Sick restaurant surcharges you shouldn’t have to pay — or should you?

by Christopher Elliott on June 7, 2013

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Ward Chartier almost choked on his breakfast croissant he ordered at Oakland International Airport recently.

The reason for his consternation: an item on the bill that he thought he recognized, but hoped he didn’t.

It said, “EmpBen_Srchg” and it came to 12 cents, or about 2 percent of his bill.

“I interpret this to be employee benefit surcharge,” says Chartier, a consultant who lives in San Ramon, Calif. He asked me if I knew anything about the mysterious fee.

I didn’t, so I asked Oakland Airport.

“The Port of Oakland agreed to permit its concessionaires to add a surcharge of up to two percent on guest checks to cover the cost of providing medical benefits to its employees,” Joanne Holloway, an airport spokeswoman, explained. “The businesses are required to post notification of this charge on its menu boards and on the guest receipt.”

Odd items on a restaurant bill aren’t new. In San Francisco, restaurant patrons have faced even higher surcharges on their restaurant bills, which may or may not be used to cover employee healthcare. In Florida, one restaurant chain owner last year imposed a new fee to cover the costs of Obamacare. Oakland’s EmpBen_Srchg was added last May.

But the fee raises a set of bigger questions: Are these extras reasonable? If so, how should they be disclosed? And is there a better way to buy a croissant?

To the last question, Chartier knows the answer. Yes, absolutely. The cost of a pastry should be baked into the price.

“Is this the wave of the future, that we travelers will be nickel-and-dimed by every purveyor along our travel route?” he wonders.

Fee frenzy

Is a small surcharge on your fast-food bill a reasonable thing? Well, yes and no. It is reasonable for an employer to cover the healthcare costs of employees. But tacking it to a bill without notice is a questionable practice.

Customers don’t really care about the extra costs of doing business, for starters. Even state and local sales taxes are more or less irrelevant to them. All they care about when they’re running to catch a flight is the grand total.

Airport patrons like Chartier anticipate that their bill will be a little higher once you add Oakland’s city tax and California’s sales tax — it adds a total of 9 percent — but in an ideal world, the price they see for that croissant would be the price they actually pay. No surprises.

Add another surcharge or two, and it becomes difficult to estimate the actual price of a meal.

Breaking out healthcare costs as a “surcharge” benefits Oakland Airports’ vendors in an important way: It allows them to quote menu prices that are artificially low — kind of like what airlines did before the Transportation Department ruled that they needed to offer an “all in” fare.

Chartier’s menu didn’t warn about a 2 percent surcharge. It was sprung on him at the cash register, he says.

I know what you’re thinking: what’s the big deal with two percent, anyway? Besides, it’s taking care of sick employees? Don’t you have any compassion?

Of course I do. But what happens when a business decides to break out the cost of rent and insurance as a separate fee, too? You could end up with restaurant bills that look like a car rental invoice. Once you add all the taxes, transportation fees and surcharges, your bill has doubled. (To be fair, most legitimate car rental companies quote a post-surcharge and tax rate. But not all of them.)

Whose fault is this?

The restaurant business isn’t easy. My grandfather owned and operated a diner in Charlotte for many years, and I grew up hearing stories of long workdays with no weekends. But even my grandfather paid his employees a living wage and refused to play price games with his customers.

The current system, which allows owners to pay restaurant servers substandard wages and then forces workers to rely on tips for survival, seems fundamentally unfair — not just to the workers, but to patrons like Chartier.

Doesn’t it seem wrong to count on our charity to supplement a server’s wages? Shouldn’t a tip be a reward for excellent service instead of something workers depend on?

But the latest surcharge may be a fee too far. Quoting a customer one price but to then add a fee to cover a server’s medical bills makes a restaurant meal look cheaper than it is. And it makes restaurant owners look cheaper than they should be.

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  • Stuart Watson

    Adding the surcharge(s) to the bill keeps from having to reprint the menu.

  • Johnp

    A question for anyone here: While in Venice, Italy, recently, my hotel charged me for a glass of Heineken beer 4.50 euros; while in the heart of Venice I was charged 8 euros for the same size beer. Both times I was seated at a table. Would you have said “no thank you” to the waiter after he informed you as he placed the beer on your table?
    I realize it would have been wise of me to ask BEFORE as that would have allowed me to simply walk away. But now that the beer is on my table untouched, do you feel it is ok to just say that is too much for a beer and walk away from the table? All replies and thoughts appreciated of any kind. Thanks.

  • BobChi

    Chris is absolutely right. Breaking out charges makes it possible to quote artificially low prices, which is deceptive, and furthermore gives the business that does it an unfair advantage over the honest business that quotes its actual price upfront. 2% isn’t very much, but this sort of thing needs to be nipped in the bud, because it will only grow if people get away with it.

  • BobChi

    Was the beer bottle or can opened? If not, I think you could ethically inform the waiter and walk away, with a decent tip for the server’s trouble. If it was opened, you are certainly responsible for paying for it. One person’s opinion.

  • Johnp

    I neglected to mention both beers were draft served in a glass.

  • KarlaKatz

    Because the beers were already poured and served, you are definitely responsible to pay. I’m surprised you didn’t check the posted rate, before sitting and ordering; that’s almost a given anywhere in Europe. In fact, in some cities/countries, posting menus outside the doorway is the law, and patrons are expected to review them before entering the establishment.

  • Charles Smith

    Seems like it might get to where tipping would just not occur if the ‘Employee Benefits” surcharge takes hold. Why tip, if the owner is adding charges to cover the expenses of the employees.

  • Johnp

    There were NO posted rates or prices for draft beers at either location. However, the hotel menu probably did contain prices specific to draft beers. But thank you for your reply.

  • Johnp

    And, not that it really makes a difference, it wasn’t “beers” but one beer.

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  • James Penrose

    It’s a start….there will be more until it becomes like buying an airline ticket or a cell phone contract. You won’t know the total cost until you actually buy the product.

  • Tommy

    Such parasitic surcharges are one of the principal reasons I threw away my green-card for America…I found your sneaky greed for the dollar, the only American God,, to be utterly offensive and repulsive. there seems to be no shame nor dignity in gouging extra cash from ones customers. When I enter a bar or restaurant I expect the staff to be paid from the advertised tariff and that necessary profit margin built into the price, as in the rest of the civilized world, but no, in the USA the staff need your extra cash for their very survival.Your obscene tipping system is an affront to common decency. The all pervasive, unrelenting, vulgar hunt for the dollar is nauseating. A bar owner/restaurateur has a duty to pay his staff a living wage, which is reflected in the menu price, it is not for the customer to be feel guilty/mugged for supplements that are not advertised. Having lived there and developing strong friendships with many Americans whom I would love to see more often I just cannot bring myself to face again your paranoid police-state officialdom nor your repulsive tipping culture.

  • michael anisfeld

    Why, in most countries of the world except in the USA the price you see is the price you pay (all taxes and other fees included)? Why cannot our prices be expressed in an all-inclusive manner?

  • DCTA

    Venice is one of the most expensive cities in the world for this kind of thing – keep in mind that everything has to be brought in by boat and that hand carted if there is no water entry to the facility.

    Having said that, I had the outrageous experience of noting a buffet breakfast cost of 55Euro in a Venice hotel back when that would have been $80!!!! (2009?) Thank goodness it was actually included in our rate.

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