New Orleans metro restaurants are adding all kinds of fees

The big picture: Service charges gained traction during the pandemic as a way to keep restaurants open, and the practice stuck around, Axios' Hope King writes.

• Nationally, 16% of all restaurants charge extra fees, according to the National Restaurant Association.

Threat level: The charges come amid rising food, rent and labor costs that are spelling disaster for some independently owned restaurants.

• We've seen the evidence around New Orleans for months, as restaurant after restaurant has shuttered, Axios' Chelsea Brasted reports.

Credit card fees are popping up more than ever in the city, with restaurants like Banh Mi Boys, Pizza Domenica and Carreta's Grill saying the menu prices are for cash only.

• An additional fee of 2-4% is added to the guest check to cover what restaurants pay credit card companies for processing. The money goes to the restaurant.
• Peter Nguyen, the owner of Banh Mi Boys in Metairie, estimates he spends $40,000 to $50,000 annually on credit card fees. "That's a whole employee right there," he tells Axios.

Automatic gratuity: The server's tip is automatically added to the restaurant bill pre-tax by the restaurant, usually for 20% or whatever amount is stated on the menu.

• Diners have the option to tip on top of it, but it's not required. The gratuity goes to the server or service staff in the case of tip pooling.
• It's common for restaurants to add for large parties, but some places are adding it for smaller parties. Sun Chong adds it for tables of three.

Service charges, like automatic gratuity, are a flat percentage added to the bill.

• The distinction here is owners have the flexibility to use them however they like, so it doesn't necessarily go to the server.
• Some owners started using them during the pandemic to cover increased staff costs as restaurant workers demanded better pay and benefits.

• "The 18% service charge is applied to paying every team member a meaningful and equitable base wage," reads the explainer about Hungry Eyes' fee. "Tipping beyond that is badass and hugely appreciated."

• Dakar NOLA also uses service charges to cover an $18 minimum wage for for all staffers, plus health and life insurance, co-owner Effie Richardson tells Axios.

Other fees: We've seen appreciation fees popping up too.

• "100% of the kitchen appreciation fee added to your check is distributed to the cooks and dishwashers," reads at note at the bottom of Saba's menu explaining the 4% fee.
• Wakin' Bakin' in Mid-City adds a 3% culinary gratuity that is "tipped directly to the kitchen krewe," the menu reads.
• Toups Meatery has an optional $5 menu item to buy a beer for the kitchen "if you enjoyed your meal."

Bottom line: The restaurant business is tough. If you dine out, support local places, be nice and tip your server well.

Go deeper:

• It's "carnage everywhere" for restaurant owners facing high costs and new rivals.
• Most Americans oppose automatic service charges.

Axios' Chelsea Brasted contributed to this story.