AB 466 will punish stores for helping customers save money

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OPINION – California family budgets are stretched thin by record-high cost of living. Survey after survey confirms cost of living and affordability are the top concerns for California voters. In fact, the 2024 election was, at its core, a referendum on kitchen table issues.

Lawmakers must heed the message being delivered loud and clear by California voters and reject Assembly Bill 446 (Ward) – misguided legislation that would eliminate the discounts and loyalty reward programs that millions of California consumers rely on each year to save thousands of dollars and make ends meet. From neighborhood grocers to restaurants, hotels to airlines, hardware stores, gyms and gas stations, businesses of every size use loyalty programs and discounts to serve their valued customers and save them money. These programs aren’t perks—they’re lifelines.

But AB 446 strikes at the heart of these savings. The bill blocks businesses from using customer data to reduce prices and offer rewards.  While that sounds fine out of context, the problem is that discounts often rely on information about customers. For example: a loyalty rewards program relies on a critical piece of consumer information: that you actually belong to the loyalty program.  Or a discount offered to veterans relies on the data that you are actually a veteran. Without this piece of data, there is no discount.  But AB 446 would forbid setting a lower price based on any consumer information.

Though many businesses would likely prefer to keep offering these discounts in order to better compete for business, AB 446 is enforced via steep penalties —$12,500 per violation.  With penalties like this, retailers across California are going to have to decide whether offering a discount on a $5 bag of fruits is worth the risk of a $12,5000 fine.  If AB 446 passes, every business in California – large and small – will be doing that math.  And I think we can all tell what conclusion they’re going to draw: offering targeted discounts in California is just too risky.

That outcome would hurt everyone. Families lose access to savings on their weekly necessities. A parent using grocery points to shave $30 off their weekly bill, or a commuter using gas rewards to fill the tank for less, would suddenly see those savings vanish. Local businesses would lose the ability to offer targeted discounts to build customer loyalty and compete with larger competitors. And California’s affordability crisis—already forcing too many people to choose between essentials—only deepens.

There is a better path. Opponents have offered reasonable amendments to ensure consumer data cannot be misused to increase prices, satisfying the stated intent of the bill, while protecting the discounts and reward programs customers love. Another pricing-focused bill in the legislature, AB 295 by Senator Wahab, has already taken this path and exempted discounts in recognition of their importance to California consumers. So far, AB 446’s proponents refuse to do so – and continue to put these discounts at risk in California.

California families cannot afford another hit to their pocketbooks, and local businesses should not be punished with steep fines for helping customers save. Lawmakers should listen to voters, support affordability and reject AB 446.

Rachel Michelin is the President of the California Retailer’s Association.