A barbecue restaurant in Missouri, dentists in North Carolina, hair salons in New Jersey, the list goes on. Businesses across the country are tacking on a “COVID surcharge” to cover coronavirus-related expenses.
Laura James, VP of Innovation at Coachella Valley Economic Partnership, or CVEP, said she hasn’t heard of businesses tacking on this extra charge in the desert. She said if that does happen, it could backfire on the business.
“I don’t really think that the COVID surcharge is the consumer friendly way to do it,” James said. “I would rather see businesses price it into the cost of their goods and services just like they have everything else.”
A viewer emailed NBC Palm Springs and said her dentist in Palm Desert is doing a $20 surcharge for PPE. She said, “I was pretty appalled because I am not sure that every client should have to pay that much for their protective gear. It seemed a little excessive to me. I am not opposed to paying a little but not that much.”
The charge ranges from one businesses to the next but instead of adding a charge to the receipt, James recommends adding it to the product.
For example, a burger that costs $14 could cost $17 with a COVID surcharge. James said it would be smarter for the restaurant to tack on 50 cents to the original burger price, making it $14.50. She said a consumer would be less likely to notice the small increase and the restaurant could accumulate more revenue.
Tropicale Restaurant in Palm Springs already implemented an extra, optional charge at the start of the year but theirs is to help employees with health insurance.
“Employees get 100 percent coverage,” Dan Bunde, an employee at Tropicale said. “Paid for by the company with a small surcharge on our receipts to help offset those costs.”
The surcharge is two percent and not required. Tropicale has continued to pay their employees throughout the pandemic, along with providing them health insurance.
Bunde said they will not add a COVID surcharge in the future.
Surcharge or not, James said consumers will likely start paying more at businesses like restaurants.
“I think that they are almost going to have to,” James said. “You can not be a restaurant operating at half capacity or one third capacity and keep your prices the same.”