Service Fees: How Patrons Really Feel About Them

Aug 16, 2023

The dining experience has evolved beyond savoring delicious dishes to encompass a growing concern among restaurant customers: the emergence of contentious service fees. As more eateries across the culinary landscape tack on additional charges, patrons are increasingly expressing frustration and confusion. These fees, intended to address issues of pay equity and rising business costs, are sparking debates about transparency, fairness, and the overall dining experience.

These charges often show up at the bottom of the receipt, separate from tips for the server or cooking staff. The National Restaurant Association estimates that around 15% of restaurants add these fees. Proposed solutions include requiring businesses to include taxes and fees in listed service prices, similar to European practices. The Federal Trade Commission is exploring regulations to address deceptive fees.


Keeping Score

Reddit users in Los Angeles and Chicago have compiled spreadsheets of restaurants with these fees, sparking discussions about their transparency and allocation. These additional charges, often ranging from 3% to 20%, bear labels such as “healthcare surcharge” or “wellness fee,” leaving patrons perplexed. The Reddit spreadsheet highlights service fees in LA that have gained traction, listing nearly 240 establishments and whether the fees supplement server tips.


Restaurants Vs. Employees

While some restaurateurs argue these fees ensure fair pay distribution between front-of-house and kitchen staff, restaurant employees contend that such charges often benefit owners more than employees. A class-action lawsuit against Jon & Vinny’s in Los Angeles claims that their 18% service charge doesn’t actually benefit servers. The confusion over these fees, often presented separately from tips, has led to a Reddit-driven effort to track and criticize restaurants imposing them.

restaurant fees

What’s Happening in DC?

DC’s dining scene has seen a surge in extra fees, causing customer confusion and frustration. The Office of the Attorney General issued guidance on fee transparency, including examples of compliant practices. These fees have increased due to Initiative 82, eliminating the “tip credit,” pushing restaurants to replace the $5.35/hr. minimum for tipped workers with at least $17/hr. To offset this, many added mandatory service fees, alongside other charges, ranging from 3% to 22%, with vague explanations.

Attorney General Brian Schwalb’s consumer alert in March stressed clear and prominent fee disclosure before orders. The “supplemental business advisory” requires specific fee descriptions, distinguishing whether they support base wages or are extra, like tips. Guidelines mandate prominent fee display on menus and prohibit burying fees in fine print or combining them with unrelated details. Violators may face warnings, refunds, penalties, or practice changes.

Examples of allowed fee disclosures are given, with compliance assessed case by case.