restaurant administrative fees backlash, Digi Mart USA News (Denver, Colorado): A diner is calling out a restaurant chain over an administrative fee added to his bill, renewing debate over the extra charges that have become increasingly common at restaurants.
The diner visited an Earls Kitchen + Bar in Denver, ordering a $24.75 burger and upgrading to truffle fries for $3, according to a receipt shared on Reddit. In addition to $2.28 in taxes, the bill included an 83-cent “Admin Fee” equal to 3% of the food and beverage subtotal, bringing the total to $30.86 before tip.
“What the h— is even an ‘admin fee’?” the person wrote in the post. “Can a guy even enjoy a burger without being harassed and extorted in this God-forsaken place?
This pissed me off. … No tip for you!”
Other Reddit users similarly questioned the charge, with some saying administrative fees would cause them to reduce or eliminate their tips. Fox News Digital reached out to the Reddit user and Earls for comment.
The controversy comes as restaurants across the country grapple with how to pass along higher costs without alienating increasingly price-conscious customers. Some operators have turned to administrative, service or operations fees rather than incorporating the additional costs into menu prices, a practice that has generated pushback when diners encounter another charge on the final bill.
In Florida, restaurants have faced new requirements since July 1 aimed at making those charges more transparent. Under the law, restaurants imposing an “operations charge” must disclose the amount or percentage and its purpose before a customer orders.
The law does not prohibit the fees, but some restaurant owners say the better approach is to skip the fees altogether.
Vicki Parmelee, owner of Jumby Bay Island Grill in Jupiter, Florida, told Fox News Digital that she prefers incorporating rising expenses into menu prices rather than surprising customers with another charge at the end of a meal. “I believe in being transparent and giving the customer a choice,” Parmelee said.
“I prefer raising the menu prices to reflect real costs and then offering a clear cash or debit discount over adding an ‘admin,’ ‘service’ or processing fee that may come as a complete surprise after your meal. People see that as a gotcha, and that last impression is what they remember and share online.”
Other restaurant operators appear to be reconsidering the practice. Florida-based Duffy’s Sports Grill previously charged a 3% operations fee.
An October state restaurant inspection report for a West Palm Beach location noted the fee and cited the establishment because, while the charge and its purpose were disclosed on the menu, it did not appear properly on the customer’s receipt. Duffy’s has since announced that it has ended the fee.
Fox News Digital reached out to Duffy’s for comment.
Restaurant customers have taken to social media in several states to complain about similarly labeled charges, while operators have defended them as necessary to combat rising expenses without increasing menu prices. Parmelee said restaurants may turn to additional fees because of financial pressures.
“Restaurant margins are thin,” she said. “Many places have tried an added fee because it feels like the most direct way to offset card costs.
The problem is customer reaction, especially when the fee appears only on the final bill.”
Parmelee also said the charges could have an unintended consequence for restaurant employees. “In my experience, if a restaurant adds an unexpected fee at the end of the meal, people feel nickel-and-dimed and tip less,” she said.
Restaurants that do impose fees should make them clear before customers order, she said. “Guests deserve to understand why the price is what it is and what their choices are.
When it’s hidden or comes as a surprise, they don’t.”
