What California's New Delivery Refund Law (AB 578) Means for Your Restaurant

What does AB 578 actually require?

California’s AB 578 took effect January 1, 2026, and it’s aimed at the delivery platforms, not restaurants. Introduced by Assemblymember Rebecca Bauer-Kahan and signed into law as Chapter 341 of the 2025 statutes, it requires DoorDash, Uber Eats, Grubhub, Postmates, and any other third-party delivery app to issue a full refund, including taxes, delivery fees, commissions, and tips, whenever an order never shows up or the customer gets the wrong items entirely. Partial refunds are still allowed when only part of an order is wrong or missing. The platform can deny a refund if it can show the customer caused the problem or there’s evidence of fraud, but the default now is a full refund, not app credit.

The other piece matters just as much: customers can ask for that refund to go back to the actual card or account they paid with instead of app credit, and platforms have to provide a live human to handle the request if their chatbot or automated flow can’t.

Does AB 578 change who pays for the wrong order, the restaurant or the platform?

No, and this is the part that gets misread. AB 578 places every obligation in the bill on the delivery platform. It says nothing about how DoorDash or Uber Eats then allocates that cost between itself and the restaurant that prepared the order. That allocation already existed before this law, buried in the merchant agreement you signed when you joined the platform, and AB 578 doesn’t touch it.

How delivery refund costs already show up in your payout

If you’ve sold through a delivery app for more than a few weeks, you’ve probably noticed a line item in your weekly payout statement for an order issue or customer refund adjustment. Under most platform merchant agreements, refunds tied to kitchen-side problems, a wrong item, a missing item, food sent back cold, get deducted from the restaurant’s payout. Refunds tied to the courier or the platform itself, like a driver who never delivers the order, are typically absorbed by the platform instead. That split was already in place before AB 578 and the new law doesn’t rewrite it.

What AB 578 changes is the speed and form of the refund on the customer’s end: more refunds now go back to a card instead of sitting as app credit, and platforms have less room to drag out a decision before issuing one. That could mean platforms get a little stricter about which of those refunds they push onto your payout versus eat themselves, simply because they’re processing more of them, faster. Worth watching your payout statements a little more closely over the next few months, but it’s not a new liability the law created.

How is a platform refund different from a card-network chargeback?

These get confused constantly, and they work nothing alike.

A platform refund is something DoorDash or Uber Eats decides and processes on its own, through its own systems, usually within days. It costs the amount refunded and whatever gets allocated to your payout under your merchant agreement.

A card-network chargeback is a dispute your customer files with their bank, not with the delivery platform. It runs through Visa’s, Mastercard’s, or the relevant network’s own rules, can take weeks to resolve, and typically carries a separate chargeback fee on top of the disputed amount, often somewhere between $20 and $100 depending on your processor and the reason code. A chargeback can also happen even after a platform refund already went out, if the customer disputes with their bank anyway, which is its own headache entirely.

Quick reference

• Who decides: platform refund, the delivery app. Chargeback, the customer’s card issuer.
• Typical timeline: platform refund, days. Chargeback, weeks to months.
• Extra fee: platform refund, usually none beyond the refunded amount. Chargeback, often $20 to $100.
• Who it affects: platform refund, your payout per the merchant agreement. Chargeback, your processor relationship and dispute history.

What should a restaurant actually do about this?

Pull up your delivery platform’s merchant agreement and find the section on refunds and payout deductions, most owners have never actually read it. Know which refund categories get charged back to you versus absorbed by the platform. Keep an eye on your weekly payout statements for a pattern of order-issue deductions that seem to be creeping up since January, since that’s the real signal of whether AB 578 changed anything in practice for your location. And if you’re trying to reconcile delivery payouts against what’s hitting your merchant account from your own POS, that reconciliation gets a lot easier with the right setup (yanpayments.com/#cta).

This is general information about a California statute, not legal advice. If you’re disputing a specific payout deduction with a delivery platform, that’s a contract question worth running by an attorney.

Sources: Tasting Table, “New California Law Requires Food Delivery Apps To Refund Orders”; Chowhound, “This State Law Change Means You Could Get A Refund From Your Food Delivery App”; CalMatters Digital Democracy AB 578 bill tracker; FoodOnDemand, “New California Law Impacts 3PD Transparency, Refunds and Courier Protections.”