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Clubgoers would then find this cover charge added to their first drink order.

In Illinois, bars cannot impose a cover charge unless the fee goes towards the cost of off-setting entertainment costs such as a live band.

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Bars often offer student discounts because university or college students will have a different willingness to pay than an average consumer, due to their budget constraints.

Thus, the bar sets a lower price for entry for university and college students because students have elastic demand.

In some cases, popular bars and clubs have a substantial excess demand; patrons are lined up outside the club waiting to get in.

In this case, the club can gain additional revenue from customers by requiring an entrance charge.

Restaurants may make a charge to diners who book but fail to show up; this is occasionally called a cover charge.

According to Massachusetts law, subject to a penalty of up to , no cafe, restaurant, or bar can require payment of a minimum or cover charge unless a sign is conspicuously posted with at least one-inch-high letters, stating that a minimum charge or cover charge shall be charged and indicating the amount. This law was put in place to resolve the problem of “secret” cover charges, which are indicated only in tiny text on the menu.

In the US the cover charge later became an entry charge where both entertainment and food and drink are provided, and carries the expectation of entertainment.

In most countries where restaurant cover charges are made the practice is far from universal; many restaurants make no charge.

The term "cover charge" is used in other cases, and can be confusing.

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