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Restaurants fight back against the FTC crackdown on 'junk fees' as diners balk at new charges

Lawmakers want to crack down on “junk fees,” but restaurants are trying to stay out of the fight.

Surcharges or fees covering everything from credit card processing to gratuities to “inflation” have become more popular on restaurant checks in recent years.

Last year, 15% of restaurant owners added surcharges or fees to checks because of higher costs, according to the National Restaurant Association. In the second quarter, 3.7% of restaurant transactions processed by Square included a service fee, more than double the beginning of 2022, according to a recent report from the company.

Opponents of the practice say those fees and surcharges may surprise customers, hoodwinking them into paying more for their meals at a time when their wallets are already feeling thin. Fed-up diners compiled spreadsheets via Reddit of restaurants in Los Angeles, Chicago and D.C. charging hidden fees. Even the Onion took a swing at the practice, publishing a satirical story in May with the headline “Restaurant Check Includes 3% Surcharge To Provide Owner’s Sugar Baby With Birkin.”

I_Has_A_Hat ,

Add a service fee or an inflation fee if you’d like. I’ll circle it and leave a big fat 0 for the tip. Without it, I’ll leave 20% minimum. Problem solved.

westyvw ,

I am tired of prices going up AND tips going up. It already was a percentage of a total, and now it’s a higher percentage of a higher total?

I remember 10 percent tip. Was sort of annoyed at 15. At 20 percent with five times the bill it’s gotten way out of hand.

And now my area is trying to normalize 25 percent, with 30 being “good service”.

I am about to say fuck it and go back to 15. It’s either that or never eating out again.

Melody ,

I never advanced from a 10% tip…if I thought the service and establishment justified tipping at all. Otherwise 0% tip.

Tipping is strictly optional; and anyone pressuring you otherwise is an asshat who doesn’t need your business.

Bluefalcon ,

I’m tired of tips in general. Every job should pay a liveable wage. Fix the system. The more in the middle class, the more things we can have. Healthcare, education, housing, food, innovation,…etc. Fuck ripping people off so a few assholes can sleep with women just as shallow as them or rape ones that turn them down.

FirstCircle ,
@FirstCircle@lemmy.ml avatar

A “quick haircut” sort of place (kind of a barber, sort of , but super-high-volume and just one worker, the owner) that I’ve been using for a while now has a super-annoying dark-pattern in their payment flow. They book appointments, and take in-person payments using Square. After your cut, when you’re paying via their hand-held kiosk with a card, the screen shows you a bunch of huge “tip amount” buttons, and it’s implied that the customer has to choose one of them, while the provider looks on, in order to finish the transaction and leave (probably not true - they’ve already got your CC info by that point). Guess which button is highlighted/pre-selected and front-and-center! That’s right, 20%. If you want to select another tip, or no tip, you have to select another button while she watches you do so. The owner lists all prices on her square website, and it’s those prices you think you’ll be paying when you book an appointment online, but she still feels the need to be tipped. You KNOW that the provider/barber has configured Square to present that UI to the customer. Not quite the same as the restaurant fees scam, but it’s actually more manipulative though, in my view.

mp3 ,
@mp3@lemmy.ca avatar

Restaurant operators say the fees keep their menu prices lower

lmao, they just want to use deceptive pricing in their menu.

Fuck that, increase the price of your stuff instead of being dishonest.

mokus ,

“Lying about our prices on the menu keeps the prices on the menu lower!”

mlg ,
@mlg@lemmy.world avatar

The weirdest one has been watching the “15%+ service fee” go from groups of 8 to 5 in only 2 years.

Also an easier way to alleviate junk fees would be to remove credit card transaction fees.

You know the thing that banks have been exploiting for decades to make profit out of virtually nothing.

It’s like paying for gamepass but for every time you open the game.

And don’t come in here saying that it covers PCI DSS requirement. This technology is cheaper to run than a rassberrypi mining dodgecoin.

eran_morad ,

Give me the real price or I will go elsewhere.

mozz ,
@mozz@mbin.grits.dev avatar

Am I the only one? The whole thing of charging 4% if someone’s paying by credit card, because that’s what it costs to run their credit card, makes perfect sense to me.

Maybe it is because I used to be involved with a business that paid credit card fees. What we eventually wound up doing was publishing prices that were nice round numbers that roughly included the CC fees, giving a discount below the published prices for cash payments, and including a separate 3% CC fee onto custom quotes that were itemized, if people were paying with a card. That seemed like a pretty solid system. But yeah I definitely get it if a restaurant wants to say that there’s a certain percent fee if you’re paying with a card.

“Cost of living adjustment” can fuck off though

AlwaysTheir ,

Cash discount is the way to go. Price is the price but offering discounts is fine.

Crashumbc ,

Keep in mind, these “service charges” are usually double to triple what the actual thing costs…

5opn0o30 ,

Cash has fees associated with it too when you have a business bank account. It’s probably not a as high but might be now that there is so much cashless.

JCreazy ,

I’ve never been to a restaurant with fees and if I ever found one, I wouldn’t be going there. I rarely eat out anymore at all though. High prices for mediocre food and mediocre service keep me away.

ArbitraryValue ,

Note that by “stay out of the fight” the article means “stay out of the Biden administration’s crosshairs” which actually means something different.

ravhall ,

I won’t return to a place that has a “cost of living charge.” Don’t make my dining experience about your protest. If you need to raise prices… just raise them.

Sarmyth ,

Yup, that’s my stance 100%

TachyonTele ,

Get rid of banks processing and merchant fees to start. Banks can make it by just fine without those.

Fixbeat ,

What is the purpose? They control the base price, so why break it out? I guess they are just trying to pass the buck symbolically and literally.

bobs_monkey ,

It’s bait and switch. You display prices to attract customers (think how restaurants display their menus out front or online) and then raid them with add-ons at bill time.

MsPenguinette ,

bait and switch

Aka fraud

ArbitraryValue ,

Sometimes the fees are in small print somewhere on the menu. I suppose that gives the restaurant some legal protection, although I’m still totally on the “menu prices must actually show how much that food costs” team.

bobs_monkey ,

It’s only fraud when the plebs do it, to business owners it’s “strategy” /s

givesomefucks ,

We need to go to what other countries do.

No tips, people earn a living wage. And all taxes and percentage fee charges are baked into the price you see.

If something is $99.99 on the sticker/menu, then you pay exactly $99.99

Aurenkin ,

I forget how much I take this for granted until I visit the US. It’s such a hassle, I guess it’s one of those things you just get used to after while to be fair but when you’re not used to it it’s baffling.

SnotFlickerman ,
@SnotFlickerman@lemmy.blahaj.zone avatar

It’s purposeful forced mental labor.

They want the customer to be confused, stressed, and ready to just pay to make it all go away. They make the customer do a lot of work to be informed about their products.

Anything where the customer knows the situation and the price is anathema to these dorks.

watson387 ,
@watson387@sopuli.xyz avatar

Exactly. Perfect example: Microsoft 360 pricing.

givesomefucks ,

Yeah, you just always assume you’ll be nickle and dimed.

People bitch about it in food delivery apps, and it is a problem there, but it’s a problem offline too. You just see it immediately on the apps, where if you’re sitting down you don’t realize till after you ate and you don’t care as much.

Ironically seeing the real total up front makes people more angry than if they don’t know till after they ate.

watson387 ,
@watson387@sopuli.xyz avatar

I’m from the US. I assume outright beforehand that any private business I have to deal with is trying to scam me, because in my experience they are. After speaking to a few contenders, you pick the one that comes off as least slimy or do whatever it is yourself if they’re all completely shitty.

TachyonTele ,

Agreed. The counter argument is that every state and county has different tax rates. One valid reason taxes that are percentages.

But the register can deal with all of that just fine.

jjjalljs ,

My tinfoil hat theory is part of this is because conservatives want to keep people low grade mad at government. Like they keep stuff like “5% tax” highly visible so people see it and get mad, then later they can campaign on how the government is axiomatically bad etc etc.

PM_Your_Nudes_Please ,

I mean, the strategy itself isn’t even a conspiracy theory. That’s literally their game plan for dismantling established departments and government branches. The US Post Office is a great example. Conservatives make it harder and harder for them to stay funded every year, all in an attempt to slow down postal service and drive up delivery prices. They intentionally add bloat, cut funding, and increase costs. This is explicitly so they can point at the USPS and go “look at how bloated and ineffective this is! We should privatize it instead!”

snooggums , (edited )
@snooggums@midwest.social avatar

All listed prices should be the final maximum cost for any specific product. “Additional fees may apply” should not be allowed, as they exist to deceive the user about the final cost.

Upcharges for additional things is fine, as long as the customer knows what the additional cost is.

Also, tipping needs to fuck off and all employees need to be paid a living wage. If businesses can’t pay a living wage they don’t need to exist.

wazoobonkerbrain ,
@wazoobonkerbrain@lemmy.world avatar

abiutbthe fi al

You okay?

snooggums ,
@snooggums@midwest.social avatar

My thumbs must have had a seizure!

bobs_monkey ,

Yup, at this point it’s just false advertising. Per the article, restaurant owners are saying they want to keep menu prices low as to not scare off customers, which is really just a fancy way of saying they’d rather bait them on the promise of low prices, and then ram the full cost of the meal up their asses at the end of it.

Just roll everything (cost/taxes/tips/fees) into the menu price. This constant bait and switch in the US needs to finally die. If you won’t survive by showing the true costs your customers need to pay, maybe you need to rethink your business model or find a new profession.

JCreazy , (edited )

The way I see it, if a restaurant can’t provide a living wage and also provide reasonably priced food, then the restaurant is being run poorly and the money is not being managed properly.

catloaf ,

And/or the cost of materials is also extortionate. I’m sure Sysco and other restaurant supply companies have also jacked their rates in recent years.

MediaBiasFactChecker Bot ,

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