California’s SB 478 – Another Flip Flop

California Has Flipped Flopped On Surcharging Again!

Here’s the 2024 update:

I say “flip flop” because they banned surcharging in 1985. Then, in 2018, they allowed surcharging as long as they did not mislead customers. Now, they’ve recently banned surcharging again.

So, can you still slap a surcharge on a credit card in California? Spoiler Alert: Nope. As of July 1, 2024, California’s latest surcharge law, SB 478, kicked in, banning most “junk fees” across the board.

But wait, there’s more! This law doesn’t just stop at credit card surcharges, you can also say goodbye to sneaky “service fees” and those delightful “resort fees” at hotels. 

Want the nitty-gritty? Keep reading for all the juicy details on how this affects your business (or your wallet). Just note we are not providing legal advice. Please consult your lawyer regarding your specific situation.

California’s Senate Bill 478: The Rundown

– All fees must be in the advertised price.

– No sneaky add-ons at checkout.

– Taxes are, of course, exempt from this. The state is not going to stop the business from tacking on those fees. 

– You can’t advertise a lower price than what customers actually pay.

– If you ignore this, you’re looking at a $1,000 fine per violation.

It’s all about stopping shady practices and keeping pricing transparent. However, businesses can just add 3% on everything they sell and offer a 3% cash discount if they want. 

Gyms, hotels, airlines, and concert venues will be the industries most affected by SB 478. 

Shockingly, restaurants are off the hook. Thanks to SB 1524, signed just days before SB 478 took effect, restaurants can still charge those beloved service fees and mandatory gratuities—just don’t forget to put them on the menu.

California’s no-fee party has the potential to spread nationwide if the FTC gets its way. The agency is considering similar rules, which could end hidden fees across the country.

The best defense against all of this is to make sure your credit card processor is not overbilling you. Let’s be honest… so many businesses are looking to surcharge because they are sick and tired of the high credit card processing fees. Take advantage of our FREE AUDIT and make sure you are not paying one penny too much. The average overbillings found is just over 40%. 

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