Don’t assume you control your restaurant bill

I’m tired of being tricked and manipulated when I dine.

I thought that I had seen it all when it comes to the many ways restaurants add fees and charges to our bills. I have written about this before, but based on a dining experience last night at a restaurant (which I won’t name), I became so upset that I have to update the new ways that we are being taken advantage of.

When the bill came, it had a note: “We include a 25% service charge on all dine-in checks. This allows us to offer benefits and is shared among all hourly employees. This service charge includes all gratuity and fees. If you feel your service was exemplary and would like to leave an additional tip, it is always appreciated but never expected.”

Two things: First, this was not made clear prior to ordering, and second — and the thing that bothers me the most — is that the 25% was based on the entire bill INCLUDING TAX! I’m now tipping the government? We asked the manager if the tip was based on the bill plus tax and the answer was yes. They would not change the 25% not to reflect tax.

I could live with a 20% service fee but that extra 5% for the guest to pay the employee benefits doesn’t sit well with me.

What a restaurant is supposed to inform you of

A service charge is a mandatory fee set by the restaurant and is not a voluntary tip. Essentially you, the diner, have entered into an agreement with the restaurant to pay this fee when you order your meal.

Everyone in the industry generally agrees that pricing transparency is essential to customer trust, loyalty and satisfaction. A restaurant should inform you of any fees by having signage at the host station and front entrance and when you make a reservation. It should be clearly printed on every menu, and the staff should give you verbal notice prior to seating or ordering.

But what if they don’t? There are federal and state consumer-protection laws that prohibit undisclosed fees — so-called “junk fees.” If a fee is added without it being properly disclosed, you can dispute it by speaking with management or signing the credit card slip “under protest.”

Other ‘fees’ you may see these days

Restaurants are struggling to stay in business. As a restaurant consultant, nobody knows that better than me. I visit upwards of 200 restaurants a year, and every staff member, manager and owner tells me of their fight for survival.

I understand when they raise menu prices, reduce menu choices to control inventory and even put in technology that can help them lower labor costs.

However, what I don’t like is when they try to trick the customer into paying additional fees that sound mandatory but are not. Here are some examples that have shown up on one check: 3% for “Employee Benefits Fee” and 3% for “Living Wage Fee” and 3% for “Wellness Fee.” Add to that the 3% credit card transaction fee, which more restaurants are charging, and you are up to an additional 12% before you add a tip.

Sometimes the service staff suffers

I recently visited a restaurant that not only adds some of these fees to the bill so the customer pays extra, but also has implemented a way to get money from their staff.

When you use a credit card at a restaurant, it either puts the 3% fee on your bill or they pay it as a cost of doing business. In a North Shore restaurant, which shall also remain nameless, they go a step further.

When you use a credit card to pay your bill and the tip, they charge the server 3% of the tip to pay for the guest using a card! I have not seen a restaurant do this in years. The server is not running an independent business where they should be responsible for paying the restaurant’s bills. This is restaurant greed run amok.

The future of the restaurant bill

Service charges are the future in how we pay our bills in restaurants. I support this for many reasons, but service charges must be disclosed clearly so guests understand them prior to ordering. I do not support made-up fees that essentially try to make patrons into partners who are responsible for paying what the restaurant should be paying on its own.

• Izzy Kharasch is the founder of Hospitality Works, a consulting firm that has worked with 700+ restaurants and small businesses nationwide. He is offering Daily Herald restaurant owners a free consultation by contacting him at Izzy@HospitalityWorks.com.