Every Restaurant Fee I've Encountered, From Valid to Absurd
Pitchforks are out for Ticketmaster, but restaurants are making out like bandits
Restaurant Fees Are Out of Pocket
When did this shit get so complicated? Dining, in theory, is a simple exchange: money for goods and services. Somewhere along the line, we decided to complicate this concept by introducing convoluted ways of determining how much is owed. First came taxes — a set percentage determined by your local jurisdiction. Then we started tipping — once a token of appreciation for exemplary service, now a flat 20% or else you’re an asshole.
And now, we’re facing the fee.
I paid Mabel Gray a visit when I was back in Detroit last week. To book a table, I had to put down a $25 per person deposit, plus a $3 credit card processing fee. Then, on the bill, a 20% auto gratuity was assessed. The server gave a nice little spiel about the gratuity getting spread across the staff, and that additional tips would go directly to her. Was any part of this methodology particularly offensive? No. But the combination felt like a lot of rules for something as simple as eating dinner.
I recognize the restaurant business is a tough one, I really do. Margins are tight. Costs are rising. Workers deserve to be paid a living wage. There are certain safeguards restaurants need to take to stay alive and profitable. And those costs should be passed on to the customer! But the way they’re being assessed is out of whack. As a diner, being nickeled and dimed is a shitty feeling, and can turn me off from a restaurant. Value matters. And when the fees pile up, value (or perception of value) suffers.
Restaurant fees can be hyper-specific or incredibly vague. Sometimes they feel snuck onto the itemized bill; other times they’re being printed on menu footers with cute messaging about employee welfare. But this psychology is messed up to me, and it’s borderline manipulative. You’re going to rope me into the guilt you’re feeling about your employee's compensation?
Another maneuver is allowing customers to “remove the fee upon request.” It gives the illusion of choice, but really, who has the gusto to tell their server to take the “server health & well-being fee” off the bill?
Off the top of my head, I listed out every type of fee I’ve encountered. Plus, other strange conventions related to tipping and paying. I bucketed them from valid to absurd haha.
Keep this in mind:
This is about principle!! Not absolute dollar figures. In the grand scheme of things, these fees are relatively insignificant compared to the overall cost of dining.
The distinction of absurdity is strictly through the lens of the customer. That’s me. The guy sitting in the restaurant. How does it feel when I get the bill, see the fee, and lay my card down?
I am not a tax aficionado. Surely there must be backend reasons for some of these structures. If you have tax expertise to bestow upon the Flood’s community, please drop a comment.
Every Restaurant Fee I've Encountered, From Valid to Absurd
Valid
Corkage fee — 100% valid. If I bring my own bottle of wine, paying to have it serviced is very fair. Paying corkage on top of the price of a bottle purchased at the restaurant, however, is ridiculous.
No tipping accepted, cost built into dishes — This is the anti-fee, really. I’ve seen this a few times, most recently at Thattu in Chicago. It’s a nicer, sit-down restaurant where you order on your phone (weird), but the service after ordering was really good. At the end, there wasn’t even an option to leave a tip. “Everyone working gets paid a fair wage,” they told me. It may be aspirational, but it feels like a step toward an equitable, more transparent system.
No-show fee — If you have a reservation and no-show, no-call, you deserve to be charged. That’s rude ass behavior. If you need to cancel, give as much notice as possible. Anything from $10-50 a head is fair here, IMO.
Cake cutting fee — Similar to corkage, and still fair. It’s partially for the cost of service — slicing and plating — but even more to cover lost revenue from a group not ordering dessert.
Dynamic prix-fixe pricing — I thought this was pretty brilliant when I saw it utilized at Schwa in Chicago. The price moves with demand for reservation days and times. If you want primetime Saturday night, it’ll run you $245. Wednesday at 9:00 pm, $175. Supply and demand.
Auto gratuity on parties of 6+ — Large parties are harder to take care of! This ensures servers get a nice floor tip for groups that involve some extra effort.
Per person deposit — This might sound crazy, but I wish more places required a deposit towards the bill. Cuts down on res hoarding and encourages more intentional bookings! There’d be more availability, less flaking, and the Resy bot nerds would need to recalibrate their algorithms. No-shows lose their deposit. Cancellations get it back. It’s a good system.
<5% employee healthcare fee — There’s a gray area about how service fees are getting used by owners. But legally, if the line item is listed as “healthcare,” it needs to be used for such. Healthcare is wicked expensive, and if a small added fee helps cover or subsidize benefits for staff, that’s a hard thing to argue with.
Pushing It
Live entertainment fee — At a nice jazz club instead of cover, fine. But I’ll never forget spring break in Fort Lauderdale, eating at a mediocre brunch spot with a dude butchering “I wish you would step back from that ledge my friend” and getting charged for it.
Auto gratuity <18% — Always an interesting one to me. If you’re gonna do an auto-gratuity, I actually dig 18%. I think there’s a much higher chance a customer will add an extra tip on an 18% auto gratuity than, say, 20%. I bet 18% puts more dollars in the pot. Would love a case study on this.
Auto gratuity >18% — Same story. Not the end of the world, considering you’d probably tip 20% anyway. But if you get to 22+%, we’ll start having problems.
<5% kitchen appreciation fee — Essentially a tip for back of house. The first time I came across a way of compensating BoH was in La Jolla, CA, in like 2013. You could add a “Kitchen Sixer” to your bill for $10 and “buy the kitchen a round.” I prefer opt-in appreciation over a mandatory charge. But either way, supporting the line cooks and dishwashers is cool with me.
<5% health & wellness fee — Less specific than the healthcare fee, more specific than a general service fee. Once again, hard to get mad about something with positive intent, but ultimately, it’s awkward execution and a weird thing to put on your customers.
3-5% credit card processing fee — Reminds you how filthy rich credit card companies are. Merchants pay an uncanny amount of fees to cc processors, yes. But it feels petty to pass this through to customers as a line item. Build it into prices or go cash-only.
<5% environmental fee, or sustainability fee — Pulling on the heartstrings with this one. The psychology here is fascinating. Makes you believe the restaurant is doing something noble. But don’t make the customers pay for your green star PR campaign.
<5% service fee, or administrative fee — Seemingly the new standard. Usually something between 3-5%. If it’s not earmarked, I think this just needs to be a price increase. A vague, itemized line on your check is annoying. Bump the prices up a $1.
Per person deposit + credit card processing fee — The Mabel example. I just think putting the customer in a position where they’ve sunk even a small amount of dollars before they even step in the door is bad business. Again, the deposit I’m fine with. But this feels like a res fee. And for a place that doesn’t take reservations over email or phone, this makes the fee unavoidable.
Counter service pre-tip — Down in Austin, there’s a little “counter service,” fine-ish dining restaurant called Birdie’s. Their food is a delight. Their payment methodology is a mess. You line up and order at the counter, then pay your tab, tip, and service fee. After paying, you’re seated and taken care of by a server. If you want another round of drinks, you’ll need to start a new tab and pay + tip again. This isn’t even about fees, I just think their model is clunky and beyond stupid from a customer experience perspective. Tipping on a $300 tab before you even sit down is kinda nuts.
Auto gratuity on takeout orders — I got hit with a 15% auto gratuity on a damn cold brew at Commonwealth, and then was prompted to tip on top of the amount after fee. The level of service provided on takeout versus dine-in is vastly different, yet the gratuity is almost the same. Don’t love it.
Reservation cancellation fees — I get why these exist, but I don’t think they should. Maybe a strike system if you late-cancel too many times. But charging a customer who didn’t actually dine with you is a guaranteed way to lose them forever. For a restaurant that also takes walk-ins, a cancellation is easy to fill. Charging for a cancellation with more than 24 hours' notice would push this into absurd territory — that’s more than enough notice.
“25% service charge is applied to all full-service dine-in checks to ensure our deserving staff members receive equitable pay and benefits. Thank you for supporting fair compensation for industry employees.” — A nicely worded, empathy-engineered statement from Daisies in Chicago. But the highest percentage fee I’ve seen to date. It stands out. I’ll absolutely tip 25+% on my own accord if the service was stellar, but forcing it is wild work.
Absurd
Inflation fee, or supply chain surcharge — You can’t be doing this shit. Yes, costs are rising. We’re all feeling it. As a customer, my unspoken agreement with a restaurant is that I will purchase food at a price that is fair to me and makes the restaurant a fair margin. It’s a burden to change prices, but if the cost of producing items climbs, raising prices to preserve margins is an explicable response! This one isn’t about money, it’s about perception.
Takeout packaging fee — I’d somehow rather get charged the auto gratuity on takeout than something this stupid.
3-5% credit card processing fee, doesn’t accept cash — If you’re only going to accept cards and charge people to use cards, that’s very lame.
Mandatory water service fee — I’m still personally offended by some of BAK’s restaurant principles. One of which was that their reverse osmosis water costs $8/person. Not optional. Incredibly crisp water. But for a tasting menu spot, it made absolutely no sense why it wasn’t built into the prix fixe. Free tap water is a rare edge American dining has over Europe.
Any flat fee >5% — Once you exceed 5%, it’s reasonable to expect the fee will cut into the tip. Jon and Vinny’s recently changed their fee after a lawsuit, but it was previously an 18% service charge with an expectation that you’d still leave a full tip. That meant nearly half the cost of the meal was tax, tip, and fee.
Per person reservation booking fee — Not a deposit, a fee just to book. 4 Charles Prime Rib charges $5 per person just to make a reservation. Plus a 3% surcharge on all checks “as a way to offset rising costs associated with the restaurant.” Paying $5 a person to make a reservation at a place where you’ll spend hundreds, maybe thousands of dollars, is so backwards to me. I know damn well they can cover their own Resy fees. My hypothesis is that they know most of their reservations are sniped by bots, so they’re essentially charging the bot owners $20 a pop to keep doing their dirty work. Shady.
Anything I missed? Drop a comment — commentary, criticism, and expertise are more than welcome.
I was charged $250 by Pierre's in Bridgehampton because I cancelled two hours past their 48 HOUR cancellation policy. This is also why I hate the Hamptons.
Mandatory water service fee is the grossest thing I've ever heard of