Panda Express to Pay $1.4 Million in Class Action Settlement | Entrepreneur

Panda Express Will Pay 'Hundreds of Thousands' of Customers in Class Action Lawsuit Over This Common Sneaky Practice — See If You're Owed, Too The U.S. restaurant chain allegedly used a tactic that's proliferating in the restaurant industry and beyond.

Key Takeaways

• The lawsuit claims Panda Express falsely advertised low delivery fees before tacking on a 10% "service charge."
• Customers who ordered delivery on the chain's website or app and paid the fee may be entitled to compensation.

If you've eaten at Panda Express recently, you may be entitled to compensation.

The American fast food chain agreed to settle a class action lawsuit that alleged "hundreds of thousands" of customers paid covert delivery fees with "false and misleading" disclosures, USA Today reported.

Related: Meet the Billionaire Couple Behind Panda Express, Who Built a $3 Billion Fortune

According to the lawsuit, the company obscured the cost of delivery by displaying lower prices, typically for $2.95, before hitting delivery customers with a 10% "service charge."

Restaurants often add service fees to supplement servers' tips — and they've proliferated across the industry amid higher costs of living and inflation.

"You're seeing service charges a lot very recently," Sean Jung, an assistant professor who studies hospitality analytics at Boston University, told Recode. "It means that basically everyone in the restaurant industry is having a very hard time."

Customers who placed a delivery order through Panda Express's website or app between July 17, 2020, and February 16, 2022, with a service fee charge may be entitled to payment; Panda Express will pay $1.4 million to settle, though it didn't admit to wrongdoing, per USA Today.

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The court will determine whether it will approve the settlement on November 8. Customers who paid the service fee should submit a claim online before January 24, 2024, to receive either a cash payment or two free medium entrée vouchers that can be used on the chain's website or app. Each claim is expected to exceed $10, according to the settlement administrator's website.