As businesses reopen, some add a COVID-19 surcharge
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Scott Sanders owns Tobacco Barn Distillery in southern Maryland. About 50% of his revenue used to come from tastings, where people would also buy his bourbon. He’s planning to reopen soon, but he has to take new precautions.
“We’re gonna have to get some outdoor tents, you know, like a wedding tent type of thing. And then you have to clean after all your guests,” he said. “All the tasting cups have to be … you know, you can’t reuse those cups, so they have to be disposable.”
For now, Sanders said, he’s going to absorb the cost of all that, even though his business has dropped off, down about 90% from what it once was. For his customers to come back, he said, they need to feel safe, without an extra charge.
But some businesses are charging customers for COVID-19-related costs. Some hair salons, restaurants, dentists’ offices are charging for protective gear, more disinfectant and those Plexiglas barriers at the cashier. Sometimes it’s in the form of a clearly stated COVID-19 surcharge, often between 3% and 5%, to cover the cost of things like masks and gloves.
Others have just quietly raised prices.
“Many customers feel caught off guard. The perception is very negative. And I will think this is much more of a public-relations issue than a financial one,” said Ted Rossman, an analyst with CreditCards.com.
Businesses should be transparent about COVID-19-related charges, said Lynne Kizis, a lawyer in New Jersey who specializes in consumer protection. “Certainly a business is generally going to be free to raise their prices to reflect whatever increase in overhead they may have. I mean, that may be rent, insurance, labor costs, material costs.”
What companies can’t do, she said, is advertise one amount for a product or service, but then charge more.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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