It’s your money, so check, please!
Just when I think I have seen it all when it comes to sneaky and underhanded ways that restaurants want to increase your check, I haven’t.
I love the hospitality industry, but it really upsets me that there are devious owners and managers who try to take advantage of their guests with additional fees. These operators are betting you won’t look at your check. They just want you to sign it and get on with your day.
Sometimes these fees bring additional dollars to the restaurant, and sometimes they provide more money to the server, bartender or kitchen. Let’s break it down.
What you should pay vs. what you must pay
For the purposes of this article, we’ll focus on full-service restaurants.
Tipping falls under the heading of what you should pay. Tipping is an option that the customer has and, of course, many of us base our tips on how we felt about the service. If you get great service, leave a great tip. In today’s world, 20% is standard, and a tip of 22% or more means you received exceptional service. Your choice.
A gratuity must be posted on the menu or where the public can see it and is typically written like this: “A gratuity of x% will be added to your bill for parties of 8 or more.” It is important to note that the gratuity goes to the server. If the restaurant has this printed on the menu, then this is a must-pay and not an option. If you did not receive the service you expected, bring it to the attention of the manager and ask to have it adjusted.
A service fee must also be posted on the menu or where the public can see it, and often this is at the host stand. If it is posted, then this is a must-pay as well. The difference with a service fee vs. a tip or gratuity is that the service fee is controlled by the restaurant, and the owners decide how much, if anything, goes to the staff.
What you don’t have to pay
One new fee I commonly see on checks is the “employee wellness fee,” which the restaurants tell you is for helping fund employee healthcare and wellness benefits. This is typically 3%.
Next you might see a “kitchen appreciation fee,” which may run 2%. This is so the restaurant can give the kitchen staff additional compensation. Then there is the “living wage fee,” which is supposed to offset higher employee wages and will cost you another 2%. My personal favorite is the new “administrative fee,” also 2%, intended to defray operating expenses.
How fees affect the server
Most guests dine out with the expectation of leaving a 20% tip/gratuity. If we review how much the restaurant may now be adding in fees, which is about 9%, and you add the 20% tip, you are tacking 29% onto your bill.
If the check is $200 and you leave the standard 20% tip, you will pay $240. If you add the tip and all of the fees, your $200 check becomes $258, or an additional $18.
Many guests still add 20% to their bill, which covers the 9% in fees but leaves the server a tip of only 11%. My recommendation to you the consumer is to ask the management to deduct these fees so that 100% of your tip will go to the server.
What restaurants should do
Restaurants should stop making up all sorts of fees that make the customer feel like they are being nickeled and dimed. While this may help the restaurant in the short term, it actually drives away returning guests.
If the restaurant owners feel so strongly about having the guest pay these optional fees, they should raise their prices 9% and let the servers make 100% of their tips.
• Izzy Kharasch is the founder of Hospitality Works, a consulting firm that has worked with more than 700 restaurants and small businesses nationwide. He is offering Daily Herald restaurant owners a free consultation by contacting him at Izzy@HospitalityWorks.com.