California's Senate Bill 478, effective July 1, 2024, addresses hidden fees including credit card surcharges. The legislation requires businesses to incorporate all mandatory fees into advertised prices rather than adding them during checkout-a practice known as "drip pricing."
Key Requirements for Businesses
For merchants, particularly restaurants and auto repair shops, this means surcharges for card payments must be built into menu or service pricing upfront. The law aims to ensure customers understand the complete cost before purchase without surprise charges at payment.
Exceptions and Distinctions
Certain transactions in regulated industries may be exempt from this requirement. Optional fees such as tips can still be added separately if clearly disclosed to customers.
Dual Pricing vs. SB 478
The legislation does not mandate dual pricing. Instead, it requires incorporating all mandatory fees into advertised prices upfront. Dual pricing involves displaying separate prices for cash versus credit payments-a different approach that must also maintain price transparency.
Purpose
The law's intent focuses on preventing deceptive pricing and promoting fair competition by ensuring total cost disclosure before purchase.
What This Means for Auto Repair Shops
Businesses currently charging card payment fees should review their pricing practices. Rate Remover Software's dual pricing solution ensures compliance by displaying both card and cash prices transparently, meeting the requirements of SB 478 while still allowing shops to offset processing costs.
See how our auto repair shop software handles credit card surcharge compliance. Contact us to discuss how dual pricing can work for your California shop.