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Is a coronavirus surcharge legal? Businesses pass increased expenses to customers

Saturday, June 20, 2020

Businesses are taking more precautions as they open up, including more cleaning and PPE for staff. Now, some businesses are passing those increased expenses along to the customer with a "coronavirus surcharge."

SAN FRANCISCO (KGO) -- Imagine being laid off because of the novel coronavirus pandemic, only to then be charged more for goods and services because of it. It's happening.

The coronavirus is creating a changed marketplace and a part of that is the "COVID-19 surcharge."

Petaluma dentist Dr. Yolanda Mangrum showed ABC7 News reporter Luz Pena the special precautions taken to protect patients from the coronavirus. It is a lot of work.

We don't know if her practice is charging extra for the service. I asked, but haven't received an answer. However, plenty of other dentists are adding a surcharge.

Jenny Lee emailed 7 On Your Side to find out if it is legal.

"I received this email from my dentist," she wrote, "who I actually have a great relationship with, he is a great dentist by the way, I was very surprised as I was reading on... there was a $20 surcharge I guess for protective... PPE's."

PPE is an acronym for "Personal Protective Equipment."

The answer to her question is, in California if you are told upfront, a surcharge is legal?

Nearly every service business is looking at or already adding coronavirus surcharges.

CreditCards.com analyst Ted Rossman is an expert on these matters.

"What is controversial about these COVID surcharges is when it appears as a line item. I think that is really the key distinction," he tells me. "A lot of people are saying, 'Huh, I don't like this. I feel really nickel and dimed. What are you going to do next? Charge me for the air conditioning?'"

I asked for your opinion about this on Facebook.

There was disagreement on whether it is fair or not, but most did not want to pay a surcharge.

"I would not pay." "Absolutely not!" "No thank you!"

"It's legal, but customers don't like it," Rossman says. "So American Express has done some research into credit card surcharges which are related, but a little bit different, and they found that 85% of customers say they would take their business elsewhere."

When doing business these days, it is good to ask in advance if there is a surcharge, then make a decision if it is worth it to you.

Take a look at more stories by Michael Finney and 7 On Your Side.

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