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SB 1524 Signed: Are Card Fees Now Legal in California?


Senate Bill 1524 has stirred significant attention within California's restaurant industry by clarifying the regulations surrounding service charges. However, this legislative shift has also sparked broader questions about the legality of card fees in California. Evident Business Solutions is here to break down these complexities, ensuring that your business understands and complies with the current laws and payment network regulations.


Understanding Senate Bill 1524


SB 1524 provides specific allowances for restaurants to apply certain mandatory service charges, such as large party gratuities, provided these fees are transparently disclosed before customers order. This clarification was crucial after the broader implications of SB 478, which aimed to eliminate undisclosed fees, potentially impacting typical restaurant practices.


Legality vs. Compliance


While SB 1524 addresses service charges, it's important to note that the bill does not extend to card surcharges. In California, the legality of adding a surcharge to card transactions is governed by both state law and payment network guidelines from entities such as Visa and MasterCard.


Compliance with these guidelines is essential to avoid severe penalties. These can include hefty fines or even inclusion on the MATCH list (Member Alert to Control High-risk Merchants), which can severely disrupt a business's ability to process card payments.


Retailer Considerations and the Impact of SB 478


While Senate Bill 1524 provides specific relief for California restaurants regarding service charges, it's important to note that SB 1524 does not extend to retailers. For retailers, the broader implications of Senate Bill 478 still apply. SB 478, aimed at eliminating hidden fees, mandates that all advertised prices include any potential additional fees. This means retailers cannot add separate surcharges at the point of sale, including credit card surcharges, and must ensure transparent pricing.


Alternatives and Compliance Strategies


Evident Business Solutions offers innovative strategies and compliance solutions to help navigate the complexities of card fees:


  1. Cash Discount and Dual Pricing Programs: These strategies encourage cash transactions by offering discounts or displaying different pricing for cash and card payments, ensuring transparency and compliance.

  2. Interchange Optimization: Through our interchange optimization program, we help businesses benefit from the lowest possible interchange rates, reducing the costs associated with card processing.

  3. Surcharge Transparency Tools: Our advanced equipment differentiates between credit and debit card transactions, allowing accurate and compliant surcharge applications.


How Evident Business Solutions Can Assist Your Business


We provide a comprehensive suite of services tailored to ensure your business remains compliant with both state laws and card network regulations:


  • Compliance Audits: We review your pricing and fee structures to ensure they meet all regulatory requirements.

  • Staff Training and Support: We offer educational workshops and resources to help your team implement new pricing strategies effectively.

  • Advanced Payment Technologies: We implement state-of-the-art payment solutions to enhance operational efficiency and compliance.


Need Help or Have Questions?


If you're unsure about how SB 1524 impacts your business or need assistance with implementing compliant payment strategies, contact Evident Business Solutions. We're here to support your business through these changes and ensure your operations continue to thrive.


Reach out today for more information or to schedule a consultation. Visit our website or call us directly. Let Evident Business Solutions help you navigate these regulatory changes effectively and confidently.


Stay informed and maintain compliance with Evident Business Solutions, your partner in navigating the evolving landscape of business regulations.

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