The Law Offices of Brandee J.K. Faria, LLLC
Restaurant service fees and other added charges
Restaurant service fees and other added charges

Restaurant service fees and other added charges

Aug 8, 2023 | Class Actions

In 2020, many people stopped eating out at restaurants, even in Hawaii. Three years later, more and more people are taking vacations and dining out again. However, since restaurants and other businesses took a big financial hit during the “down” time, owners have struggled to stay afloat, which seems to have led to a problem for customers. In many places, customers have been upset when they notice added charges on their bill, such as a “service” charge. Has this happened to you?

Like many people, you may have mistakenly thought that the service charge was simply a gratuity for your server automatically added to your bill. This isn’t true. A tip (gratuity) is not compulsory, meaning you do not have an obligation to provide one. On the contrary, if an establishment adds a service charge to your bill, it is compulsory. What’s worse, you don’t have a say regarding the amount, which could be anywhere from 3% to 20%. In addition to a gratuity, these added charges greatly increase the bill.

Why are restaurants adding service charges and other fees?

A service fee is like a tax. It is pre-determined and added to your bill. You must pay it. Many restaurant owners have said that an additional service fee helps them boost the pay of “back-house” workers; these are workers behind the scenes, such as cooks, dishwashers, etc., rather than “front-house” workers like hosts, wait staff and table bussers.

There have been numerous complaints (and lawsuits) by patrons who say business owners should have to inform customers ahead of time if extra fees are going to be on their bill so that they can make informed decisions about whether to dine there.

Some restaurants are adding fees to avoid increasing menu prices

Many restaurant owners say they have chosen to add service fees to their customers’ bills, so they don’t have to hike the prices on their menus. Monies paid for added charges can then cover expenses for ingredients and other cooking supplies, which business owners say have gotten out of hand due to inflation.

Do you believe customers should foot the bill for ingredients? What about expenses restaurant owners have due to credit card fees or third-party apps? This is another reason many business owners have added service fees to their billing systems.

What’s to stop a restaurant owner from pocketing your money?

There are currently no laws to regulate service fees on restaurant bills. If the owner wants to use your money to tip workers, it’s acceptable. However, business owners could also decide to keep all the money they rake in from adding extra charges to their patrons’ checks.

If you’ve encountered legal problems because of added fees on a restaurant check, you may want to discuss the issue with someone who is well-versed in personal injury issues and class action lawsuits.