Dining Out? Here's What That Surcharge On Your Bill Is Really For

Especially in economically uncertain times like these, you understandably want to have full knowledge of everything you're getting charged for in every situation — not least of all dining out. You know you'll pay for the food itself, tax, and tip. Lately, though, customers have been spotting a more mysterious charge on their bills: The one-two punch of more money required and a lack of clarity on why has frustrated many. 

The charge tends to hover around 5% of any check total, – though can soar as high as 20% — and may appear on your receipt as "service fee," "retention fee," "labor surcharge," or something similar. Consumers are finding it at some of the country's most influential chain restaurants from Dunkin' to Panda Express, and it's popping up at independent eateries, too. "Service fee" is one of the more common labels, which can be confusing: Isn't that what a tip is for? 

In reality, this fee is in addition to gratuity. While 20% to 25% is standard fare nowadays, tipping remains at the discretion of the guest. These "service fees," on the other hand, are a guaranteed bump for restaurateurs to keep up with rising labor costs and ensure fair wages for their staff. Restaurant operators are struggling with the climbing costs of just about everything, from food to rent, but are often hesitant to raise menu prices in fear of scaring away customers — for some, this fee seems like a somewhat of a solution.

Minimum wage increases and individual eateries' efforts to retain quality staff have made it hard for many restaurants to keep up financially. While it's hard to imagine the average diner would argue against better worker conditions, many do have a bone to pick with the seemingly cagey way restaurants are going about keeping up. While more expensive dishes would still be an increase, at least it's a clear, honest increase. Many wonder how they can even be sure "service fees" actually benefit staff. While its own controversy, tipping at restaurants is at least a system we're familiar with. With a "service fee" slapped onto a check, though, there's no transparency: Is that also actually going right to staff? 

As discussed on a Los Angeles Reddit thread tracking restaurants charging these fees, there's no way to be sure your server benefits from these fees in the way restaurateurs explain that they, in theory, would. One Redditor says they worked at a restaurant that "charges 5% on every check for 'increased cost of wages and benefits' — NOT ONE server I have ever worked with in the 5 years I was there received health insurance." 

There's been an ongoing fight to ban these fees; so far, the Federal Trade Commission has officially excluded them from "junk fees" that are indeed now forbidden on restaurant checks. For now, if you're concerned, call ahead and ask if a restaurant charges them so you can plan accordingly. The one thing restaurant patrons shouldn't be afraid of doing is asking questions.