When Can a Bar Charge a Patron Extra for Drinks? - Free Enterprise
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When Can a Bar Charge a Patron Extra for Drinks?

A San Francisco bar is being temporarily shut down for doing something seemingly harmless: charging extra for drinks.

But Dimples Cocktail Lounge isn't being shuttered for 45 days just for raising prices. The bar was charging a surcharge for the personal company of its female servers, reports San Francisco's KPIX-TV.

So when can bars charge a little something extra for their drinks?

'Companionship' Surcharge Is Illegal

The California Department of Alcoholic Beverage Control shut down Dimples after a three-month investigation that revealed servers "were placing a surcharge on drinks in return for keeping male patrons company," reports KPIX.

In California and many other states, it is a crime for business owners to give an employee a commission or percentage of sales for soliciting patrons to purchase alcoholic beverages. At heart, the laws are seeking to prevent the sort of escort or prostitution practices in bars that are as old as the Old West.

So charging $20 more for a "hot" Irish coffee probably isn't a good idea. Even if you work in a place where prostitution is legal (i.e., parts of Nevada), you should consult with a local attorney about your county's rules on "special" drink charges.

Some Legal Drink-Pricing Schemes

If you're a business owner who serves alcohol, you aren't restricted from offering creative drink specials. For example, bars and restaurants in the past have:

  • Charged more for members of Congress. During the government shutdown in October, some restaurants charged extra for federal legislators.
  • Changed different prices based on age. It may not be legal to refuse to serve a non-minor based on age, but it doesn't mean you can't give discounted prices to seniors.
  • Defended themselves against a "ladies night" court challenge. The courts have spoken: "Ladies nights" are legal. Cheaper drinks for one gender or the other are typically a safe bet.

If you don't want to end up like Dimples, just remember that you run your business in America, not Bangkok. Patrons generally can't pay extra for "company."

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