Lawmakers want to crack down on “junk fees,” but restaurants are trying to stay out of the fight.
Surcharges or fees covering everything from credit card processing to gratuities to “inflation” have become more popular on restaurant checks in recent years.
Last year, 15% of restaurant owners added surcharges or fees to checks because of higher costs, according to the National Restaurant Association. In the second quarter, 3.7% of restaurant transactions processed by Square included a service fee, more than double the beginning of 2022, according to a recent report from the company.
Opponents of the practice say those fees and surcharges may surprise customers, hoodwinking them into paying more for their meals at a time when their wallets are already feeling thin. Fed-up diners compiled spreadsheets via Reddit of restaurants in Los Angeles, Chicago and D.C. charging hidden fees. Even the Onion took a swing at the practice, publishing a satirical story in May with the headline “Restaurant Check Includes 3% Surcharge To Provide Owner’s Sugar Baby With Birkin.”
The credit card fee is the only one I don’t mind. CC fees siphon a lot more money out of what we pay than people think. It’s unfair that restaurants/stores have to take that hit because the CC industry has been successful in making credit cards ubiquitous.
All those rewards we get as consumers for using CCs come straight from the vendors pockets, and the banks get a much larger cut of the fees than they “give” back via rewards.
There is no reason why credit card fees need to be so steep in the digital age. And most vendor agreements require that vendors aren’t allowed to charge a separate CC fee to cover the cost to them, so they instead have to raise prices on all (cash) customers through a menu price hike.
It’s the same kind of bullshit as Apple requiring that app owners are not allowed to sell their app on other platforms for less than their Apple Store price.
Yeah. I used to work at a retailer that had a credit card for the business. People think the incentive for the business is to get the $80 commission for signing up new people. And while that’s nice, the real reason for us was that processing fees were waived at our store for anyone using the card.
That’s why you’ll get get more “points” for using the card at the retailer than you do elsewhere. That 2-3% back or whatever is way less than the processing fee the business would otherwise be paying.
What is the purpose? They control the base price, so why break it out? I guess they are just trying to pass the buck symbolically and literally.
It’s bait and switch. You display prices to attract customers (think how restaurants display their menus out front or online) and then raid them with add-ons at bill time.
bait and switch
Aka fraud
Sometimes the fees are in small print somewhere on the menu. I suppose that gives the restaurant some legal protection, although I’m still totally on the “menu prices must actually show how much that food costs” team.
It’s only fraud when the plebs do it, to business owners it’s “strategy” /s
The weirdest one has been watching the “15%+ service fee” go from groups of 8 to 5 in only 2 years.
Also an easier way to alleviate junk fees would be to remove credit card transaction fees.
You know the thing that banks have been exploiting for decades to make profit out of virtually nothing.
It’s like paying for gamepass but for every time you open the game.
And don’t come in here saying that it covers PCI DSS requirement. This technology is cheaper to run than a rassberrypi mining dodgecoin.
Just make people pay the fee when they dine and you will see how many switch to other payment options
There are quite a few places around me that add a service fee for everyone. I don’t frequent those places. Which is sad because some of them actually have good food.
They should have started cracking down years ago when restaurants started charging “delivery fees” that the delivery drivers didn’t get.
I’ve started doing Google reviews of these “fee” places, giving an honest opinion of food/services received and adding a simple statement of any fees added to menu prices. At least it makes it a little more visible.
Am I the only one? The whole thing of charging 4% if someone’s paying by credit card, because that’s what it costs to run their credit card, makes perfect sense to me.
Maybe it is because I used to be involved with a business that paid credit card fees. What we eventually wound up doing was publishing prices that were nice round numbers that roughly included the CC fees, giving a discount below the published prices for cash payments, and including a separate 3% CC fee onto custom quotes that were itemized, if people were paying with a card. That seemed like a pretty solid system. But yeah I definitely get it if a restaurant wants to say that there’s a certain percent fee if you’re paying with a card.
“Cost of living adjustment” can fuck off though
Cash discount is the way to go. Price is the price but offering discounts is fine.
Cash has fees associated with it too when you have a business bank account. It’s probably not a as high but might be now that there is so much cashless.
?
What do you mean? Depositing $100 has always credited me $100. There are monthly fees and etc associated with the account sometimes, but they are irrespective of whether you’re depositing cash.
Usually what we would be trying to motivate people towards is ACH instead of credit card (very low fee but still everything automatic, not a pain in the ass like cash is). But idk of any cash fees associated with any business account I’ve ever been involved with.
Page 11 as an example: https://www.chase.com/content/dam/chase-ux/documents/personal/checking/biz-how-your-transaction-will-work.pdf
It’s pretty low comparatively but not usually free.
Cash deposited at ATMs: No charge.
I do see the 0.25% fee for teller cash deposits but (a) that’s nowhere near as high as CC fee and basically not worth worrying about (b) generally speaking I don’t do that unless I had some massive wad of cash, the ATM is far more convenient unless you have a big pile all at once
Keep in mind, these “service charges” are usually double to triple what the actual thing costs…
Restaurants are seconds away from charging a per-bite subscription to their menu. 30 bites per month individual plan or shared 150 bites per month family plan
- Any large bites count as 3 bites
- All bites where you open your mouth are categorized as large bites.
- Uneaten food is evaluated by our proprietary AI and given a remaining bite count (which is then doubled and subtracted from your regaining monthly bite total as a penalty).
Note that by “stay out of the fight” the article means “stay out of the Biden administration’s crosshairs” which actually means something different.
“Restaurant operators say the fees keep their menu prices lower, improve employee compensation and are better for customers.”
HA!!! *but we want it this way so people don’t realize how expensive their meal will actually be until they’ve already eaten and it’s too late. We want to hide our profit grab in innocuous fees that visually feel like non-negotiable taxes they are just used to paying without objection!!!"
All listed prices should be the final maximum cost for any specific product. “Additional fees may apply” should not be allowed, as they exist to deceive the user about the final cost.
Upcharges for additional things is fine, as long as the customer knows what the additional cost is.
Also, tipping needs to fuck off and all employees need to be paid a living wage. If businesses can’t pay a living wage they don’t need to exist.
abiutbthe fi al
You okay?
My thumbs must have had a seizure!
Yup, at this point it’s just false advertising. Per the article, restaurant owners are saying they want to keep menu prices low as to not scare off customers, which is really just a fancy way of saying they’d rather bait them on the promise of low prices, and then ram the full cost of the meal up their asses at the end of it.
Just roll everything (cost/taxes/tips/fees) into the menu price. This constant bait and switch in the US needs to finally die. If you won’t survive by showing the true costs your customers need to pay, maybe you need to rethink your business model or find a new profession.
The way I see it, if a restaurant can’t provide a living wage and also provide reasonably priced food, then the restaurant is being run poorly and the money is not being managed properly.
And/or the cost of materials is also extortionate. I’m sure Sysco and other restaurant supply companies have also jacked their rates in recent years.
The thing is, they most non chain restaurants could just buy locally and it’ll be cheaper. It just takes some elbow grease and effort which owners don’t wanna do for better quality stuff.
I know it’s possible cause every trendy area I’ve gone to eat at has restaurants advertising local produce from farmers market and they’re prices are always the same or cheaper than other trendy restaurants in the area.
That would require taking the time to actually go out and do the shopping, as opposed to filling out an order sheet and having it brought to their door. Don’t get me wrong, I’m with you, I just don’t see many of the chefs/restaurant owners I know having that kind of time. Margins are already razor thin in that industry as it is, thus why they’re all so crazy about labor costs, and they’re already wearing so many hats to not have to hire someone to do things because they’d end up in the red. It’s not a great business to be in as an independent unless you can manage stupid low rent. But this is also why the chains/corps can thrive the way they do, they have the buying power to actually squeeze out a profit.
Yea that’s also why the quality of a lot of those type of restaurants is mid.
How enforceable are these fees? Like if I sat down, ordered from the menu with whatever set prices they had in the menu, get back a bill with fees added on that I never agreed to, what would happen if I just refused to pay those fees? Like I’m not coming back either way, so don’t care if they ban me, but can a restaurant tack on whatever they want and the police would treat it as a non-payment of what’s due or is the legal obligation only for the food ordered plus reasonable expectations added on (such as taxes, though personally I also believe they should be included in the advertised price)?
If it is listed on the menu, you must pay it. I can see if it’s not mentioned that you could make the case it’s BS, though
Add a service fee or an inflation fee if you’d like. I’ll circle it and leave a big fat 0 for the tip. Without it, I’ll leave 20% minimum. Problem solved.
I’m sure your server will understand. They’re usually the ones in charge of decisions like these. /s
You mean the servers that are overwhelmingly opposed to minimum wage laws applying to servers?
The same ones that complain all day about their wage and make >$40/hour with no education or training while not reporting their cash tips to the IRS?
The same ones that just drop off your food, never come back and take 20 mins to process a tab?
lol.
You’ve clearly never worked as or known anyone working as a server holy shit lmfao
I hope they do understand, and quit. Workers need to stop working for shit employers.
The only employers that are hiring are shit. I’m very worried about the service industry.
Are you kidding? Everyone is struggling to find workers at that level. It’s also a great time to level up. Receptionists and various no experience needed office jobs are struggling to find people to hire too. It’s a workers economy right now, but it won’t stay that way long.
Everyone is trying to find workers for the piss-poor wages that are being offered. Add in tip pools and positions being tipped that have no business being tipped and it couldn’t be further from a worker’s economy.
Wages offerings are up significantly… https://restaurant.opentable.com/resources/minimum-wage-restaurants/
But you have to move to get them. And guess what, the good employees are more likely to be offering more money.
I am tired of prices going up AND tips going up. It already was a percentage of a total, and now it’s a higher percentage of a higher total?
I remember 10 percent tip. Was sort of annoyed at 15. At 20 percent with five times the bill it’s gotten way out of hand.
And now my area is trying to normalize 25 percent, with 30 being “good service”.
I am about to say fuck it and go back to 15. It’s either that or never eating out again.
I never advanced from a 10% tip…if I thought the service and establishment justified tipping at all. Otherwise 0% tip.
Tipping is strictly optional; and anyone pressuring you otherwise is an asshat who doesn’t need your business.
Unless your server has to tip out (which they all do) and so by choosing to hit that 0% your server now has to pay to serve you.
Golly, I guess we’ll just keep subsidizing the fucking restaurant owner instead of doing anything.
Your options are tip well, or don’t eat out. It absolutely sucks that owners are making customers subsidize their employees’ wages, but by receiving the service you are expected to pay for the service. Tipping culture does suck. But it helps no one to tip poorly.
It helps me and erodes tipping culture as a whole. I’m curious how you think we’ll ever get past tipping culture without one of the first steps being “stop tipping for everything”.
And I absolutely do pay for the service. I pay the listed price of what I’m purchasing. That should be all that’s “expected”. You have been brainwashed into thinking that somehow shouldn’t include the cost of service. Absolutely insane.
The owners do not give half a shit if you tip their workers or not. They get their tipout regardless.
You can actually help by tackling tipping culture on a city/province/state level. You’re not doing anything by stiffing your server besides saving yourself money and costing your server. If you don’t go out to restaurants then whether your tip or not is no one’s concern.
Otherwise you’re still rewarding tipping culture by patronising venues that pay their workers a sub-livable wage.
Businesses that do this do not get my visits usually. It’s usually pretty evident.
I’m not going to fund that; and they should be demanding that the system stop and be adjusted so that such cases do not in fact happen.
I have never left 15% and if I’m not happy with the service 10% or lower.
I’m tired of tips in general. Every job should pay a liveable wage. Fix the system. The more in the middle class, the more things we can have. Healthcare, education, housing, food, innovation,…etc. Fuck ripping people off so a few assholes can sleep with women just as shallow as them or rape ones that turn them down.
A “quick haircut” sort of place (kind of a barber, sort of , but super-high-volume and just one worker, the owner) that I’ve been using for a while now has a super-annoying dark-pattern in their payment flow. They book appointments, and take in-person payments using Square. After your cut, when you’re paying via their hand-held kiosk with a card, the screen shows you a bunch of huge “tip amount” buttons, and it’s implied that the customer has to choose one of them, while the provider looks on, in order to finish the transaction and leave (probably not true - they’ve already got your CC info by that point). Guess which button is highlighted/pre-selected and front-and-center! That’s right, 20%. If you want to select another tip, or no tip, you have to select another button while she watches you do so. The owner lists all prices on her square website, and it’s those prices you think you’ll be paying when you book an appointment online, but she still feels the need to be tipped. You KNOW that the provider/barber has configured Square to present that UI to the customer. Not quite the same as the restaurant fees scam, but it’s actually more manipulative though, in my view.
Bring exact change in cash and be on your merry way
Why were you down voted? I like the idea, and why do I need to tip a fuckin barber? He’s doing his job down to the letter and is being payed for it.
Avoiding awkward forced interactions like this is the primary reason I cut my own hair. Otherwise, would be fine contributing to that part of the economy.
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https://theonion.com/restaurant-check-includes-3-surcharge-to-provide-owner-1851474578/?utm_campaign=TheOnion&utm_content=1716484954&utm_medium=SocialMarketing&utm_source=twitter
https://www.cnbc.com/2024/08/24/restaurants-fight-ftc-junk-fee-crackdown-over-surcharges.htmlI’ve never been to a restaurant with fees and if I ever found one, I wouldn’t be going there. I rarely eat out anymore at all though. High prices for mediocre food and mediocre service keep me away.
THIS is why we need Government OUT OF OUR LIVES (except in the Bedroom and Doctors Office)! If these Regulations go away then OBVIOUSLY Prices will DROP!
