There’s no question that dining out these days has gotten much more expensive. Inflation is pumping up prices, staff shortages are still an issue (Nation’s Restaurant News reports that it may be on the mend, however slightly), and service fees supporting employees are now a common sight on receipts (and have been for years). Those fees are typically earmarked for things like healthcare and livable wages for both the front and back of house, and it’s those fees in particular that have gotten some diners riled up.
Groups of Reddit users in Los Angeles and Chicago have started compiling spreadsheets of local restaurants that tack these service fees onto bills. Those Reddit threads have also hosted thorny complaints about specific restaurants, and they raise questions about where that money goes.
Eater Chicago notes that the fees at the restaurants listed on the spreadsheet range from 2.5% to 25% of the total tab, with the spreadsheet’s contributors claiming that it’s not always transparent where the funds go. The Chicago spreadsheet (which you can view here) contains a notes column that explains how each restaurant allegedly allocates that money, though as a crowdsourced document the information isn’t consistent and we can’t vouch for its accuracy. Other notes within the spreadsheet make claims such as this:
Bartender confirmed charge does not go to staff, it’s just an additional fee the restaurant collects. He encouraged me to ask management about it who immediately offered to refund the surcharge without any explanation what it was for.
And some of the notes just sound like an excuse to complain: “Forced gratuity and process fee is deceptive and assumed.”
The Los Angeles spreadsheet (which you can view here) seems to have slightly more detailed notes quoted straight from most of the establishments explaining where all the money goes. Eater Chicago also notes that the spreadsheet often fails to distinguish different types of surcharges from each other, such as a “service fee” that allegedly funds employee health insurance versus a standard fee for using a credit card (as opposed to a cash payment).
Comments on the Chicago Reddit thread range in severity, but all of them seem informed by anger and frustration. Some users say they understand charging service fees for employee health insurance, but lament the rate at which they’re being charged. Others theorize that restaurants are using the fees to try to dodge tax laws:
Fuck all the places doing this surcharge bullshit. I heard a rumor that surcharges are taxed differently than actual menu items so it may also be a ploy to raise prices without being taxed on them as income. I’m not a tax lawyer so I don’t know if it’s true, but I wouldn’t put it past Chicago restaurant to pull shit like this.
And other people simply wish the fees were baked into the menu prices so they don’t have to deal with the inclusion of service fees, plus an additional tip. There’s no doubt that this stuff is complicated, and restaurants are still trying to figure out the most equitable way to deal with tipped wages while still retaining staff and remaining profitable.
It’s important to note, however, that sentiments on tipping and service charges have vacillated over time. In 2020, restaurateur Danny Meyer announced that after five years of instituting a no-tipping policy at his restaurants, they’d end the practice and revert to a tipping model. We’re a long way from figuring out the best approach—and the model that works for one restaurant won’t necessarily work for another.
However reasonable or unreasonable their arguments might be, the diners who seem most frustrated by service fees all call out what they see as a lack of transparency about the surcharges. Many restaurants are already attempting to solve for this by placing a notice on the menu or website indicating that the service fees are in play, and even how they’re allocated in some cases.
If diners are sensitive to paying these fees, they can call the restaurant ahead of time to check whether the bill will include such charges. If you really can’t stand them and will brave any social interaction to avoid them, many restaurants also allow patrons the option to request that the fee be removed from the bill, which might be an awkward conversation, but is typically accommodated.
Unless there’s a complete overhaul of restaurant culture or the economy in which we find ourselves, it’s not likely these fees will go away. Much of the industry is experimenting to see what works, and what doesn’t, and a lot of the changes are, best case scenario, trying to correct broken aspects of the system. If you aren’t sure where the fee is going, it’s reasonable to ask the restaurant; just remember that your server didn’t make the rules and shouldn’t catch any wrath you might have about the policy.