Panda Express Hit with Class Action Over Allegedly Hidden Service Charge on Delivery Orders

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action alleges Panda Express has imposed upon customers a hidden service charge on top of what it advertises already as a “low” delivery fee. 

The 17-page suit claims that although Panda Express has promised in its mobile app and website to charge customers only a $2.95 delivery fee, the American-Chinese fast food purveyor conceals an additional 10-percent “service charge.” Per the case, this added fee is charged exclusively to delivery customers, and not to those who order food and pick it up in-store. 

“Because this fee is exclusively charged to delivery customers, and not to customers who order in-store or who order online and pick up their food in store, the ‘service fee’ is by definition a delivery fee,” the lawsuit contends. “Panda Express obscures the true nature of the fee by naming it a ‘service fee.’” 

According to the suit, Panda Express, “[e]ven more insidiously,” hides the purported service fee in a line item called “Taxes and Fees,” which further obscures the nature of the charge from customers. The case alleges that by falsely marketing a quantified, low-cost delivery charge, Panda Express deceives customers into making online food purchases they otherwise would not make. 

“Specifically, Panda Express omits and conceals material facts about the Panda Express delivery service, never once informing consumers in any disclosure, at any time, that the so-called ‘service fee’ is assessed exclusively on delivery customers and is therefore by definition a delivery charge,” the lawsuit claims. “Hundreds of thousands of Panda Express customers like Plaintiff have been assessed hidden delivery charges they did not bargain for.” 

Panda Express has moved aggressively into the food delivery business since the onset of the COVID-19 pandemic, the case begins. In order to appeal to customers, Panda Express, the suit says, has prominently promised a flat delivery fee of $2.95, which is represented on the home screen of the company’s app and website and on the checkout screen prior to the finalization of an order, per the case. 

According to the lawsuit, the alleged additional service fee charged by Panda Express is hidden from customers behind a hyperlink: 

“On [the] ordering screen, and for the first time in the ordering process, Panda Express presents a line item called ‘Taxes and Fees.’ The ordering screen does not explain what ‘Taxes and Fees’ are comprised of. 

Only if a user clicks on ‘Taxes and Fees’ do two further line items appear: ‘Tax’ and ‘Service Fee.’ ‘Tax’ adds the locally applicable sales tax rate. ‘Service Fee’ adds a further charge of 10% of the total food cost. This ‘Service Fee’ is exclusively applied by Panda Express to delivery orders and is therefore by definition an additional hidden delivery charge.” 

The lawsuit looks to represent all consumers outside of California who, within the applicable statute of limitations preceding the filing of the case, ordered food delivery through the Panda Express mobile app or website and were assessed higher delivery charges than represented. 

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.