Minnesota Governor Tim Walz has enacted a new law aimed at enhancing price transparency across various industries, including restaurants. Effective from January 1, this legislation mandates that all additional fees be clearly disclosed to customers before service. Governor Walz expressed his commitment to ending hidden fees on services ranging from dining and entertainment to banking and hospitality, emphasizing the protection of consumer interests and the prevention of deceptive business practices.
Under the new law, businesses must proactively inform customers about any fees that will be added to their bills and ensure that all advertising reflects the total cost. Food delivery apps are required to display the final price, inclusive of all fees and markups, before customer checkout. The legislation also stipulates that any mandatory gratuities must be declared upfront and distributed entirely to the service employees.
Lieutenant Governor Peggy Flanagan highlighted the common frustration consumers face with unexpected service charges, stressing the law’s role in fostering transparency. This legislative move follows similar actions in California and Illinois, where efforts to implement price transparency are underway. California has already issued guidelines for businesses to comply with these regulations, set to take effect in July.
The broader national context includes potential federal actions against junk fees, with President Biden indicating that the Consumer Financial Protection Bureau’s measures could save consumers approximately $19.5 billion a year. The White House has also noted that Americans spend nearly $90 billion annually on various junk fees, with the restaurant industry alone accounting for over $10 billion of this total.
Despite opposition from the restaurant sector, which argues that its additional charges often cover health benefits and back-of-house tips rather than being unnecessary surcharges, the push for transparency continues. The National Restaurant Association has expressed concerns about the financial burdens this legislation could impose on restaurant operators, estimating a compliance cost of up to $3.5 billion annually.
