FRANKFORT, Ky. — Attorney General Daniel Cameron on Tuesday issued guidance to businesses on COVID-19 surcharges. Surcharges are fees added to the base price of a product or service in order to offset additional costs incurred by a business. During the COVID-19 pandemic, many Kentucky businesses have been required to make changes to their business operations.
These changes have included updated cleaning procedures, personal protective equipment (PPE) requirements, new staffing procedures, and reduced occupancy limits. Such changes have led to increased expenses, and a business may choose to pass these costs along to consumers in the form of surcharges.
Some businesses may choose to offset new COVID-19-related expenses by adding surcharges or fees to the final costs of goods or services. However, all surcharges must comply with consumer protection laws. Businesses instituting a COVID-19 surcharge or fee must adhere to the following guidelines:
- Surcharges must be clearly and conspicuously disclosed to a customer prior to the point of sale, including in advertising or marketing materials and during the ordering or purchase authorization process;
- Surcharges must reflect a “reasonable” expense incurred by the business;
- A business may not profit from a surcharge or fee;
- A surcharge must be itemized on a bill or receipt, and it cannot be labeled as “tax.”