Restaurants' sneaky fees -- a guide

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I haven’t studied the fees controversy in depth but it always seemed to me that restaurants were using it as the scapegoat for raising prices by adding fees. The tipped wage increase should have just been added to the cost of doing business but owners would rather add fees in random ways that result in more revenue under the guise of “but you voted for this!”

When you ask people in the restaurant industry about this, they'll say they can't just raise prices to cover the costs because then people won't come to eat/drink there because it will be too expensive. This is pretty explicitly an admission that the fees are *intentionally* misleading, to bring people in with artificially low prices and then hit them with extra fees on the backend when they can't do anything about it. But people in the restaurant industry in DC think this is a persuasive argument.

And the whole thing obscures the larger issue, which is that if you can't figure out how to offer your product/service at a price people are willing to pay, then your business model is fundamentally bankrupt. Now this isn't entirely the fault of bars and restaurants -- as is the case with many cost issues in DC, a lot of the blame lies with landlords who overcharge on rent because they are inadequately disincentivized to leave storefronts empty (they can use them to declare a business loss and write down taxes, and DC doesn't not sufficiently penalize landlords who don't make real efforts to find tenants for commercial spaces). But it's still annoying when we have so many restaurants and bars charging these fees specifically to trick customers into dining there, thinking it costs less than it does, but then complain that this is the only possible way for them to stay afloat as a business. Then your business is bad! No one made you open a restaurant.

No one made you eat at restaurants either. The vast majority of people whining here about fees and tipping can easily afford both but yet they have nothing better to do than act like they are being bled dry by such costs. It's pathetic.

Yeah, I can afford it, but taking my family out to dinner where it used to be $100 is now pushing $175, and at some point that meal is just not worth it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

"According to Federal Reserve data, full-service restaurant employment in Washington grew roughly 17% in the year before the tipping changes took effect. Since Initiative 82 came into force in May 2023, employment has fallen 4%.

This is just the start: The tipped wage will continue to rise for the next three years, when it meets the regular minimum wage that is increased every year for inflation. An April survey published by the Employment Policies Institute of more than 100 local restaurants in D.C. found that most planned to lay off workers. Half planned to expand into lower-cost states such as Maryland or Virginia, and nearly 1 in 3 planned to close locations.

To offset costs, hundreds of restaurants have opted to add fees or other surcharges to customer checks. Diners are responding the way you’d expect: A National Restaurant Association poll of nearly 1,000 D.C.-area adults found more than half are dining out less because of higher prices. Some said they’re choosing to patronize restaurants in Maryland or Virginia instead."

https://www.wsj.com/articles/why-no-one-goes-out-to-eat-in-d-c-anymore-fd01e31e

And the possibility go getting car jacked doesn't help. Virginia restaurants for the win.

Actually, Maryland for the win. 6% restaurant tax in MD, versus 10% in VA and DC.

Unfortunately, Maryland is severely lacking in good restaurants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

"According to Federal Reserve data, full-service restaurant employment in Washington grew roughly 17% in the year before the tipping changes took effect. Since Initiative 82 came into force in May 2023, employment has fallen 4%.

This is just the start: The tipped wage will continue to rise for the next three years, when it meets the regular minimum wage that is increased every year for inflation. An April survey published by the Employment Policies Institute of more than 100 local restaurants in D.C. found that most planned to lay off workers. Half planned to expand into lower-cost states such as Maryland or Virginia, and nearly 1 in 3 planned to close locations.

To offset costs, hundreds of restaurants have opted to add fees or other surcharges to customer checks. Diners are responding the way you’d expect: A National Restaurant Association poll of nearly 1,000 D.C.-area adults found more than half are dining out less because of higher prices. Some said they’re choosing to patronize restaurants in Maryland or Virginia instead."

https://www.wsj.com/articles/why-no-one-goes-out-to-eat-in-d-c-anymore-fd01e31e

And the possibility go getting car jacked doesn't help. Virginia restaurants for the win.

Actually, Maryland for the win. 6% restaurant tax in MD, versus 10% in VA and DC.

Unfortunately, Maryland is severely lacking in good restaurants.

I'll agree with you that if you go to downtown Bethesda, the choices are fine but not anything great. You really have to go elsewhere where rents are lower, like Silver Spring and Rockville. Not too different from Virginia -- it's total mediocrity in places like Arlington but better as you head further out.

[Anonymous]

Servers might make more tips in an expensive restaurant at dinner time.
But paying minimum wage makes it worth it to go to work even when it’s pouring outside or freezing, when people want to go out and the restaurant isn’t busy.
We went to an Italian restaurant in Dec on ca action and they charged us a 5% procurement fee. When we asked they said it was for using a credit card. No sign up on the hostess stand or on the menu or anything. It’s not right. I’d rather pay for gif my meal and be oblivious than pay a fee like that. Makes me not recommend the restaurant.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I haven’t studied the fees controversy in depth but it always seemed to me that restaurants were using it as the scapegoat for raising prices by adding fees. The tipped wage increase should have just been added to the cost of doing business but owners would rather add fees in random ways that result in more revenue under the guise of “but you voted for this!”

When you ask people in the restaurant industry about this, they'll say they can't just raise prices to cover the costs because then people won't come to eat/drink there because it will be too expensive. This is pretty explicitly an admission that the fees are *intentionally* misleading, to bring people in with artificially low prices and then hit them with extra fees on the backend when they can't do anything about it. But people in the restaurant industry in DC think this is a persuasive argument.

And the whole thing obscures the larger issue, which is that if you can't figure out how to offer your product/service at a price people are willing to pay, then your business model is fundamentally bankrupt. Now this isn't entirely the fault of bars and restaurants -- as is the case with many cost issues in DC, a lot of the blame lies with landlords who overcharge on rent because they are inadequately disincentivized to leave storefronts empty (they can use them to declare a business loss and write down taxes, and DC doesn't not sufficiently penalize landlords who don't make real efforts to find tenants for commercial spaces). But it's still annoying when we have so many restaurants and bars charging these fees specifically to trick customers into dining there, thinking it costs less than it does, but then complain that this is the only possible way for them to stay afloat as a business. Then your business is bad! No one made you open a restaurant.

No one made you eat at restaurants either. The vast majority of people whining here about fees and tipping can easily afford both but yet they have nothing better to do than act like they are being bled dry by such costs. It's pathetic.

Yeah, I can afford it, but taking my family out to dinner where it used to be $100 is now pushing $175, and at some point that meal is just not worth it.

That's fine, that's the way it should work. Let the restaurants deal with fewer customers if that is the result of the fees and the tipping. If I want a filet and a baked potato I eat them at home at a fraction of the price. I wouldn't go out to expensive restaurants and then cry about the bill if I was someone with plenty of money. I don't have plenty of money, I live on a budget, so I go out to eat based on my ability to afford. But I don't blame the restaurants for that, they don't owe me anything.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I haven’t studied the fees controversy in depth but it always seemed to me that restaurants were using it as the scapegoat for raising prices by adding fees. The tipped wage increase should have just been added to the cost of doing business but owners would rather add fees in random ways that result in more revenue under the guise of “but you voted for this!”

When you ask people in the restaurant industry about this, they'll say they can't just raise prices to cover the costs because then people won't come to eat/drink there because it will be too expensive. This is pretty explicitly an admission that the fees are *intentionally* misleading, to bring people in with artificially low prices and then hit them with extra fees on the backend when they can't do anything about it. But people in the restaurant industry in DC think this is a persuasive argument.

And the whole thing obscures the larger issue, which is that if you can't figure out how to offer your product/service at a price people are willing to pay, then your business model is fundamentally bankrupt. Now this isn't entirely the fault of bars and restaurants -- as is the case with many cost issues in DC, a lot of the blame lies with landlords who overcharge on rent because they are inadequately disincentivized to leave storefronts empty (they can use them to declare a business loss and write down taxes, and DC doesn't not sufficiently penalize landlords who don't make real efforts to find tenants for commercial spaces). But it's still annoying when we have so many restaurants and bars charging these fees specifically to trick customers into dining there, thinking it costs less than it does, but then complain that this is the only possible way for them to stay afloat as a business. Then your business is bad! No one made you open a restaurant.

Many of these places were doing OK until the DSA guilt-tripped DC residents to supporting this ridiculous new bill. The bar and restaurant model, while odd, was working very well for a long time. I paid my way though college working primarily for tips at an upstate NY bar. We did serve wings so that helped. But my point is that very few servers wanted this bill and no owners wanted it. But communists are going to be communists and can't help themselves when it comes to things like this.

A few things:

1) No one was tricked into voting for getting rid of the tipped wage. DC voters went to the polls TWICE to make this decision in elections where it was widely discussed. They had to do it a second time because the restaurant lobby got the council to overturn it the first time.

2) People voted for it because most people in DC are consumers. They want transparent pricing at restaurants. This was the #1 reason people voted for the bill -- because they want to know in advance how much their meal will cost, including service. Secondarily, they want to know the employees at the restaurant are being paid a fair wage because they don't want to patronize business that exploit workers. But it's mostly a selfish desire for transparent pricing.

3) Restaurants in DC made the second bill more likely to pass by engaging in the proliferation of fees during and after Covid. At first people were okay with pandemic fees that restaurants charged to help furloughed workers, pay for upgrades to facilitate outdoor dining and contactless pickup, etc. But after the vaccine, things started returning to normal and not only did the fees stick around, there were more of them. Adding service fees, or fees to pay for employee healthcare, or inflation fees. Even where these fees made logical sense, they made pricing less transparent.

4) The fees also created confusion around tipping. Lots of people were unsure how much to tip or whether to tip at all, because there was no consistency in the industry as to what the "service charge" was for or where it went. People didn't want to stiff servers, but they also didn't want to pay both a 20% service charge AND a gratuity, especially when doing so made dining out cost considerably more than they expected.

5) Restaurants in DC had an opportunity to come together between the two different ballot initiatives on the tipped wage, and settle on an industry standard with regards to tipping, service fees, and employee compensation. Not necessarily to do all the same thing, but to create transparency so people would know what it meant when they got a "Service fee" and what it covered or didn't cover, and therefor know when and how much to tip. They didn't. So consumers responded by voting for the initiative. It had nothing to do with communism or the DSA.

6) And now restaurants continue to refuse to give consumers what they want, which is transparent menu pricing, and are sticking with these fees and blaming customers for their own business failures. And, big surprise, the result is a decline in demand at restaurants and more people just saying screw it, I'll cook at home or get takeout from a fast casual restaurant where I know how much it costs, and be done with it.

It's crazy to me that industry workers and owners still cling to this idea that voters were hoodwinked. NO. Consumers want you to be clear about how much you service costs and what it covers, and you consistently refuse to do this. This is your OWN FAULT.

Are you one of the DSA members who wrote the bill?

[Anonymous]

Anonymous wrote:Waiters don’t want this! They make more with tips.

It depends.

I’m sure waiters at Michelin star restaurants don’t want it, because 15-20% of large bills adds up quickly.

On the other hand, I worked at a regional chain similar to Denny’s one summer. The meals were moderately priced, the families were probably on a budget and generally weren’t big tippers, and some people came to just have coffee - giving free refills to a single cup of coffee isn’t going to mean big tips.

Even though it was the hardest job I’ve ever had, there were weeks where my tips didn’t bring my salary up to minimum. While I realize that the restaurant should have made up the difference, I was told when I was hired that they expected a good waitress should be able to make enough tips to reach minimum and that if I didn’t they would view it as an indication that my service was deficient and they wouldn’t want to keep a bad waitress on staff.

I would have wanted this.

[Anonymous]

Anonymous wrote:Waiters are surely making less now, if only because now it’s a lot harder to avoid paying taxes

I don’t have a problem with this, and the industry opposition to this is really all about owners not wanting to pay payroll taxes and workers not wanting to pay income taxes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Waiters are surely making less now, if only because now it’s a lot harder to avoid paying taxes

I don’t have a problem with this, and the industry opposition to this is really all about owners not wanting to pay payroll taxes and workers not wanting to pay income taxes.

industry opposition was about owners not wanting to see huge numbers of people stop going to restaurants because it's too expensive, and that's what has happened.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Waiters are surely making less now, if only because now it’s a lot harder to avoid paying taxes

I don’t have a problem with this, and the industry opposition to this is really all about owners not wanting to pay payroll taxes and workers not wanting to pay income taxes.

industry opposition was about owners not wanting to see huge numbers of people stop going to restaurants because it's too expensive, and that's what has happened.

But shouldn't it be the same net cost? Instead we got double dipping.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Waiters are surely making less now, if only because now it’s a lot harder to avoid paying taxes

I don’t have a problem with this, and the industry opposition to this is really all about owners not wanting to pay payroll taxes and workers not wanting to pay income taxes.

industry opposition was about owners not wanting to see huge numbers of people stop going to restaurants because it's too expensive, and that's what has happened.

But shouldn't it be the same net cost? Instead we got double dipping.

A National Restaurant Association poll of nearly 1,000 D.C.-area adults found more than half are dining out less because of higher prices. Some said they’re choosing to patronize restaurants in Maryland or Virginia instead."

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I haven’t studied the fees controversy in depth but it always seemed to me that restaurants were using it as the scapegoat for raising prices by adding fees. The tipped wage increase should have just been added to the cost of doing business but owners would rather add fees in random ways that result in more revenue under the guise of “but you voted for this!”

When you ask people in the restaurant industry about this, they'll say they can't just raise prices to cover the costs because then people won't come to eat/drink there because it will be too expensive. This is pretty explicitly an admission that the fees are *intentionally* misleading, to bring people in with artificially low prices and then hit them with extra fees on the backend when they can't do anything about it. But people in the restaurant industry in DC think this is a persuasive argument.

And the whole thing obscures the larger issue, which is that if you can't figure out how to offer your product/service at a price people are willing to pay, then your business model is fundamentally bankrupt. Now this isn't entirely the fault of bars and restaurants -- as is the case with many cost issues in DC, a lot of the blame lies with landlords who overcharge on rent because they are inadequately disincentivized to leave storefronts empty (they can use them to declare a business loss and write down taxes, and DC doesn't not sufficiently penalize landlords who don't make real efforts to find tenants for commercial spaces). But it's still annoying when we have so many restaurants and bars charging these fees specifically to trick customers into dining there, thinking it costs less than it does, but then complain that this is the only possible way for them to stay afloat as a business. Then your business is bad! No one made you open a restaurant.

Many of these places were doing OK until the DSA guilt-tripped DC residents to supporting this ridiculous new bill. The bar and restaurant model, while odd, was working very well for a long time. I paid my way though college working primarily for tips at an upstate NY bar. We did serve wings so that helped. But my point is that very few servers wanted this bill and no owners wanted it. But communists are going to be communists and can't help themselves when it comes to things like this.

A few things:

1) No one was tricked into voting for getting rid of the tipped wage. DC voters went to the polls TWICE to make this decision in elections where it was widely discussed. They had to do it a second time because the restaurant lobby got the council to overturn it the first time.

2) People voted for it because most people in DC are consumers. They want transparent pricing at restaurants. This was the #1 reason people voted for the bill -- because they want to know in advance how much their meal will cost, including service. Secondarily, they want to know the employees at the restaurant are being paid a fair wage because they don't want to patronize business that exploit workers. But it's mostly a selfish desire for transparent pricing.

3) Restaurants in DC made the second bill more likely to pass by engaging in the proliferation of fees during and after Covid. At first people were okay with pandemic fees that restaurants charged to help furloughed workers, pay for upgrades to facilitate outdoor dining and contactless pickup, etc. But after the vaccine, things started returning to normal and not only did the fees stick around, there were more of them. Adding service fees, or fees to pay for employee healthcare, or inflation fees. Even where these fees made logical sense, they made pricing less transparent.

4) The fees also created confusion around tipping. Lots of people were unsure how much to tip or whether to tip at all, because there was no consistency in the industry as to what the "service charge" was for or where it went. People didn't want to stiff servers, but they also didn't want to pay both a 20% service charge AND a gratuity, especially when doing so made dining out cost considerably more than they expected.

5) Restaurants in DC had an opportunity to come together between the two different ballot initiatives on the tipped wage, and settle on an industry standard with regards to tipping, service fees, and employee compensation. Not necessarily to do all the same thing, but to create transparency so people would know what it meant when they got a "Service fee" and what it covered or didn't cover, and therefor know when and how much to tip. They didn't. So consumers responded by voting for the initiative. It had nothing to do with communism or the DSA.

6) And now restaurants continue to refuse to give consumers what they want, which is transparent menu pricing, and are sticking with these fees and blaming customers for their own business failures. And, big surprise, the result is a decline in demand at restaurants and more people just saying screw it, I'll cook at home or get takeout from a fast casual restaurant where I know how much it costs, and be done with it.

It's crazy to me that industry workers and owners still cling to this idea that voters were hoodwinked. NO. Consumers want you to be clear about how much you service costs and what it covers, and you consistently refuse to do this. This is your OWN FAULT.

You get the award for the most Orwellian comment on DCUM.

Pricing at restaurants is completely untransparent now. No one knows which restaurants have these crazy fees and how much they are until they get the bill.

That’s why so many of us have said F this and stopped going to restaurants.

Restaurant pricing is "untransparent" (read: opaque) because restaurants want it to be. All they have to do is roll these fees into their menu pricing and then it would be transparent. It not the elimination of a tipped wage that causes this, it's the desire of restaurants to try and trick customers into dining there by keeping menu prices artificially low and then tacking on fees on the back end.

However, tipping in general does exacerbate this problem because if you could eliminate tipping as a practice, then at least you could just have a conversation about whether a service charge makes sense or is deceptive. But with tipping, it's maximally confusing. Does the service charge take the place of a tip, or is it separate? Are you supposed to tip on top of the charge? If you don't tip on top of the charge, how will that impact your server? Tipping as a practice makes the practice of tacking on fees more confusing from the consumer's perspective.

I don't think you know what "Orwellian" means. Most of this is a question of market behavior, not government regulation.

[Anonymous]

When I see added fees for worker compensation and benefits and knowing the DC tipped wage law, I tend now to tip less in fee-based restaurants.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I haven’t studied the fees controversy in depth but it always seemed to me that restaurants were using it as the scapegoat for raising prices by adding fees. The tipped wage increase should have just been added to the cost of doing business but owners would rather add fees in random ways that result in more revenue under the guise of “but you voted for this!”

When you ask people in the restaurant industry about this, they'll say they can't just raise prices to cover the costs because then people won't come to eat/drink there because it will be too expensive. This is pretty explicitly an admission that the fees are *intentionally* misleading, to bring people in with artificially low prices and then hit them with extra fees on the backend when they can't do anything about it. But people in the restaurant industry in DC think this is a persuasive argument.

And the whole thing obscures the larger issue, which is that if you can't figure out how to offer your product/service at a price people are willing to pay, then your business model is fundamentally bankrupt. Now this isn't entirely the fault of bars and restaurants -- as is the case with many cost issues in DC, a lot of the blame lies with landlords who overcharge on rent because they are inadequately disincentivized to leave storefronts empty (they can use them to declare a business loss and write down taxes, and DC doesn't not sufficiently penalize landlords who don't make real efforts to find tenants for commercial spaces). But it's still annoying when we have so many restaurants and bars charging these fees specifically to trick customers into dining there, thinking it costs less than it does, but then complain that this is the only possible way for them to stay afloat as a business. Then your business is bad! No one made you open a restaurant.

Many of these places were doing OK until the DSA guilt-tripped DC residents to supporting this ridiculous new bill. The bar and restaurant model, while odd, was working very well for a long time. I paid my way though college working primarily for tips at an upstate NY bar. We did serve wings so that helped. But my point is that very few servers wanted this bill and no owners wanted it. But communists are going to be communists and can't help themselves when it comes to things like this.

A few things:

1) No one was tricked into voting for getting rid of the tipped wage. DC voters went to the polls TWICE to make this decision in elections where it was widely discussed. They had to do it a second time because the restaurant lobby got the council to overturn it the first time.

2) People voted for it because most people in DC are consumers. They want transparent pricing at restaurants. This was the #1 reason people voted for the bill -- because they want to know in advance how much their meal will cost, including service. Secondarily, they want to know the employees at the restaurant are being paid a fair wage because they don't want to patronize business that exploit workers. But it's mostly a selfish desire for transparent pricing.

3) Restaurants in DC made the second bill more likely to pass by engaging in the proliferation of fees during and after Covid. At first people were okay with pandemic fees that restaurants charged to help furloughed workers, pay for upgrades to facilitate outdoor dining and contactless pickup, etc. But after the vaccine, things started returning to normal and not only did the fees stick around, there were more of them. Adding service fees, or fees to pay for employee healthcare, or inflation fees. Even where these fees made logical sense, they made pricing less transparent.

4) The fees also created confusion around tipping. Lots of people were unsure how much to tip or whether to tip at all, because there was no consistency in the industry as to what the "service charge" was for or where it went. People didn't want to stiff servers, but they also didn't want to pay both a 20% service charge AND a gratuity, especially when doing so made dining out cost considerably more than they expected.

5) Restaurants in DC had an opportunity to come together between the two different ballot initiatives on the tipped wage, and settle on an industry standard with regards to tipping, service fees, and employee compensation. Not necessarily to do all the same thing, but to create transparency so people would know what it meant when they got a "Service fee" and what it covered or didn't cover, and therefor know when and how much to tip. They didn't. So consumers responded by voting for the initiative. It had nothing to do with communism or the DSA.

6) And now restaurants continue to refuse to give consumers what they want, which is transparent menu pricing, and are sticking with these fees and blaming customers for their own business failures. And, big surprise, the result is a decline in demand at restaurants and more people just saying screw it, I'll cook at home or get takeout from a fast casual restaurant where I know how much it costs, and be done with it.

It's crazy to me that industry workers and owners still cling to this idea that voters were hoodwinked. NO. Consumers want you to be clear about how much you service costs and what it covers, and you consistently refuse to do this. This is your OWN FAULT.

You get the award for the most Orwellian comment on DCUM.

Pricing at restaurants is completely untransparent now. No one knows which restaurants have these crazy fees and how much they are until they get the bill.

That’s why so many of us have said F this and stopped going to restaurants.

Restaurant pricing is "untransparent" (read: opaque) because restaurants want it to be. All they have to do is roll these fees into their menu pricing and then it would be transparent. It not the elimination of a tipped wage that causes this, it's the desire of restaurants to try and trick customers into dining there by keeping menu prices artificially low and then tacking on fees on the back end.

However, tipping in general does exacerbate this problem because if you could eliminate tipping as a practice, then at least you could just have a conversation about whether a service charge makes sense or is deceptive. But with tipping, it's maximally confusing. Does the service charge take the place of a tip, or is it separate? Are you supposed to tip on top of the charge? If you don't tip on top of the charge, how will that impact your server? Tipping as a practice makes the practice of tacking on fees more confusing from the consumer's perspective.

I don't think you know what "Orwellian" means. Most of this is a question of market behavior, not government regulation.

If your solution involves changing a deeply ingrained part of American culture (i.e. ending tipping), you have a bad solution.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Waiters are surely making less now, if only because now it’s a lot harder to avoid paying taxes

I don’t have a problem with this, and the industry opposition to this is really all about owners not wanting to pay payroll taxes and workers not wanting to pay income taxes.

industry opposition was about owners not wanting to see huge numbers of people stop going to restaurants because it's too expensive, and that's what has happened.

But shouldn't it be the same net cost? Instead we got double dipping.

A National Restaurant Association poll of nearly 1,000 D.C.-area adults found more than half are dining out less because of higher prices. Some said they’re choosing to patronize restaurants in Maryland or Virginia instead."

Prices are up because they added additional fees above and beyond what a tip would be.