Service charges; resort fees; "surcharge" add-ons: If you've been startled by unexpected fees when you pay your check at a restaurant — or book a hotel room or buy a ticket to a game, you're far from alone. But if you live in California, change is coming. A new state law requiring price transparency is set to take effect in July.
"The law is simple: the price you see is the price you pay," Attorney General Rob Bonta said on Wednesday, as his office issued long-awaited guidance about a law that applies to thousands of businesses in a wide range of sectors.
Restaurant owners like Laurie Thomas, who heads the Golden Gate Restaurant Association, say the changes will bring higher prices and sticker shock, which could then raise a psychological hurdle in customers' dining habits. That, in turn, will hurt restaurants and their workers, she warns.
"If it's in the core price of the menu, there will be a pullback" in patrons' spending, she told NPR shortly before the attorney general released the guidelines. "There are some people, I think, that are hoping that the restaurants will just absorb that cost, because we've seen people say, 'Oh, it's too expensive with the service charge.' "
Restaurant Association head thinks it's perfectly OK to mislead customers into thinking that prices are lower than they actually are, and gouge them after they've consumed/used the product. Because having knowledge of true prices would cause some customers to make informed decisions that might hurt sales. What other product information could be withheld to boost sales? What product misinformation could be provided to get those customers to "yes"?
Does this include sales tax? If you see a burger on the menu for $8, will it really be $8, or will it be that plus tax? I love that this is across the board, yes there will be some sticker shock once it goes into effect, but that will affect all restaurants, and consumers will adapt quickly.
Don't just do restaurants, do all stores. Ideally all price stickers are inclusive of tax.
If that was the case, I'd totally pay in cash more, which means less waste to the payment networks.
It’s bizarre to non-Americans that their sales tax is only visible when the bill comes. Australia for example has a 10% Goods and Services tax across the board and that is included in the price you see on the menu, on the shelf or in the commercial. The exclusions being goods sold B2B which are usually quoted excluding GST, as businesses can claim GST they pay as a rebate. They know the true cost to their business and keeping tax separate makes it easier to record and track their liabilities from a bookkeeping perspective.
Then problem is, depending on the state, some towns can add on to the state tax rate. This means if you shop at the same retailer one town over the sales tax might be cheaper.
And that’s before talking about states that lower the sales taxes in certain areas to try and drive business to those “less fortunate” communities.
You mean that this is a problem of the current system and why the US should switch to displaying price with tax included, right?
Because if there are different taxes for every town, how should the average customer know what he is going to pay?
Agreed; it is a problem with the current system.
How do you know what you’re going to pay at the register? You don’t. It’s a surprise (albeit a crappy one). Certain things don’t have tax (in certain states) so those items it’s easy to figure out.
Then the retailer one town over would have to have cheaper prices printed on their labels, what's the issue?
None; just explaining the argument that retailers use.
Gotcha. I still don't see the reasoning behind the argument, but I'm guessing you don't either?
I do not.
Probably something along the lines of “it’s more work for the retailer”. Which I could see being a potential issue for smaller stores. But overall, no, I don’t get it and the price on the shelf/sign should be what I pay at the register.
If you label and ring up all your stuff by hand without some digital inventory system, yeah, that's gonna be work.
So what? Print the fucking price I pay.
I agree.