Richmond restaurants are adding all kinds of fees — here's what they mean
Service charges, automatic gratuity, a fee for using a credit card and an extra buck or two for takeout — across the city, restaurants are increasingly adding fees, but for consumers, understanding them is a different matter.
What's happening: Some local restaurant owners are adding fees to offset the ever-increasing cost of running a restaurant, despite the fact that consumers overwhelmingly don't like them.
"It's all survival mode. Every fee you see is a restaurant in survival mode," Jake Crocker, who closed his restaurant, Lady N'Awlins, in September after 16 years in business, tells Axios.
There are no hard numbers on how many restaurants have added fees, but industry experts say they're on the rise and will likely continue, Vox reported last month.
- And in Richmond, gripes about them on social media seem to pepper every dining thread.
But not all fees are equal — and few, if any, restaurants have explained to consumers what the fees mean and who gets the money.
Automatic gratuity is the one most consumers are probably most familiar with: 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.
Service charges, like automatic gratuity, are a flat percentage added to the bill and usually 20%, but the distinction here is in the language used — and that owners have the flexibility to use them however they like, so it doesn't necessarily go to the server.
- It's best to ask the server how much they get and tip accordingly.
Credit card fees are the around 3% credit card companies charge the restaurant for anyone using a credit card — just passed straight along to the consumer. That money goes to the restaurant.
Takeout fees also go to the restaurant and are usually around $1 or $2 to offset the cost of the box, bag and whatever else to wrap the food to go.
The bottom line: Customers are paying these fees no matter what, Crocker tells Axios. It's just a matter of whether some choose to itemize them out or not in the bill.
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