3 Hidden Restaurant Costs and How to Manage Them to Your Financial Advantage


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Have you recently noticed an increase in the prices of restaurant meals and takeout? The recent Consumer Price Index report showed that “out-of-home food” – which includes take-out, full-service meals and food served at employee sites and at school – has increased by 7.2% over the past 12 months. Full-service meals alone rose 8.7%, its highest jump since 1997.

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A number of factors are driving up restaurant costs, including food and fuel prices, and ongoing supply chain challenges. With these economic factors capturing most of your attention, you may have overlooked some hidden dining and takeout costs that have become more common since the pandemic.

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1. Credit card surcharges and/or cash back

Rules on restaurants imposing credit card surcharges or incentivizing cash purchases through rebates vary by state. According to Merchant Maverick, currently only two states (Connecticut and Massachusetts) plus Puerto Rico explicitly prohibit credit card surcharges. A handful of other states have anti-overload laws on the books but are unenforceable based on recent court rulings.

Businesses in all states are allowed to offer cash back to customers who choose to pay by cash, debit card, or paper check. This discount is usually the same amount as the credit card fee. But rather than adding money to the bill to pay by credit card, companies offer a discount for paying cash.

Whatever form it takes, these companies shift the burden of credit card processing fees onto the customer. But some customers don’t have it.

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“I personally won’t patronize companies that do this,” said Ronkonkoma, New York communications consultant Chris Palermo. New York is one of the states where it is technically illegal to apply credit card surcharges, but largely unenforceable. Palermo noted that if he eats out of state, where credit card surcharges are legal, he tries to find restaurants that don’t charge such fees, or he makes it a point to pay cash and d to avoid additional charges.

Likewise, Cliff Lundin, a lawyer in Hopatcong, NJ, changed his ways once his favorite pizza place started charging a 10% surcharge on all credit card orders. “They have an online coupon for 20% off if you print it out and use it for takeout. Since they added the supplement, I started using the coupon even though I never used it in the past.”

For many, however, the accusations seem fully justified. Wes Morrell, owner of The Alternative Sport paintball field in Blountville, TN, said he usually pays cash, anyway, but wouldn’t mind credit card surcharges if he decided to pay by card. . “Being very small business minded, I don’t mind the fees at all if I know it’s going to help them put more money in their pockets. After all, that’s why we do it, to support our families and grow our business.

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What matters is that consumers understand the fees in any place of business and make informed decisions. For some, the convenience of using a credit card outweighs the expense. And if you have a card that issues rewards, the surcharges can be offset by the cash back you receive. You can also, as Lundin did, look for coupons or other savings opportunities while enjoying the convenience of paying by credit card.

2. Suggested tips for takeout and delivery

In addition to imposing credit card surcharges, more and more companies have “suggested” tipping at the point of sale when people pay by credit card through an iPad terminal or even at the tables when customers pay. via the tabletop kiosk. Often the table kiosk presets the tip amount at 15% or 20%, so if you want to tip more (or less) you’ll need to adjust it.

Suggested tips are appearing on screens nationwide, and many consumers are feeling the pressure they feel to tip for services they haven’t had in the past, including fast food orders. take away. “I have the ‘opportunity’ to tip any service that accepts a credit card and virtually every suggested tip starts at 20%,” said San Antonio long-term care volunteer Julie Paulson. TX.

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She mentioned that often workers hover over the screen waiting for you to choose the tip amount and process the transaction. This can encourage customers to tip a certain amount or rush the transaction regardless of how much they are paying.

“It happens in restaurants, especially when it’s busy and the servers want to close and move on,” Paulson said. “They swipe your card and hover until you’re done. It’s embarrassing, and you have little time to think, [so] you check the 20% option because it’s fast.

Rather than feeling obligated to tip more than you think the staff deserve – or more than you can afford – take a breather and don’t rush. You can feel good about the 20%, or you can choose to adjust the amount.

3. Tips added

Restaurants often add tips to the bills for large groups, usually groups of six or more. But some resorts and restaurants may add tips for parties of any size.

“I don’t like it when they do it,” said Steven Futoran, financial services salesman and self-proclaimed “foodie” from Alpharetta, GA. “I understand why they do it for the biggest parties, but it should always be up to the customers. What if the service isn’t great and you don’t want to tip that much? »

Extra tips can actually mean less money for servers, regardless of the level of service. Some customers may be inclined to tip more than the standard 18% or 20% if the tip was not already included in the bill.

“If a restaurant adds the tip to my bill, that’s what they get. If they had left it up to me, about 80% of the time I would have tipped more,” said Rick Komendera, a consumer electronics industry executive in Austin, Texas. . “However, if they take the choice away from me, they get what they asked for and nothing more. I understand why they are doing it, but it really pisses me off.

If more people tip generously like Komendera, chances are restaurants won’t feel obligated to add tips to the bill. But for servers, automatic tips can significantly increase their salary and allow them to survive on less than the minimum wage.

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“As a waitress, I’d like to see a tip added to every check,” said Jennifer Saunders, a waitress and mother of three from Coram, NY. “It’s true, not all services are great, but not all customers are great either. We work very hard and it’s very disappointing to go above and beyond to make people’s dining experience happy, only to be shorted or not tipped at all.”

Spend wisely when dining out

Whether you choose to follow directions on the iPad, accept automatic tipping, or tolerate credit card surcharges, it’s all about being informed. Carefully review your restaurant check or take-out receipt to make sure it’s accurate and know exactly what you’re paying for. By avoiding excess fees and charges, you may be able to stretch your food budget a little further.

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About the Author

Dawn Allcot is a full-time freelance writer and content marketer with interests in finance, e-commerce, technology, and real estate. His long list of publishing credits includes Bankrate, Lending Tree and Chase Bank. She is the founder and owner of GeekTravelGuide.net, a travel, technology and entertainment website. She lives in Long Island, New York, with a veritable menagerie that includes 2 cats, a rambunctious kitten and three lizards of different sizes and personalities – plus her two children and her husband. Find her on Twitter, @DawnAllcot.

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