Should restaurants be banned from adding service or inflation fees on your bill?

Posted at 5:56 AM, May 14, 2024
and last updated 2024-05-14 09:47:16-04

(WXYZ) — While dining out, you know that you're going to add gratuity, but lately, more restaurants have been adding more fees. Some call it a service fee. Others, a credit card fee, or an inflation charge.

It's a practice happening so frequently in the state of California that lawmakers are putting a stop to it.

The state will soon require that all restaurants bake those costs into the price shown on the menu in an effort toward price transparency.

I went out to Royal Oak, Birmingham and Berkley to talk to community members and a restaurant owner about the potential of something like it here in Michigan.

"The price went up in recent years for sure," Darnell Williamson from Detroit said.

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"They’re up a little bit. Not ridiculously in my opinion," Kirk Pesta from Clarkston added.

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"Definitely seems like more and a lot of gratuity is automatically added now," Whitney Balkany from Hazel Park said. "I feel like they’re taking it from the wrong group of people. I feel like they should be negotiating better prices maybe from their suppliers instead of passing it on to the consumers. I don’t feel like we should be bearing the brunt of that."

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"When I see gratuity charges on my bill, it makes me less likely to tip because they’re taking so much of a percentage out for the gratuity. So I just tip a little less," Williamson added.

"I’d rather them just bake it into the cost of the food like they’ve always done," Pesta said.

However, some others say the fees are reasonable.

"I’ve noticed things have went up, but I do understand that in order to stay in business and to attract more customers, you gotta have that balance where you’re going to have to pay a little more if you want to continue to go to your favorite restaurants because they have to pay for supply overhead and most of all labor costs," Bryant Watkins said.

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The Michigan Restaurant and Lodging Association said 89% of restaurant owners in our state report dealing with inflation in the last year. The MRLA said most operators are seeing 5-10% inflation but some as high as 20%.

"I think a universal truth about anybody in the restaurant business is that they’re born to pivot, to adapt, to find a way through the fire and we’re no different," Curt Catallo, the co-owner of Union Joints, said.

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Catallo has been in the restaurant business for nearly 30 years, co-owning spots like Union Assembly and Mom's Spaghetti in Detroit, and Vinsetta Garage in Berkley.

He said no matter how small, additional fees can be a tough sell for many customers in this market, but he believes slightly elevated prices are something we'll have to get used to.

"I think you have to be transparent with your pricing and we’ve never been a place to throw in surcharges and we won’t. We want to be straight forward about it. People understand our crew is making more money now because they have to. They’re buying the same gas and the same eggs. It’s just the cost of living," he said. "I don’t think we’re going to get back to the days of pre-pandemic (pricing) but we’re definitely much better than we were during the pandemic."

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