(WTAJ) — Inflation isn’t the only thing driving up your tab. As restaurant and service industries see shrinking margins, some are charging more service fees to customers.
According to Investopedia, you are charged a service fee as a way for the seller to collect payment for a service or product. Many companies, including restaurants, banks, and hotels, include them at checkout.
When talking about restaurant-related service fees in particular, it’s often a percentage of the total bill that’s tacked on to the total charges. In some cases, it’s a way to ensure staff is paid a gratuity, and customers aren’t required or expected to add a tip on top of the service fee.
But the service fee won’t necessarily go straight to the person who served you.
A good way to think of it is tips for the server or the person that directly did a service for you. Service fees are for the whole business, and there is no guarantee that collected service fees are going to a specific person like a tip would.
How is this affecting me?
Fifteen percent of restaurants are charging customers a service fee, according to a recent study by the National Restaurant Association.
The study, which was obtained by Restaurant Business Online, states that 13% of fast-food places rely on these surcharges. Sit-down establishments are even higher at 17%. Delivery apps are also known for tacking on charges.
This could mean that the $4.99 value menu combo you get from your favorite fast-food restaurant is actually $7 to $9 after these service fees get added.
How can you spot these fees?
Service fees are pretty easy to spot on your receipt. Before paying at a restaurant or ordering through an app, make sure to check the receipt and see what additional things you may be charged with. Common items other than service fees include tax and shipping or delivery fees.
In the photo below, using the online third-party delivery service DoorDash, you can see the service fee and what the company says they are using it for. While a company like DoorDash calculates service fees as a percentage of what you order, other restaurants may opt to just have a flat fee of a few dollars.
Will service fees go away?
Currently, signs point to service fees being here to stay, at least until 2024. In the National Restaurant Association’s findings, 81% of service fee users said they planned to keep them around for at least a year. During the COVID-19 pandemic, restaurants across the country struggled and some may still be feeling the effects.
Even with the return of in-house dining, restaurants have bills to pay and because of inflation, they are higher. This in turn keeps customers having to pay even more for their favorite meals.