Diners Not Pleased With Hidden Surcharge on Restaurant Bill

May 16, 2019 Updated: May 16, 2019

A diner wasn’t happy when he received a surcharge on his restaurant bill while eating in San Diego, California.

A “California Mandate” surcharge for more than $3 was featured on his bill, and it was introduced to offset the cost of the recent minimum wage hike, Fox5 reported.

“I wasn’t told there was going to be an extra charge on my ticket. They should’ve told us or put up a sign out front saying ‘hey we’re charging an extra percentage,'” said Gallardo in the report.

In all, it was 3 percent. At the time, the charge was applied to several restaurants around San Diego.

“The fee for increasing the minimum wage” shouldn’t be applied, and restaurants should “sell more,” he said. Gallardo said the businesses shouldn’t charge the customers extra.

“The surcharge works better than raising prices and helps offset additional operating expenses,” said David Cohn who is in charge the Cohn Restaurant Group, according to the Fox affiliate. “It’s something being done all over the country.”

“[The] cost of living is already expensive enough … we all need a raise,” said a woman who was asked by the Fox affiliate. She added that the surcharge isn’t “right.”

One activist group spokesperson, at the time, released a statement defending the baseline minimum wage.

“We’re trying to eliminate the two-tiered minimum wage,” said Jessica Yanez, the campaigns manager for the D.C. chapter of the Restaurant Opportunities Center United, according to a report. “It’s not just about the money, it’s about the perverse work conditions that come from working for tips.”

More Surcharges?

Some restaurants in Texas are reportedly adding a new charge to diners’ checks, and it might become a nationwide trend.

Foreign & Domestic, in Austin’s North Loop, and Hoover’s Cooking, in Cherrywood, added a health care surcharge to checks to cover the cost of sick leave and health insurance, Fox News reported.

Foreign & Domestic added a 3 percent charge to each bill. Patrons can deny the charge, but its co-owner, Sarah Heard, said many opt not to.

Heard told Fox News, “Since January 1 we have had less than five guests ask to have the fee removed.”

Nathan Lemley, the other co-owner, told KVUE that Foreign & Domestic chose to charge more rather than raise the price of food.

“We also started applying a three-percent surcharge on customer bills. If they would like, we can remove it,” said Lemley.

“If we were to raise prices on our food, we would have to raise a dollar per item. Basically, this would be the least amount we could raise and that would actually cost the guest more,” he explained.

Criticism

Ryan Sutton, in an opinion article for Eater.com, said that restaurants shouldn’t “be allowed to add surcharges.”

“If adding a few percentage points to dinner doesn’t seem like that big of a deal — five percent works out to six bucks on a $120 bill — remember that restaurant bills are already contain[ing] at least one more ‘extra’ than at a typical retail establishment,” said Sutton’s op/ed piece.

Sutton noted that there are a number of fees.

“Of course there’s the standard sales tax, levied on most transactions in the city, followed by the optional gratuity line, which is unique to bars and restaurants. Add on the extra surcharge and you’ll be at three discrete supplemental charges at your local cafe. A taste of this ridiculousness is already fully apparent to anyone who has ordered delivery from Caviar, which levies a service fee, permits delivery fees, and adds an optional line for courier bonus,” says his article.

“There’s something particularly disingenuous about mandating a restaurant surcharge while keeping the tip as the only optional fee in a restaurant transaction, considering that the tip constitutes the bulk of a waiter’s compensation,” he opined.

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