Sneaky Surcharges Infiltrate Restaurants

By: James Flippin · July 19, 2023 · Reading Time: 3 minutes

Hidden Fees

By this point, most diners have gotten accustomed to restaurants being more aggressive when asking for tips, a phenomenon often called tipflation. But now, in addition to being asked to tip more, diners are also starting to see an unexpected surge in another charge: surcharges.

After enjoying a nice meal out, diners today are more likely to find a fee (or two) for things unrelated to their physical meal. A few of the most common surcharges are fees for credit card use, employee healthcare costs, or attributed to inflation.

These surcharges typically range between 3% to 5%. According to the National Restaurant Association, they’re probably here to stay.

Surcharging for Survival

So far this year, roughly 15% of restaurant owners have added fees to customer bills. Restaurants are reportedly doing so in an attempt to keep up with the rising costs of food, labor, and rent, all of which remain significantly higher now than pre-pandemic levels.

When compared to other types of businesses, restaurants are particularly sensitive to price increases. Restaurants operate with razor-thin profit margins, usually around 5% of sales. When costs rise, many restaurants feel pressured to pass the cost on to customers.

Revolt at the Table

While diners may be sympathetic toward restaurants’ precarious position, that doesn’t mean they want to foot the costs themselves. In fact, many diners have voiced frustration with the added fees over social media, calling the additional fees a “hidden tax.”

One of the main sources of frustration is that surcharges are often unexpected, forcing customers to pay higher prices than they’d planned when ordering. Notably, the federal government is conducting an ongoing crackdown against similar surprise fees across multiple industries, from airlines to concert venues.

Will restaurant surcharges be next on the legislative chopping block? Don’t count your chickens before they hatch. But it might be wise to count on an extra 5% charge next time you pay for your meal by card instead of cash.

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