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From service charges to staff appreciation fees, extra charges are appearing on restaurant tabs to fight inflation

Oct 2, 2023, 10:52 PM

SANDY — Like anyone else who eats out, I have noticed the price increases in restaurant menus over the last few years. But recently when I took my family out for pizza, I spotted something lurking at the bottom of the check I hadn’t seen before – a service charge.

The tacked-on charge is described as a “2% kitchen appreciation fee.” While I believed it to be odd, turns out – it isn’t.

“A lot of companies are emboldened to add these surcharges these days,” said Ted Rossman, a senior industry analyst at Bankrate.

He said these sorts of add-ons have become fairly common as restaurants battle inflation and other rough economic factors. In fact, the National Restaurant Association has found 16% of restaurants have added surcharges to their checks to combat inflation.

“A lot of businesses are adding these kinds of fees instead of raising prices,” said Rossman, “Or instead of raising them further.”

The fees come in many forms. Some restaurants charge more to use a credit card. Some charge if you bring your own wine or if you bring your own birthday cake. Some automatically add a gratuity. Others are more ambiguous: a service charge, a COVID charge, or a surcharge for staff appreciation.

I took my receipt to Michael McHenry, executive director of the Utah Restaurant Association.

Matt Gephardt and Michael McHenry reviewing and discussing the service charge Gephardt received on his restaurant check. (KSL TV)

Matt Gephardt and Michael McHenry reviewing and discussing the service charge Gephardt received on his restaurant check. (KSL TV)

“To me, that type (of fee) sounds a little bit weird,” he said. “I’m just not a big supporter of adding additional fees to the guest experience. Especially, from a service standpoint.”

In addition to his association role, McHenry owns several restaurants including Sunday’s Best in Sandy. His dining rooms are not immune from the impacts of these unique economic times.

“Now, I will say they are tough,” he said.

McHenry thinks rather than nickel-and-diming people on their way out the door, his fellow restaurateurs would have more success by raising menu prices to where they need to be.

“Find yourself in a situation where how you are pricing, how you are entertaining – the very operation and experience of your business – that you can do it in a viable way,” he advised other restaurant owners and managers.

Then give diners a great experience that leaves them wanting to come back.

“They walk through our door to be rewarded on their palate,” McHenry said. “They don’t walk in our door to be disappointed.”

In addition to his position in the Utah Restaurant Association, Michael McHenry is the owner of Sunday's Best in Sandy, Utah. (KSL TV)

In addition to his position in the Utah Restaurant Association, Michael McHenry is the owner of Sunday’s Best in Sandy, Utah. (KSL TV)

Restaurants are certainly not alone trying to come up with creative ways to pad their bottom lines. From airlines with their bag fees to hotels with their unavoidable resort fees to the widely-reviled processing fees that come with concert tickets. Restaurants are just the latest.

“We’re all getting hit with invitations to tip and different surcharges,” said Rossman.

Though we may be sick of all these additional charges, he says as long as restaurants and other businesses keep making money – expect to see more surcharges.

“It’s just getting pretty excessive.”

As for the pizza restaurant that recently hit me for the add-on 2% kitchen appreciation fee, well, I called to see if they would talk to me about their surcharge for this story. I was sad to learn they have since gone out of business.

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From service charges to staff appreciation fees, extra charges are appearing on restaurant tabs to fight inflation