surcharges

Are restaurant surcharges a growing trend?

As restaurants continue to look for creative ways to get ahead in today’s economy, some operators are adding surcharges to the bill. While many diners balked at rising tipflation earlier this year, surcharges may be easier to swallow, as the industry starts to make changes for the better.

Typically, the surcharges look like a line item of three to five per cent of the cheque total listed at the bottom of the bill. Rather than this revenue going to the servers, restaurateurs would be able to use this income to provide health benefits, cover additional expenses, or raise wages for their employees.

According to reports, 15 per cent of restaurants have added surcharges to their billing so far this year, and it’s expected that more will follow. With such a thin margin, many restaurants are finding it hard to recoup the costs of inflation, increased credit card swipe fees, and supply chain delays, and some experts are expecting the surcharge trend to become a permanent fixture. “The typical restaurant business is not set up to deal with this sustained and accelerated cost of food and labour, which is putting extraordinary pressure on operators, and indications are that these will continue,” says Hudson Riehle, senior vice president of research at the National Restaurant Association.

There are differing opinions on this subject, however, with some experts suggesting that this isn’t the way to go. “Surcharges rub people the wrong way,” says Ted Rossman, senior industry analyst at Bankrate. “On the face of it, many people believe in these causes, but they don’t like the line item. People want to pay one price.”

Transparency is key for restaurants that want support from their customers, so explaining and being open about the additional fees and what they cover will help diners understand why the cheque total has jumped. Restaurants with specific descriptions like “fuel surcharge” or “kitchen appreciation,” may fare better when customers don’t feel like they are in the dark.

As restaurants continue to try and recover from the last few years and make up some of their lost revenue, surcharges may be the way to go. Going forward, this could be a step toward the industry’s road to improvement with better benefits for workers and improved working conditions.