Putting together a lineup of live acts is an excellent way to attract and retain customers who want entertainment along with a good meal.
With that in mind, many bars and restaurants invite musicians and comedians, for example, to perform live at the venue. To cover the cost of hiring the artists, an extra fee is charged to customers, known as the entertainment cover charge.
But is that charge legal? And is the customer required to pay it? Find the answers to these questions in this article!
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What does couvert mean?
The word couvert comes from French and means “covered.” The term is used in different ways.
In Brazil, the restaurant couvert means an appetizer served before the meal. Abroad, it's an amount the establishment charges to cover the expenses of cutlery, glassware and other tableware.
And there is also the entertainment cover charge, a fee charged by commercial establishments — especially bars and restaurants — to pay for live acts.
What is the entertainment cover charge?
Many restaurants and bars offer live entertainment to boost traffic and keep customers ordering for longer. The practice brings several benefits for food businesses, among them:
- A bigger customer base: different concerts and performances draw different audiences. Building a varied lineup is a good strategy for catering to a range of tastes.
- A unique atmosphere: the acts can make the atmosphere more pleasant and reinforce the establishment's concept, increasing how long people stay and encouraging customers to order more.
- Standing out from the competition: a special lineup is a way to give your customers a distinctive experience and stand out.
- Extra revenue: the restaurant or bar can charge customers an extra amount and, in doing so, create a new revenue stream and increase revenue.
This “extra amount” charged to customers is the entertainment cover charge. Também chamado de taxa de couvert, ele serve para realizar o pagamento de músicos, comediantes e outros artistas que fazem live performances at the venue.
Common as it is, the fee still raises plenty of questions. Many customers are caught off guard when the bill arrives and question the extra charge. To learn more about it, keep reading!
Is a Cover Charge Mandatory? Here's What the Law Says
Customers are only required to pay the entertainment cover charge if they are told in advance. The establishment must make it clear, right at the entrance, how much will be charged for the act. As set out in item III of article 6 of the Consumer Protection Code (CDC):
Art. 6 The basic rights of the consumer are:
(…)
III – adequate and clear information about the various products and services, with a correct specification of quantity, characteristics, composition, quality, applicable taxes and price, as well as of the risks they present;
Otherwise, the charge is considered abusive and payment is not mandatory, as stated in item III of article 39 of the CDC:
Art. 39 Suppliers of products or services are prohibited, among other abusive practices, from:
(…)
III – sending or delivering any product to the consumer without a prior request, or providing any service;
(…)
Sole paragraph. Services rendered and products sent or delivered to the consumer under the circumstance set out in item III are treated as free samples, with no obligation to pay.
Also, a cover charge may only be applied when there are live performances, such as voice-and-guitar sets, bands and stand-up comedy, among others. In other words, you cannot charge for playing recorded music or showing sports matches.
Cover charge law
For now, there is no national law regulating cover charges in bars and restaurants. So what applies is what the CDC says.
However, some states and cities have their own laws setting out the rules for cover charges. In these cases, local legislation must be followed.
How to apply a cover charge in bars and restaurants
If you have a lineup of live acts and want to charge a fee for it, check out these tips to stay within the rules and avoid upsetting customers:
Amount charged
Unlike the service charge, which is calculated on the total bill, the cover is a fixed amount (for example: R$ 10) and works much like a ticket. In other words: it's charged per person.
Remember that the fee goes toward the artists' pay. So when calculating it, take the total cost of the performance and the average number of customers you usually get.
Advance notice to customers
As we've seen, you need to tell customers about the entertainment cover charge in advance. You can put up a sign at the entrance or post notices on the door stating the day's act, the time and the amount charged.
Also, if you promote it on social media or other channels, don't forget to include the amount that will be charged.
The cover charge and the 10%
Because it's a separate fee, the cover charge is not included in the calculation of the 10% service charge. That one is optional and must be calculated on the total bill only, excluding the cover charge.
Physical space
If your venue has different areas, don't apply the cover charge to customers seated where they can't enjoy the act. For example: if the live music is only on the second floor, it makes no sense to charge people on the first.
Bonus tips: how do you put together a special lineup?
Now that you know the rules for the entertainment cover charge, you can get ready to draw more customers to your bar or restaurant.
To help, we've gathered some tips for putting together a special lineup and we've also created a calendar of key dates for you to download for free. Enjoy!
Frequently Asked Questions
What is the entertainment cover charge?
How does the entertainment cover charge work?
Is it mandatory to pay the entertainment cover charge?
Can the customer refuse to pay the entertainment cover charge?
What does the law say about the entertainment cover charge?
So what applies is the Consumer Protection Code (CDC). The charge is only allowed when there is advance notice (per item III of article 6). Otherwise it is considered an abusive charge and payment is not mandatory (as set out in item III of article 39).
Some states and cities have their own laws setting out the rules for cover charges. In these cases, local legislation must be followed.
