Places that charge service fees (discussion)

[TheTravellers]

Personally, I think service fees are abhorrent and a bad look. I understand the motivation to charge one, but why not just raise the price of every menu item by $0.10 or $0.25? Pretty transparent, people might not even notice an increase that way.

Went to S&B on 59th and there was a sign up about their 2% fee (enacted sometime between the last time we went in Jan and now), and that might apply to all Happy Plate Concept restaurants, don't know for sure because we don't go to any of their other places (we don't like Sunnyside Diner and S&B is past its prime, so we're pretty much done with them).

[Bill Robertson]

Back when I did a lot of side electrical work I was set up to take Visa/MC. This was quite a few years ago now. But at that time the agreements to accept cards had a clause that said you could't charge any type of fee for using cards. I guess somewhere along the line that changes because a lot of businesses charge fees now.

[Martin]

But at that time the agreements to accept cards had a clause that said you could't charge any type of fee for using cards. I guess somewhere along the line that changes because a lot of businesses charge fees now.

that did change within a few years ago.

[Martin]

why not just raise the price of every menu item by $0.10 or $0.25?

most credit card companies charge more than that in merchant fees. usually, it's a flat transaction fee plus a small percentage of the total amount. for a $20 charge, i think that fee plus percentage is going to be closer to $1.

[mugofbeer]

I will personally avoid anywhere l find charging anything more than a "to-go" type fee. If l see they charge a convenience fee, a service fee, a kitchen fee or a hospitality fee. I had a bar try to charge me an "ice cube" fee without informing me first.

I agree - restaurants should just up the price if they're going to pull this kind of BS.

[Zuplar]

I’d love a list cause I hate when places do that.

[Martin]

I’d love a list cause I hate when places do that.

well, you are in luck since the travellers was kind enough to make this companion thread: Places that charge service fees (list) (okctalk.com)

[Dob Hooligan]

We have a small business that takes credit cards, and the wife got a bee in her bonnet about these “new” fees a year, or two, ago. She sent an email to the Oklahoma Attorney General’s office asking if it was legal. She got a response back stating that during the time Mike Hunter was AG (don’t think that is a focal point, just a time setter) credit card processing banks had requested an opinion regarding the legality of said fees. The response was something along the lines of “not sure they are…not sure they aren’t”. And please note this was an advisory observation, not a legal opinion.

We are of the belief that the large credit card processing banks engaged in a campaign to request these same “squishy” opinions across the country in order to tell their business customers they could add those fees and establish a new “profit center”. Talked to a couple lawyer buddies to see if they would pursue a class action for the interest charges on the service fees. Which would amount to eternal, high interest costs to the average consumer. They agreed with the concept, but didn’t have the energy, connections, or financial base to pursuer it.

[TheTravellers]

most credit card companies charge more than that in merchant fees. usually, it's a flat transaction fee plus a small percentage of the total amount. for a $20 charge, i think that fee plus percentage is going to be closer to $1.

But it seems like if they raised the price of *every* menu item for *everybody* (which would include cash customers, who don't incur a cc company fee), that would probably come close to the fee they're being charged by the cc company? We ordered 5 items, for a total of $28, so if they raised the price of each item by $0.25, that would be $1.25 extra they had, which theoretically would be close to breaking even with the cc company fee?

[TheTravellers]

Apparently Happy Plate concepts implemented the fee based on a recommendation from another local restaurant group who has implemented a similar fee. If anybody knows which group this is, please post to this list - https://www.okctalk.com/showthread.php?t=48231, because I want to avoid them too.

[OkieinGeorgia]

Just pay with cash so you don't have to let your "principles" interfere with your restaurant visitation. I'm not sure how you have the energy to be so stubborn about a couple of bucks. To each their own, I suppose.

[citywokchinesefood]

I have zero affiliation with Happy Plate Concepts outside of I have met and talked to Shannon a few times over the years. I certainly understand being frustrated with the ongoing litany of fees we seem to keep seeing added to our bills these days. Their restaurants do actually guarantee a minimum hourly income for servers and other tipped staff that is substantially above the industry standard. They are a reasonably well-run local hospitality group that actually takes care of their employees. I am assuming that is a part of the reason they adopted the fee. That is the only thing that makes sense to me, but I could certainly be wrong.

[OkieinGeorgia]

But it seems like if they raised the price of *every* menu item for *everybody* (which would include cash customers, who don't incur a cc company fee), that would probably come close to the fee they're being charged by the cc company? We ordered 5 items, for a total of $28, so if they raised the price of each item by $0.25, that would be $1.25 extra they had, which theoretically would be close to breaking even with the cc company fee?

So, you want people that are only paying in cash to also cover your fees? lol.

I think it's pretty simple. Pay with cash or pay for the convenience of not needing cash. It's not that difficult.

[Martin]

But it seems like if they raised the price of *every* menu item for *everybody* (which would include cash customers, who don't incur a cc company fee), that would probably come close to the fee they're being charged by the cc company? We ordered 5 items, for a total of $28, so if they raised the price of each item by $0.25, that would be $1.25 extra they had, which theoretically would be close to breaking even with the cc company fee?

gotcha... in my example, i was thinking one menu item and a drink. i'm definitely not trying to justify passing an additional fee off to customers but was just trying to clarify the merchant fee structure.

[Zuplar]

So, you want people that are only paying in cash to also cover your fees? lol.

I think it's pretty simple. Pay with cash or pay for the convenience of not needing cash. It's not that difficult.

I think it's pretty simple, don't patronize places that charge extra for the most commonly used monetary instrument.

[OkieinGeorgia]

I think it's pretty simple, don't patronize places that charge extra for the most commonly used monetary instrument.

Hey, most of the same people will rattle non stop about prices going up. lol. It's one or the other. This is clearly a way for the restaurants to absorb those fees without just passing them on to all customers by raising prices... a complaint that is surely much more widely held and upsetting. So, what they are actually doing is offering you a choice to have a way to continue to patronize their establishment without paying more. It's a MUCH BETTER option than just continuing to raise prices for everyone so the Karen's don't have to complain about a couple of extra bucks.

[PaddyShack]

At my current place of business, we have started to charge a fee for credit card transactions on our invoices. Now, our invoices usually range in thousands of dollars, so the fees can add up for us. In 2023 alone we paid out around $2.3 million in credit card fees. This year we introduced a new online self-service payment portal where we can capture a fee for credit cards. The regulation is quite tight on this, as there are some states we cannot charge the fee at all, i.e. Maine and Colorado, and others that cap the fee to 3%. We are not allowed to charge the fee on debit cards at all, which our bank also monitors for us when a customer enters the payment details.

Now, I want to know why these restaurants and the State of Oklahoma can charge their credit card fee whenever I use my debit card and get away with it. Do I need to push back on them to not charge me? How do I do that with the State of Oklahoma when paying online?

I am also tired of the extra fees with renewing a tag, Insurance Fee (which I don't get since I show my insurance card for them to lookup), a mail-fee (have no option of picking it up myself, and is more than a current stamp for just a piece of paper and a sticker, maybe don't add the staple?), convenience fee (now I know this is because I am using the online sight, but shouldn't there already be tax dollars paying for the site, why do I need to pay for the service again?), and credit card fee (I understand the state not having to pay fees, but they will charge it if I use a debit card and there is no way of disputing the fee, now I do pay via ACH to avoid the card fee, but still they should not be allow to charge the fees on debit cards).

Okay, my little rant is over. Haha.

[citywokchinesefood]

At my current place of business, we have started to charge a fee for credit card transactions on our invoices. Now, our invoices usually range in thousands of dollars, so the fees can add up for us. In 2023 alone we paid out around $2.3 million in credit card fees. This year we introduced a new online self-service payment portal where we can capture a fee for credit cards. The regulation is quite tight on this, as there are some states we cannot charge the fee at all, i.e. Maine and Colorado, and others that cap the fee to 3%. We are not allowed to charge the fee on debit cards at all, which our bank also monitors for us when a customer enters the payment details.

Now, I want to know why these restaurants and the State of Oklahoma can charge their credit card fee whenever I use my debit card and get away with it. Do I need to push back on them to not charge me? How do I do that with the State of Oklahoma when paying online?

I am also tired of the extra fees with renewing a tag, Insurance Fee (which I don't get since I show my insurance card for them to lookup), a mail-fee (have no option of picking it up myself, and is more than a current stamp for just a piece of paper and a sticker, maybe don't add the staple?), convenience fee (now I know this is because I am using the online sight, but shouldn't there already be tax dollars paying for the site, why do I need to pay for the service again?), and credit card fee (I understand the state not having to pay fees, but they will charge it if I use a debit card and there is no way of disputing the fee, now I do pay via ACH to avoid the card fee, but still they should not be allow to charge the fees on debit cards).

Okay, my little rant is over. Haha.

A service charge in a restaurant is technically different than a credit card transaction fee. It is not a tip, and I believe it is actually subject to sales tax as well, but I could be wrong on that one. Restaurants in Oklahoma cannot legally enforce a gratuity; however, they can enforce a service charge. It is all some legal technical bull****.

[TheTravellers]

So, you want people that are only paying in cash to also cover your fees? lol.

I think it's pretty simple. Pay with cash or pay for the convenience of not needing cash. It's not that difficult.

Some places are charging an extra fee even if you pay with cash, it's not just for credit cards. I haven't been to any of those places, but they apparently do exist. I apparently also haven't been to many other places that charge cc fees either, guess I'm lucky and the restaurants I go to are run by genius operators that have figured out how to cover their costs without charging fees. Never said it was difficult, and yes, I go to all that trouble over my principles - I don't shop at Walmart or affiliated stores, I don't shop from Amazon unless I absolutely have to (if they're truly the sole seller of an item), etc. And ignoring my principles, all the Happy Plate restaurants we've eaten at just aren't that good, in our opinion, so it's an easy decision for us for their restaurants.

[TheTravellers]

At my current place of business, we have started to charge a fee for credit card transactions on our invoices. Now, our invoices usually range in thousands of dollars, so the fees can add up for us. In 2023 alone we paid out around $2.3 million in credit card fees. This year we introduced a new online self-service payment portal where we can capture a fee for credit cards. The regulation is quite tight on this, as there are some states we cannot charge the fee at all, i.e. Maine and Colorado, and others that cap the fee to 3%. We are not allowed to charge the fee on debit cards at all, which our bank also monitors for us when a customer enters the payment details.

Now, I want to know why these restaurants and the State of Oklahoma can charge their credit card fee whenever I use my debit card and get away with it. Do I need to push back on them to not charge me? How do I do that with the State of Oklahoma when paying online?

I am also tired of the extra fees with renewing a tag, Insurance Fee (which I don't get since I show my insurance card for them to lookup), a mail-fee (have no option of picking it up myself, and is more than a current stamp for just a piece of paper and a sticker, maybe don't add the staple?), convenience fee (now I know this is because I am using the online sight, but shouldn't there already be tax dollars paying for the site, why do I need to pay for the service again?), and credit card fee (I understand the state not having to pay fees, but they will charge it if I use a debit card and there is no way of disputing the fee, now I do pay via ACH to avoid the card fee, but still they should not be allow to charge the fees on debit cards).

Okay, my little rant is over. Haha.

Interesting, did not know that about debit cards, thanks for the info (ammo), we use debit cards exclusively at restaurants, have to investigate this....

And yeah, we either renew in person or by mail and write a check for our tags to avoid as many of the fees as we can.

[jerrywall]

I want to put on my grumpy old man hat and join in, because these service fees really piss me off. I'm also not forgiving on places that pass on the credit card fees. I've owned MULTIPLE retail establishments around and every single one the fees were a part of doing business. It's funny, because the whole attraction and reason we were willing to pay the fees is that cash and checks come with their own costs, risks, and time sinks, and cards are much more convenient from a business standpoint. These places are just in their lifecycle where they are trying to extract the most value possible from their existing customers, because they're unable to continue any real natural growth due to their cost cutting and chase for greater and greater profits for the equity bros.

Movie theaters also piss me off with their convenience fees for online tickets. Many theaters (especially AMC) don't even man their box office most of the time anymore. It seems like the only convenience is on their end. They save in labor, but any costs have to be passed on. They're like OG&E.

[bamarsha]

Now, I want to know why these restaurants and the State of Oklahoma can charge their credit card fee whenever I use my debit card and get away with it. Do I need to push back on them to not charge me? How do I do that with the State of Oklahoma when paying online?

I believe this has to do with the way they process debit cards. From my very limited knowledge on the subject, debit cards can be process as either a debit card or credit card. The only reason I know this is the very few times I do pay with debit card, I get asked to if I want to change the payment method. Changing the method to credit prevents me having to enter the PIN (and prevents me getting cash back). Unfortunately, I don't know enough about POS systems to know if they are programmable or what laws may prevent changing payment methods (if any). Maybe someone here will know...

[jerrywall]

But it seems like if they raised the price of *every* menu item for *everybody* (which would include cash customers, who don't incur a cc company fee), that would probably come close to the fee they're being charged by the cc company? We ordered 5 items, for a total of $28, so if they raised the price of each item by $0.25, that would be $1.25 extra they had, which theoretically would be close to breaking even with the cc company fee?

100% this. Your prices should be set to cover your costs to do business. If you can't have prices that do so, and be competitive, your model is broken. Can you imagine passing on a fee for lighting? Maybe an A/C fee on hot days? A toilet paper and water fee for the bathroom? Maybe a dishwashing fee to wash your dishes. Why does the card processing part of the business expenses suddenly deserve special breakouts?

[Jersey Boss]

So, you want people that are only paying in cash to also cover your fees? lol.

I think it's pretty simple. Pay with cash or pay for the convenience of not needing cash. It's not that difficult.

So easy even a caveman could do it.

[Jersey Boss]

Some places are charging an extra fee even if you pay with cash, it's not just for credit cards. I haven't been to any of those places, but they apparently do exist. I apparently also haven't been to many other places that charge cc fees either, guess I'm lucky and the restaurants I go to are run by genius operators that have figured out how to cover their costs without charging fees. Never said it was difficult, and yes, I go to all that trouble over my principles - I don't shop at Walmart or affiliated stores, I don't shop from Amazon unless I absolutely have to (if they're truly the sole seller of an item), etc. And ignoring my principles, all the Happy Plate restaurants we've eaten at just aren't that good, in our opinion, so it's an easy decision for us for their restaurants.

What places are charging extra for using cash? Personal knowledge or just something you heard?