Why you might see a 'COVID-19' fee on your next restaurant or hair salon bill
If you venture out to the hair salon, the dentist or a restaurant, check your receipt — some businesses are adding a “COVID-19 surcharge” to compensate for rising food and personal protective equipment (PPE) costs incurred by the pandemic.
According to tweets sent with the Twitter hashtag #COVIDSurcharge, the fee, which is determined by each business, is seen by consumers as either a small price to pay for staying safe in public or “ridiculous” and sour marketing when many are financially hurting from the health crises.
Business owners interviewed by Yahoo Life say the surcharge has been advertised on social media, store signage or over the telephone, a practice recommended by the Federal Trade Commission. “When merchants add additional fees, it is important these fees are clearly and conspicuously disclosed beforehand so consumers know what they’re paying,” an FTC spokesperson tells Yahoo Life.
Last month, Brian Staack, the owner of Bootleggers BBQ in West Plains, Missouri added a 5 percent surcharge to each bill after his meat supplier hiked the prices of ground beef and brisket by 162 percent and almost 200 percent respectively, and he spent $800 on face masks for his staff of 26. But angry customers tied up the restaurant phone line. “The harassment our employees took, mostly from people across the country, was crazy,” Staack tells Yahoo Life.
So the owner dropped the fee after 48 hours— which cost each table less than one dollar — and raised his meal prices, printing out new weekly menus that reflect the increase.
Brad White, the owner of Goog’s Pub & Grub in Holland, Mich., added a $1 surcharge to each meal when the price of meat catapulted. “I went from paying $1.80 for an eight-ounce hamburger patty to $4,” he tells Yahoo Life. “We were selling at a loss.” Shutting down the dining room also meant spending $8,542 on paper napkins, plates and cups from March to June (last year, during the same period, he spent almost $2,500 on the same items). Still, people living 400 miles away in Missouri called to complain. Since Goog’s re-opened its dining room at 50-percent capacity on June 8, the surcharge no longer applies.
Meanwhile, in hair salons, where clients sit for hours under stylists, PPE and sanitation are essential. That’s why Oliver Steinnagel, the owner of Oliver’s Hair Salon in Overland Park, Kansas has spent $3,000 on face masks (1,000 of which he’s used since his May 8 re-opening) for staff and customers and $174.99 on eight automatic hand sanitizers.
Steinnagel also lost business by removing 18 chairs for social distance measures and staggering appointments to adequately sanitize and dry each station. “You calculate all these [extra] costs and it’s in the thousands,” he tells Yahoo Life. The salon temporarily added a $3 charge to each bill, which Steinnagel says most clients understand.
Rinse, a laundry-and-dry clean delivery service, which operates in Los Angeles, Boston, Chicago and Washington, D.C., made its $5 “Health & Safety Fee” easier to bare — customers that picked up orders on or after April 16 receive a full credit three months from the date of delivery to be used within a six-month period. CEO Ajay Prakash tells Yahoo Life in a statement, “Overall customer response to our Health & Safety Fee has been positive and understanding, primarily because we were transparent [and] emphasized this was temporary...”
You might even see the surcharge following a visit to the dentist. According to the American Dental Association (ADA), some dentists charge more because the cost of PPE “has increased considerably.”
“The dental business model is different from the medical model,” an ADA spokesperson tells Yahoo Life. “Almost all dental practices must now adhere to higher infection control standards and face increasing prices for personal protective equipment to protect our patients and care providers. The large majority of dental practitioners are solo or small business groups and the cost for each patient visit has increased for procedures in the dental office.”
The ADA wants dentists to make surcharges absolutely clear and “has recommended that dental benefit carriers should either adjust the maximum allowable fees for all procedures to cover the increased costs of PPE or allow an additional standard fee per date of service per patient,” a spokesperson tells Yahoo Life. David Allen, a spokesperson for America’s Health Insurance Plans (AHIP) adds that some dental plans have volunteered to pay for PPE for specific periods of time and at different amounts, arranged for PPE discounts from dental supply vendors or made grants and loans accessible to dentists.
But not all doctors are following suit. The American College of Obstetricians and Gynecologists (ACOG) tells Yahoo Life that its practice management analysts are not aware of the surcharge and the American College of Physicians (ACP) declined to comment when asked by Yahoo Life.
"Any private business can put any surcharge they want on any service they provide, because of the COVID-19 pandemic or otherwise," Barry Moore, president and chief executive officer at Better Business Bureau of Central Virginia tells Yahoo Life. "However, I strongly urge businesses doing so, if they want to keep their customers coming back, to post an easily seen public notice to the fact —on entrances, menus, websites— they'll be adding a 'COVID-19' temporary surcharge to the bill. Always being upfront with consumers on charges, including surcharges, is just good, honest business.”
For the latest coronavirus news and updates, follow along at https://news.yahoo.com/coronavirus. According to experts, people over 60 and those who are immunocompromised continue to be the most at risk. If you have questions, please reference the CDC’s and WHO’s resource guides.
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