Kokua Line: Can businesses charge COVID-19 compliance fees?

Question: Some places are charging a “COVID-19 compliance service charge” of various amounts. I’ve seen it at 20% or a $20 flat fee or sometimes less. Is this legal?

Answer: Not if the business fails to disclose the surcharge upfront, fails to align it with the actual cost of the expense it claims to cover, or cites a nonexistent tax to blame the government for the upcharge. State law doesn’t prohibit businesses from breaking out fees like this, “but the problem arises with the next step, if it’s broken out but not disclosed properly, or what they claim they are using it for is not true, or it doesn’t correlate on a factual basis,” said Stephen Levins, executive director of the state Office of Consumer Protection, a division of the Department of Commerce and Consumer Affairs.

“Any business that is operating, if you have increased costs, the best practice is to just raise your prices. If you are going to break it out as a separate fee, you have to meet certain standards to avoid violating consumer protection laws” that prohibit unfair or deceptive trade practices, Levins said.

Kokua Line has heard from readers who paid pandemic fees at restaurants, hair salons and dentist offices. All said they were unaware of the added fee until they received their bill.

Levins said such a surcharge must be disclosed “clearly and conspicuously” prior to service. At a restaurant, the fee could be printed on the menu, for example, but not solely on a tiny sign in the window, he said. Several readers said businesses cited higher cleaning or sanitation expenses because of the pandemic. Levins said any surcharge must correlate to actual costs per customer. “You can’t come up with phantom names for fees just to make more money and make it seem like you are not raising your prices,” he said.

Also, a business can’t call it a government-imposed fee, even if the cost of doing business has risen because of government restrictions during the pandemic. “That’s not the same thing as a tax,” the proceeds of which go to the government, not the business, Levins said.

Patrons can object at the time to any consumer charge they perceive as an unjustified fee, although some readers we heard from said that would have been awkward because they had already eaten the meal, gotten their hair cut or had their teeth cleaned by the time they got the bill. Consumers also may follow up with the business in writing; the DCCA website has tips for doing this effectively. They also may file a complaint with the relevant DCCA division, which may trigger a state investigation. This is a fact-based, intensive process that requires consumers to provide detailed information; complaint forms are posted at cca.hawaii.gov/ consumer-complaints/.

Q: Regarding stun guns being legal soon in Hawaii (808ne.ws/122kline), does the Honolulu Police Department expect an influx of these weapons? Will it be doing any public safety campaigns or anything related to this law?

A: We asked HPD but did not receive a detailed reply. “The Honolulu Police Department is currently working with other city departments to develop a registration process for the public. Questions about the law itself may be directed to the state as the new legislation will apply statewide,” spokeswoman Michelle Yu said in an email.

Mahalo

A sincere thank you to an honest lady, Ms. Renee of Ali‘iolani Elementary School, who found and turned in my red wallet to Longs Kaimuki on Dec. 7. Thank you to Irene, Joy and Toni of Longs, who tried to contact me but couldn’t because my phone wasn’t working because of the Kona low heavy rain. Thank you to Lisa of the Japanese Cultural Center of Hawaii who notified me through my membership card inside the wallet! I appreciate all my new friends. I’m so grateful for Ms. Renee’s pure heart! — N.N.

Write to Kokua Line at Honolulu Star-Advertiser, 500 Ala Moana Blvd., Suite 7-500, Honolulu, HI 96813; call 808-529-4773; or email kokualine@staradvertiser.com.