SAN FRANCISCO (KGO) — A fee for this, a surcharge for that, it’s become common on restaurant bills.
Bay Area business owners say these fees are to make sure workers get a decent living wage and health care coverage.
But now some customers have started to push back.
And you’ve likely seen them, surcharges tacked onto the tab with different names:
-Service fee
-Labor surcharge
-Fair Wage
-Employer mandates
-Health Care Security Ordinance
-SF Safety and Benefit Charge
“At the end of the day there are always people who try to get around something and find a way to make it work better for them. Folks just have to vote with their feet, get up and get out and go somewhere else that is more transparent,” insisted State Senator Bill Dodd who initially wrote the legislation to do away with all surcharges, only to then exempt restaurants. Here’s why.
“We read, we see on TV that how many restaurants are going out of business in the Bay Area. It’s a tough time for restaurants,” explained Dodd.
He’s right. According to the San Francisco Consumer Price Index, prices for food away from home in the San Francisco bay area went up by 5.2 percent in the past year.
You know what else has gone up for restaurant owner Rene Denis, his rent, minimum wage and that city health permit that in 2008 cost him $600 a year is now up to $1,500.
“It keeps going up. We can’t keep raising our prices in line with that because then our customers get sticker shock,” said Denis who owns Chao Pescao.
MORE: New CA bill could allow restaurants to keep service fees if they are disclosed
A new California bill could allow restaurants to keep service fees if they are disclosed.
So restaurants across the state have started adding surcharges to their menus to make up for the rising costs but sometimes those fees are not so obvious.
According to the law, any extra charges must be clearly and conspicuously displayed with an explanation.
Go on social media sites and the conversation is heated. Here are two examples.
“When I receive a bill that has a service fee or a “mandatory” tip on it, I don’t tip.”
“San Francisco has been doing it for years hence the fact one reason I no longer dine there once a week as I did years ago.”
Loren Heiman created a site called SeeFees.CA, inviting customers to record the surcharge of each restaurant.
“I created this website to make it easy for me and other consumers to easily understand how much something is going to cost before they purchase that and visit a restaurant and sit down,” explained Heiman.
MORE: New California law will ban restaurant surcharges, hidden fees
Starting July 1, restaurants in California will no longer be able to add service charges or other surcharges to your check.
And that kind of disclosure worries some restaurant owners, who have already seen a backlash.
“Oh, it’s hot right now. I read things like Reddit and a lot of social media and people are either posting, ‘Oh, 13% on my bill for the restaurant’ and they’ll call out that restaurant,” he revealed.
At Chao Pescao, Denis charges an extra 5% to help supplement wages.
Faced with some disgruntled customers, some cafes and restaurants are eliminating that surcharge and just increasing the prices instead.
“They were kind of confused, perplexed, sometimes thrown off that made them discouraged from buying that product and stuff like that,” said Baylie Schell of Craftsman & Wolves.
Once they eliminated the surcharge marked on the bill, it made things a lot easier for everyone.
In fact, most people we spoke to would rather pay more for a meal if it meant not paying that surcharge.
“I have $37.65 and that way you can put a meal together from the menu without having to worry, ‘Oh, is there going to be some fee?, I don’t have enough for the fee’ because that’s a deadly moment when there’s a fee,” insisted Wayne Barker, a San Francisco resident.
“I think there’s the simplicity in that and I think it feels a little more transparent. We just came back from Europe where we were encouraged not to tip,” added Skylar James, also of San Franicsco.
Are you more and more confused with your bill every time you go out to eat at a restaurant? You might have noticed an “extra line” on your receipt. It’s probably a service charge, a healthcare surcharge, or a minimum wage surcharge.
That’s what they do at Zazie, a popular French style restaurant in the Cole Valley neighborhood.
They don’t add a service charge, no health insurance mandate ever goes on the bill and they ask customers not to tip their waiter. So how do they make that work?
Back in 2015, we did raise our prices 20%,” explained the owner of Zazie, Megan Cornelius. How that 20% is used, is clearly explained on the menu.
“It says tip free restaurant, all prices include a living wage, fully funded health care, dental care and 401K for all of our hard working staff,” she told us.
Rene Denis says that model doesn’t add up to a solution for him.
“No other way to put it. We’re robbing Peter to pay Paul,” he said.
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