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California says restaurants must bake all of their add-on fees into menu prices
- exe34 2y agoCould they please also add all the federal, state, city, district, street tax into the prices please? The US is the only place I've ever been to where I never really knew what the price of groceries/snacks were going to be until after I've paid, no matter what it says on the label.
- yostrovs 2y agoEverywhere else you don't know what you pay for a cup of coffee and what you pay in taxes to have a right to buy it.
- noodlesUK 2y agoYeah you do, it's itemised on the receipt/invoice. You're legally required to break it down and provide a receipt so that business customers are able to correctly account for VAT. The only difference is which price goes on the tag/menu. I've heard this argument loads of times in the US, and it's clearly based on a belief that taxes should add friction so people understand how expensive they are. Most other countries have gone the other way and decided that transparent sticker pricing is more important than people understanding that their taxes are separate from the price of goods.
- Tor3 2y agoIncorrect. In, say, Europe, the final price is on the label and that's what you pay, the receipt lists the individual parts (core price, value added tax etc). And in Japan too - I'm looking at a receipt right now.
- exe34 2y agoNot only that, no tipping. Wages are negotiated between employees and employers, customers have no obligations in it.
- shagie 2y agohttps://www.today.com/food/restaurant-surcharges-t263507 https://www.today.com/food/restaurant-surcharges-t263507 > In Milan, in 2008, his bill at a pizzeria included a charge for napkins. “Who eats pizza without using at least one napkin?” he asked, but was summarily told that the restaurant incurs a cost to provide linens. “I’m still not sure why I wasn’t charged for sitting on a chair or using my utensils to eat my food, since these items also require costs to maintain,” he said, only half jokingly. > Two years later, in Florence, he actually was charged for the chair he was sitting in, or more specifically, the orientation of his chair. “My chair faced the piazza and, apparently, only a limited number of chairs had that view.” Even though he and his dining companion ordered more or less the same dish, Britton’s tab was a couple Euros more. He recalled: “The owners felt that it was necessary to charge more for the ‘exclusive’ experience.”
- baobun 2y agoI can assure you crap like this would be just as prevalent, nontransparent and unenforced regardless of VAT and pricing rules. It wouldn't actually pass already. Besides, I'm sure there are stories of foreign tourists being ripped of by unscrupulous businesses in the US too, if you ask around enough. For whatever reason, tourist hotspots in Italy have no shortage of unscrupulous business owners. If you've ever been to Rome in high season without a local guide, you either know what I mean or have some next-level karma cashed in.
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- kstrauser 2y agoHow does that work for online shopping? Do you put your location in at the start? Someone else mentioned online shops and it never occurred to me before now to wonder how to implement that.
- Tor3 2y agoVAT varies across countries but not inside countries (except that there may be a different VAT for, say, foodstuff than other items, or services). For online shopping in EU you pay the VAT of the destination (W. You select your location and you'll (normally) see "your" price, and in any case you'll always see "including VAT" mentioned.
- giansegato 2y agothat's not true. you have it written explicitly in the final check. you just don't have to do the mental gymnastics of figuring out how much you'll pay before ordering, which is absolutely absurd
- darkwater 2y agoThe only "good side" of having price sticker without tax is that taxes can change as they wish and it cannot be used as an excuse to change the price anyway. It's not that common but sometimes governments do apply VAT changes and usually sellers uses it to push prices up more, because people are already expecting it. Or if the VAT goes down, they don't reduce the final price that much. But overall, as an European, I prefer how we do it.
- baobun 2y agoHuh? It's typically stated on receipts, by law.
- RUnconcerned 2y agoOf course we do, the taxes are listed in the receipt. We just know how much we are paying ahead of time.
- Freak_NL 2y agoMostly because, and this is the kicker, that does not matter to the vast majority of people buying coffee. If I buy a cup of coffee with a listed price of €2, I pay €2. I know that 9% of that is value added tax (here in the Netherlands), and the receipt will show that too — if I care, which I usually don't. Value added taxes are pretty much a fact of life. I know it's there, and there is absolutely no need to constantly bug me about them by doing funny stuff with the pricing; just show me what I have to pay at the till.
- Retric 2y agoCompanies are legally required to break out VAT taxes on a bill because it’s a value added tax so it matters if something is an end product like a car or something request to make that end product. Basically if you buy a PC and the VAT on that sale was 200$ then the company selling you the item might send in 50$ and receipts for 150$ in VAT on items they used to manufacture that PC. Without that exception there’s a huge incentive to vertically integrate manufacturing which would have negative economic consequences.
- Freak_NL 2y agoSo? The receipt still shows the VAT amount, as required. This is not a problem.
- Retric 2y agoI was trying to clarify for anyone who might misunderstand your comment. It’s fine not to look at a receipt for the details, but I felt someone reading your comment may not realize it was available and you just didn’t look at it. You included a “and the receipt will show that too” but that’s the kind of thing people gloss over.
- exe34 2y agoTo be fair, if people will gloss over a random part of an answer, they'll gloss over a random part of another answer too.
- shagie 2y agoYou will need to have different prices on the drive through and dine in (and another for to go even if order at the dine in register). https://www.taxjar.com/blog/food/sales-tax-by-state-to-go-restaurant-orders https://www.taxjar.com/blog/food/sales-tax-by-state-to-go-re... https://www.cdtfa.ca.gov/industry/restaurant-owners/ https://www.cdtfa.ca.gov/industry/restaurant-owners/ - and in particular https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1603.html https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1603.html
- Sindisil 2y agoWhich is why it should be mandatory to show at least three numbers on price labels: product or service price, tax (optionally split by taxing authority), and final cost. Fees are different from taxes in that they're not mandated and the customer has no direct way to affect them.
- kstrauser 2y agoI’m more sympathetic to this. There are plenty of cases where the tax rate is a solid “it depends”. For example, in some places a cold burrito is a non-taxable grocery item and a hot burrito is a taxable meal. A local place here has one tax rate if you order your pie boxed up to go (grocery) and another if you ask for a fork and eat it there (meal). It’s a Schrôdinger’s tax where you don’t know what it’s going to be until you check out.
- voisin 2y agoAnd these categories aren’t known until you check out? Come on…
- kstrauser 2y agoI honestly don’t know all of them. Those are 2 examples I’m aware of.
- exe34 2y agoThey can still label them correctly. Here we have Tesco normal prices like £20 for a sandwich, £3 with a clubcard, and they just write both prices together.
- kstrauser 2y agoBut that’s not “£20 unless you microwave it, and then it’s £25”, is my point. Also, that better be a helluva sandwich.
- pseudalopex 2y ago> “£20 unless you microwave it, and then it’s £25” You just showed it can be written easily.
- exe34 2y ago£20 (£25 microwaved)
- hhgloocgvv 2y agoNow if only they’d outright ban tipping. Businesses should pay their employees, not the customer. Tipping culture in the US is insane.
- Lucasoato 2y agoTipping culture is just another tool of capitalism to exploit the working class.
- michael1999 2y agoIs that true? Or do Americans really like having servants?
- Zigurd 2y agoIt appears to be true based on restaurants being one of the worst industries for wage theft. Also tipping enables restaurants to give the impression that good earnings are possible without actually having the wherewithal to provide good wages, meanwhile not taking responsibility for workers.
- michael1999 2y agoCompletely agree that wage theft is terrible, and tipping is silly. But it seems hard to deny that people love servants when they love their DoorDash, lawn services, and maids so much.
- tacocataco 2y agoConsidering slavery is still legal as per the 13th amendment, yes. We are addicted to cheap/free labor for businesses.
- Nasrudith 2y agoThat doesn't actually mean anything, especially after I've seen how much you have abused definition of "exploit". Literally anything less than an impossible 100% profit pass-through is "exploitation". While operating under utterly-stupid economic assumptions about fixed universal values to add insult to injury.
- bell-cot 2y ago> 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.' " > Under the new guidelines, Thomas' organization said in an email to NPR, restaurants will be forced to impose "significant menu price increases." And if customers eat out less, it warns, "Not only will restaurants struggle, but workers will lose hours and jobs." Suggestion: Instead of mandating honest pricing, CA should just allow their tax collectors to add fees and tariffs and surcharges and other crap to the tax bills of businesses that do not do honest pricing. Then, when those businesses complain, whine about the pain of government having to absorb the lower revenues, and government workers losing hours and jobs, and having to make cuts to various feel-good programs, and ...
- grraaaaahhh 2y agoI know it's more complicated than this, but whenever I see businesses complaining about how including all the fees upfront will harm their business I can't help but read it as "Our business wouldn't be viable without the ability to lie to our customers."
- elil17 2y agoI don’t see how it’s more complicated than that actually
- MajimasEyepatch 2y agoSame with people who complain about paying a living wage or basic benefits. I once had an Uber driver who, apropos of nothing, started telling me that he was driving for Uber because he had to shut his old business down after Obamacare went into effect because he couldn’t afford to provide health insurance for his employees. I just sort of nodded along because I didn’t really have a choice, but I couldn’t help but think, “Sounds like the problem was just that you weren’t a very good businessman.”
- iampims 2y agoJuly 1st can’t come soon enough.
- fundad 2y agoI like that the pushback is people have to begrudgingly pay the full prices but won’t pay the full price if given the choice upfront. Do none of their customers come back after knowing the honest cost?
- robertlagrant 2y agoI think it's more like: you get pinged with a lovely cheap-looking offer from a nice restaurant, and so you click into the app and start building your pizza (or whatever) and by the time you see the real price you...just want the pizza.
- outime 2y agoThe good ol' https://en.wikipedia.org/wiki/Bait-and-switch https://en.wikipedia.org/wiki/Bait-and-switch in a way.
- re-thc 2y ago> The law is simple: the price you see is the price you pay Not true when you still have to tip.
- AndyNemmity 2y agoYou don't have to tip.
- yareal 2y agoYou don't. However, not tipping in the current system makes you an asshole. In a perfect world tipping wouldn't be required, but we don't live there right now, and until then all you're doing by not tipping is hitting some working class person in their pocketbook.
- derwiki 2y agoYou don’t have to tip, you just normally do. I had one abysmal experience waiting 90 minutes without our waitress even checking in on us, so I didn’t tip.
- manuelabeledo 2y agoI'm curious about where one draws the line. A "tip" has gone from some extra cash for an unexpectedly great job, to essentially expected.
- Detrytus 2y agoExcept you have to tip, because tipping is baked into the laws in the US. Tipped workers have a minimum wage of 1/3 of the regular one. Not tipping even the minimum, say, 12% is basically a crime.
- isoprophlex 2y agoOr, you could argue that the existence of such low minimum wages are the true crime, because now you have this shitty Nash equilibrium where you must beg for tips because everyone else does. "Buy beer at our place. Pay us 5 units of currency and we will get you this beer." There's absolutely zero reason for things to be more complicated than this.
- boxed 2y agoIt's crazy that California is doing this at all. And it's crazy they "fix" this same bug over and over for different types of businesses. Is this just so politicians can be seen doing something? This should be covered very clearly by the existing federal laws against fraud. Because that's what this is. If you say "10 dollars" and then after they say "11 dollars" when it's time to pay, that's just fraud.
- addicted 2y agoI mean it clearly isn’t covered under current definitions of fraud so lawmakers need to act on them. If there’s one thing the U.S. is good at it’s suing people and organizations. If this was such a clear case of fraud there’d be a phalanx of lawyers making millions suing the tens of thousands of restaurants in the country.
- boxed 2y agoThey're not acting on it though. They're fake-acting on it.
- gruez 2y ago>This should be covered very clearly by the existing federal laws against fraud. Because that's what this is. If you say "10 dollars" and then after they say "11 dollars" when it's time to pay, that's just fraud. Except it's not as straightforward as this. There's usually some fine print at the bottom that says there's a 20% service charge, taxes not included, or whatever.
- alphabettsy 2y agoNationwide please.
- shagie 2y agoThe federal government doesn't have authority over the state and city taxes, nor are the mom and pop restaurant off the county road up north doing any interstate commerce that it can use to mandate changes.
- kstrauser 2y agoIt’s not taxes here. Restaurants are adding 20% fees onto meals and charging them at checkout time when the bill comes. How that’s not false advertising is beyond me. I can’t imagine Target adding a random surcharge as I’m leaving and no one losing their mind.
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- jononomo 2y agoI want the US government to pass a law requiring all taxes to be included in the listed price at any retail outlet in the United States. It is ridiculous to see an item you're interested in buying, check the price tag, and get only an approximation of how much money you will have to spend to acquire it at the register. Often with small-dollar items, the exact amount of money is relevant. I might have a $5 bill, but not have $5.39. So if that item that says "$4.99" on the price sticker costs $5.39 when I get to the register, that is just a nuisance and a waste of everyone's time. And for what purpose? I can't believe that retail outlets don't already just price tax into the stated price. Are they concerned that people are going want to shop elsewhere and pay the same amount of money but also go through more nuisance and do more math in their head along the way because they prefer to initially see a lower price?
- erehweb 2y agoPricing without tax lets you use the same menu across different states.
- astura 2y agoIn 2019 this was a joke!! - https://youtube.com/watch?v=HFxpBJrLgXY&t=1m30s https://youtube.com/watch?v=HFxpBJrLgXY&t=1m30s "we just gouge you on the price... it's highlighted though, so it's transparent." People laughed cuz it was ridiculous. In 2024 it's reality and we have to make rules against it! Holy shit.
- amluto 2y agoThis bit is amazing: > Restaurant owners like Laurie Thomas, who heads the Golden Gate Restaurant Association, say the changes will bring higher prices and sticker shock So these restaurant owners think they’re avoiding sticker shock by making the stickers lie?
- voisin 2y agoThey are hoping to delay the sticker shock until the customer has crossed the rubicon. It’s highly unethical.
- piva00 2y agoAlso extremely annoying as a customer from a different culture. I've learned to always ask "what's the final price I will have to pay for this item?" everywhere I go in the USA. Restaurants, bars, shops, even the places I assume I will pay the sticker price I will ask that question to avoid any surprises.
- relaxing 2y agoWe do this to make up for all the money American tourists leave on restaurant tables in the EU.
- lolinder 2y agoI've seen this at hotels and such, but never in my life have I been presented with a mandatory fee at a restaurant. I get the tax and I tip and that's it. Is this a California thing in recent years? Is it just that I don't eat at the right kind of restaurants? Where and when did this start happening?
- dboreham 2y agoThe original prime culprit iirc was Jon and Vinny's in LA. I've had the mandatory service charge (which is not given to staff like tips) for several years. There are whole Reddid threads on it with contributions from ex staff going back years.
- kstrauser 2y agoIt’s not extremely common but I bump into it enough to triple-check my bill before deciding how much to tip. If there’s a service fee, I subtract that from what I was going to tip so that I’m not double-charged for service.
- astura 2y agoHere's an article on the new fees - https://www.today.com/food/restaurant-surcharges-t263507 https://www.today.com/food/restaurant-surcharges-t263507 >In the NRA’s August 2022 Restaurant Business Conditions Survey, of 4,200 restaurateurs surveyed, 16% have added surcharges. People have been sharing them online lately. Here's a few examples - https://www.reddit.com/r/mildlyinfuriating/comments/12huhmm/just_raise_the_prices_on_the_menu_i_dont_want_to/ https://www.reddit.com/r/mildlyinfuriating/comments/12huhmm/... https://www.reddit.com/r/mildlyinfuriating/comments/w3nep1/the_bartender_said_it_was_an_inflation_charge/ https://www.reddit.com/r/mildlyinfuriating/comments/w3nep1/t... https://www.reddit.com/r/ImpracticalJokers/comments/18ee5l5/you_got_gouged/ https://www.reddit.com/r/ImpracticalJokers/comments/18ee5l5/... https://www.reddit.com/r/mildlyinteresting/comments/z89xci/this_bar_i_went_to_in_the_philadelphia_area_has/ https://www.reddit.com/r/mildlyinteresting/comments/z89xci/t... https://www.reddit.com/r/mildlyinteresting/comments/1c9t4b6/random_fee_on_my_carry_out_order/ https://www.reddit.com/r/mildlyinteresting/comments/1c9t4b6/... https://www.reddit.com/r/mildlyinfuriating/comments/14ss46p/random_fees_on_restaurant_bills_becoming_more/ https://www.reddit.com/r/mildlyinfuriating/comments/14ss46p/...
- snakeyjake 2y ago>Many business owners — and restaurant owners in particular — have been dreading the change, which is poised to ban separate surcharges that restaurateurs have increasingly relied on to pay higher wages to staff, and to absorb discrete costs such as San Francisco's mandatory health care payments for workers. How can a meal in a restaurant near the University of Basel in Basel, Switzerland cost roughly the same as one in San Francisco when Basel's cost of living makes San Francisco look like an economically depressed suburb of Detroit?
- gruez 2y agoCan you provide sources for all the figures in your comment? Absent that, my guess would be real estate costs (ie. rent), which san francisco is infamous for.
- shagie 2y agohttps://www.sfgate.com/local/article/mini-chameleon-darryl-dea-stairway-to-nowhere-19410127.php https://www.sfgate.com/local/article/mini-chameleon-darryl-d... $900 per month for 75 sqft is apparently a reasonable deal. https://web.archive.org/web/20231018182445/https://sfbay.craigslist.org/sfc/off/d/san-francisco-doorway-opportunity-on/7677021859.html https://web.archive.org/web/20231018182445/https://sfbay.cra...
- simonsarris 2y agoI don't know what figures you're seeing, and I suspect restrictions and taxes Switzerland imposes on its labor relative to SF are very different. But in addition, Basel is like 2-3 miles wide and well connected. It should be highly possible for lower wage workers (from 3 possible countries! It borders France and Germany) to commute there. Mulhouse average salary is ~50% of Basel and right next door and has very cheap rental prices. The SF Peninsula has slightly higher difficulties importing cheap labor.
- seanmcdirmid 2y agoWe could choose a Swiss city like Lausanne that borders Evian only after an expensive boat ride across the lake, or Bern. Prices are all similar. When I moved to Lausanne from the Bay Area (San Carlos) 20 years ago I definitely experienced sticker shock, although the prices were all honest. No idea where it’s at now, but I’m sure the 10.5 CHF Big Mac meal at McDonald’s back then is alot more expensive now.
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- gooseyman 2y agoMarkets can only be efficient if knowledge of prices for competing goods and substitutes can be known. Drip pricing makes efficiency really, really hard. That said, this is less about efficiency in my view and more about getting rid of the dirty little FU on the bill and allowing customers to avoid a surprise. Restaurants are substitutes in calories sure, but menus, locations, decor, service will differ. I’m not sure I need efficiency in this space in that regard. However, once at a restaurant, I would like to have a rough idea when I order whether I’m in my personal budget for that meal. From that perspective, this feels great. If one doesn’t have to think about budget given financial prowess, this law matters little. If one does need to consider their budget but doesn’t, this law also matters little.
- DataDive 2y agoI don't know how prevalent my behavior is, but I eat out less since these random fees appeared. If the price were simply 15% higher, I think would not mind (again I am guessing, who knows really - needs some sort of experiment). I deeply dislike being quoted one price on the menu, but by the time I check out, it is notably higher. Once I add both the tax and the "fees," it is like paying for another complete entree. That unpleasant memory stays with me, even until the next time I consider eating out. But then, I am not in the restaurant business, and I have lots of sympathy for those that make a living in such a razor-thin profit environment. Do addon fees hurt more the businesses than help? I can't tell but I can provide my own behavior as an example.
- lern_too_spel 2y agoJust leave a bad review. I've seen restaurant reviews mentioning this, and I always up vote those reviews as helpful. Thanks to California legislators, I won't have to worry about this in California anymore, but I'll still have to be wary in other states.
- corn13read2 2y agoNow can we make delivery companies do this?
- gnicholas 2y agoThis is an interesting question. I don’t think the current law would apply to fixed delivery fees, but it could apply to fees that are tied to the cost of the order. I don’t think the fees are typically linear, though I don’t know since I try to avoid these services as much as possible.
- voisin 2y agoI’d love if Canada had retailers bake sales taxes into the price. What you see is what you pay.
- billy99k 2y agoThese sorts of laws are there to hide the fact that the government adds lots of taxes onto everyday goods. When it's 'baked into the price' there is no way to tell if the increase is because of the business owner or the government, and most people will just blame the business owner.
- ryandrake 2y agoIt just doesn't matter. If my coffee is $5, it's $5. It doesn't matter to me if $4.75 of that is coffee and $0.25 is tax, or if $4.50 of that is coffee and $0.50 is tax. I'm paying the same amount either way. I'm not going to suddenly decide not to buy it depending on the tax rate.
- xnx 2y agoDo hotels and rental cars next! Terrible shopping experience. "Resort fees" are total bs.
- gnicholas 2y agoAs far as I can tell this law isn’t limited to restaurants. It will be interesting to see if big hotel chains will have websites that operate differently in CA and elsewhere (like with CA privacy options). Hopefully this will benefit customers outside of CA as well.
- s1artibartfast 2y agoI would like it if California passed a law against hidden state taxes. Most recently, state regulators are making utilities implement income based pricing for electricity. This circumnavigates the sticker shock of state income taxes and democratic approval of subsidies.
- gnicholas 2y agoGood point. Unfortunately the CA legislature is the entity that passed the income-based utility pricing.
- lern_too_spel 2y agoYour description is wildly misleading. The electrical utilities already discount electrical bills for low income customers. https://www.cpuc.ca.gov/industries-and-topics/electrical-energy/electric-costs/care-fera-program https://www.cpuc.ca.gov/industries-and-topics/electrical-ene... The utilities wanted to change their pricing to have a fixed charge to be connected to the grid (as in most other states) and to lower the per unit cost of consumed energy. The legislators simply required that the fixed charge also be discounted for hookups to deed-restricted affordable housing and for low-income customers. https://www.cpuc.ca.gov/news-and-updates/all-news/cut-residential-electricity-prices https://www.cpuc.ca.gov/news-and-updates/all-news/cut-reside...
- s1artibartfast 2y agoI think my characterization is less misleading than yours. This isnt the application of existing discounts to an industry initiated desire for a fixed fee. The income based fixed charges to come into compliance with new state law AB-205 [1] Here is a summary from the AB-205 itself: "The bill would eliminate the cap on the amount of the fixed charge that the PUC may authorize. The bill would require the fixed charge to be established on an income-graduated basis, as provided, with no fewer than 3 income thresholds so that low-income ratepayers in each baseline territory would realize a lower average monthly bill without making any changes in usage." Either way, the law and it's predecessor require income discrimination by private companies, opposed to subsidizing low incomes from the general fund. It is absolutely a income redistribution transfer payment that doesnt go through the state taxes or the state budget. Ironically, this bill was passed as a trailer to the state budget [2]. [1] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB205 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml... [2] https://calmatters.org/commentary/2024/04/fixed-utility-bill-income-budget/ https://calmatters.org/commentary/2024/04/fixed-utility-bill...