In California, a restaurant or bar may add a mandatory service charge or fee to food and drink, but the fee must be shown clearly and conspicuously, with an explanation of its purpose, on any menu, menu board, advertisement or other display that shows the item's price. That covers a digital menu board the same way it covers a printed one. The rule is California Civil Code section 1770(a)(29), as changed by SB 478 and SB 1524.
This is a summary, not legal advice. Check with your counsel about your own menus and fees.
Can a California restaurant still add a service charge?
Yes. A restaurant, bar or food concession may keep a mandatory service charge separate from its item prices, as long as the charge and its purpose are shown clearly wherever prices are shown. What it may not do is surprise the customer with the fee on the bill. Tips are different: the Attorney General's hidden fees page says the law does not affect tips or gratuities, since they are not mandatory.
What does California's hidden fees law say?
SB 478 (Chapter 400, Statutes of 2023) added a paragraph to the Consumers Legal Remedies Act. It makes it an unfair or deceptive practice to advertise, display or offer a price that does not include all mandatory fees or charges. Government taxes and fees, and reasonable shipping costs, are the only charges that can be left out. The paragraph took effect on July 1, 2024.
The current text is Civil Code section 1770, subdivision (a), paragraph (29).
What did SB 1524 change for restaurants?
SB 1524 (Chapter 43, Statutes of 2024) added a restaurant rule to that paragraph. Mandatory fees on individual food or beverage items do not have to be built into each price when they are sold directly to a customer by:
- a restaurant, bar or food concession;
- a grocery store or grocery delivery service;
- banquet or catering services, by a menu or contract that fully discloses the terms.
That exception comes with a condition. In the words of the statute, the fee "shall be clearly and conspicuously displayed, with an explanation of its purpose, on any advertisement, menu, or other display that contains the price of the food or beverage item."
The exception does not cover third-party food delivery platforms, as defined in Health and Safety Code section 113930.5, or any other food delivery platform.
What must a menu board show about a service charge?
Read against the statute, a menu board that shows prices and a restaurant that adds a mandatory fee has three things to get right:
- The fee itself. State that a mandatory fee or service charge is added, and how much it is (a percentage or an amount).
- Its purpose. Say what the fee is for. The statute asks for "an explanation of its purpose".
- Where prices are. Put it on every menu and display that shows prices, not only at the register or on the receipt. The California Attorney General's hidden fees page puts it as "wherever prices are shown".
The statute does not set a type size or a position on the board. "Clearly and conspicuously" is the test, so a line the customer can read from where they order is the safe reading. A note in small grey type at the edge of the screen is the kind of display that invites questions.
Does it apply to digital menu boards?
Yes. The statute says "any advertisement, menu, or other display that contains the price". A TV behind the counter showing prices is such a display, and so is a drive-through board, a window screen with prices, and an online menu.
If one screen shows prices and another shows only photos, the fee notice belongs on the one with prices. If your prices rotate across several pages, the notice should stay on every page, not on one page of the rotation.
How do you show a service charge on a digital menu board?
The same approach works in most signage software:
- Keep the notice fixed, not rotating. Put it in a part of the layout that does not change when pages or specials rotate.
- Use the same size as your items. A notice at the same size as the item names is hard to call hidden.
- Write it in one line. For example: "A 4% service charge is added to every bill. It pays for kitchen staff wages." Use your own figure and your own purpose.
- Change it in one place. If the fee changes, every screen should update from one setting, so no screen shows an old rate.
New to screen menus? See how to display a menu on a TV.
How does Brix show a service charge on a menu board?
The Brix Menu Board app has a setting called Note at the bottom. Type one line, and it shows at the bottom of every page of the board, in the same size as the menu items. It stays on screen when the pages rotate. The same footer holds the two calorie statements when the board uses the US chain (FDA) calorie setting; see calorie labeling on digital menu boards.
The board reads items and prices from a Google Sheet, a CSV or JSON file, or an API, so a price change reaches every screen from one place. See digital signage for restaurants.
Brix is based in Los Angeles, and we can help Los Angeles restaurants set up their first screens in person. It costs $6 per screen per month billed annually, or $8 billed monthly. Start a free 7-day trial, no card needed. For a chain rollout, talk to us.