initiatives that local governments have established across the state.

Impact on the Industry

Image Credit: Shutterstock / ekarin

Restaurant owners are worried that the lack of surcharges will negatively impact the industry – which is already struggling due to inflationary pressures – and could put diners off eating out when they see the real cost of their meal, reflected in increased prices for food.

Potential Economic Consequences

Image Credit: Shutterstock / Verin

They’re also worried that the “sticker shock” of seeing the real prices could lead to restaurants losing business, people losing their jobs, and a domino effect from that point on.

Public Opinion on Hidden Fees

Image Credit: Shutterstock / SFIO CRACHO

Fees at restaurants are already an unpopular occurrence with diners. According to a November study by the Pew Research Center, seven out of ten adults said they oppose restaurants adding automatic service charges or tips to customers’ bills.

Confusion and Customer Discomfort

Image Credit: Shutterstock / pashyksvsv

Despite customers not liking it, many restaurants still charge hidden fees. Service fees, in particular, are known for confusing customers, who often get stumped when it comes to tipping staff when they’ve just paid a 20% service fee.

Nationwide Implications

Image Credit: Shutterstock / Drazen Zigic

However this plays out, price transparency for consumers can only be a positive. This law is going to be the first of its kind in the U.S., which could mean that states across the nation could follow in California’s footsteps and begin to move toward transparent pricing – a move that would be welcomed by many in today’s economy.

Remote No More: 19 Companies Returning to the Office

Image Credit: Shutterstock / Monkey Business Images

As the pandemic wanes, companies are recalling remote workers back to the office, sparking debates on fairness, costs, and convenience. However, there are also notable productivity, coworking, and mental health benefits to consider. Feeling the effects of these changes? Remote No More: 19 Companies Returning to the Office

8 Costco Must Buys and 8 to Leave Behind

Image Credit: Pexels / Gustavo Fring

Ever wandered Costco’s aisles, questioning if that giant jar of pickles is a real bargain? Or debated buying tires where you get your rotisserie chicken? Welcome to the definitive guide to Costco shopping—a journey to save money, prevent regrets, and offer quirky insights into bulk buying. 8 Costco Must Buys and 8 to Leave Behind

23 Reasons Texas Is the Next Big Thing

Image Credit: Shutterstock / Sean Pavone

Texas is becoming a beacon of opportunity, blending cultural heritage with economic growth. From its landscapes to its industries, the Lone Star State offers a dynamic lifestyle. Here are 23 reasons why Texas stands out, attracting entrepreneurs, artists, tech professionals, and families seeking new beginnings. 23 Reasons Texas Is the Next Big Thing

15 Top Sites to Sell Your Unwanted Goods Besides Craigslist

Image Credit: Shutterstock / GaudiLab

Selling your unwanted items can declutter your space and boost your income. While Craigslist is popular, there are many alternatives with unique features and wider audiences. Explore these 15 Craigslist alternatives for selling everything from furniture to electronics, finding the perfect platform to turn clutter into cash. 15 Top Sites to Sell Your Unwanted Goods Besides Craigslist

Work from Anywhere: 19 Companies Still Supporting Remote Work

Image Credit: Shutterstock / insta_photos

Tired of commuting and craving work flexibility? You’re not alone. Many companies now offer remote work, benefiting both employees and employers. Ever wondered how this shift could enhance your work-life balance? Work from Anywhere: 19 Companies Still Supporting Remote Work

The postCalifornia’s Clear Billing Law Set to Transform Prices first appeared on Liberty & Wealth.

Featured Image Credit: Shutterstock / Monkey Business Images.

The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

+ posts

Leave a Comment