US businesses charging extra fees to cover COVID-19 costs, but is it legal? 

Nearly a year into the pandemic’s gutting of the economy, businesses across the country are increasingly charging coronavirus-related fees, ranging from a $5 disinfection charge in a hair salon to $1,200 for extra food and cleaning in a senior living center, which are often undisclosed until the customer gets a bill.

According to a survey by The Washington Post of attorneys general across the country, U.S. consumers in 28 states have filed 510 complaints of coronavirus-related surcharges. 

However, not every state protects consumers from hidden fees. Medical insurance law in some states requires health care providers to offer refunds to patients who have been unfairly charged for personal protective equipment, but other states allow for businesses to tack on extra fees as long as they’re disclosed upfront. 

Small businesses and franchises have had to get creative out of desperation when gift card drives, individual tipping and fundraising by local chambers of commerce aren’t enough to pay the bills. Adding surcharges as a temporary bandage to help cover store closures, employee salaries and health benefits, personal protective equipment for staff, and increased sanitation, utilities and reopening costs is one approach some small businesses and franchises have taken to offset financial losses and stay open during the pandemic.

Starting in August, a handful of state officials—in New York, Connecticut, Arizona, Michigan and Massachusetts—issued guidance warning residents of hidden fees and businesses and insurers of the consequences of violating consumer protection and insurance laws. 

Sean Kennedy, the National Restaurant Association’s vice president for public affairs, says the restaurant industry especially has felt the need to institute extra charges.  

“The biggest challenge is, for most restaurants, it’s not going to be enough,” Kennedy says. “Gift cards and tipping are vital because it really is allowing us to survive week to week, but from a long-term perspective, we really need to see a restaurant-specific solution from the federal government.”  Read the full story.