Why South Florida restaurants are adding ‘inflation fees’ to checks

Last weekend, Lisa Shaw finished her two-egg breakfast at Ramblewood Diner in Coral Springs and scanned the check for $13.

There, under the coffee, a surcharge she had never seen before: a “temporary inflation tax” of 8%.

“I paid the fees without complaining, just questioned them and gave the regular tip to the waiter,” says Shaw, who spotted six handwritten signs posted at the entrance to the restaurant mentioning the fees. “I understand that inflation is a worrying issue today.”

After posting his receipt on the Sun Sentinel’s Let’s Eat, South Florida Facebook group, a blitz of 1,200 comments alternately called the charges “abusive”, “justified” and “pending litigation”.

In his message, Shaw adopted an empathetic tone. “As consumers, we are affected by the same increases as the restaurant,” she wrote.

Rather than hike menu prices in these times of inflation, more South Florida restaurants are charging customers a fee on bills. Hospitality experts say these surcharges — look for creative labels such as “temporary inflation,” “operations” and “service” — are ways to offset soaring food costs, higher wages in a labor market tense, take-out packaging, overhead and even fuel to transport goods to restaurants.

Restaurants are effectively passing on to customers the same fees that food distributors and owners have been passing on to them since the pandemic, says John Noble Masi, a chef and professor at Florida International University who teaches restaurant management.

“What we are experiencing right now is food and labor – two of the biggest costs – which are increasing dramatically,” Masi says. “The gross cost of food coming in at the door over the last year has gone up about 12.13%. So when you see extras on your bill for a few bucks, that tells me the restaurants are actually conservative in [the fees] they pass on to the guests. They could charge more.

Wholesale food prices rose 13.4% from June 2021 to June 2022, according to data from the federal Bureau of Labor Statistics. The consumer price index indicates that the price of many common ingredients has increased. Compared to a year ago in June 2021, the cost of butter jumped 60.5%, as did eggs (156.1%), whole milk (22%), cheese (21.7% ), processed poultry (21.6%) and fresh vegetables (34.9%). %).

Meanwhile, data from the National Restaurant Association shows that 91% of restaurant owners in the United States say food costs are higher than they were before COVID.

At the Ramblewood Diner, general manager Laura Bertrand now pays $98 for a case of eggs, up from $30 a year ago. Fryer oil is now $50 instead of $12, and paper products are “exploding,” she says. In response, the restaurant added its 8% “temporary inflation fee” on July 9.

“We’re not trying to get rich, we’re trying to keep the doors open,” says Bertrand. “The owner was struggling and that’s why he had to do something.”

Raw materials are not Ramblewood Diner’s biggest expense. Their electric bill jumped $800 this month and water went up $500, she said.

“Our bagel delivery truck adds a $5 fuel surcharge each time it brings the bagels to us,” says Bertrand. “I know a lot of people say, ‘Just raise the menu prices’, but have you seen how thick our menus are? You would have all those costs to reprint the menus every two months.

A surcharge makes it easier for operators to juggle the rapidly changing realities of inflation, Masi adds, but those restaurants have a responsibility to be transparent.

“Which customer likes surprise inflation fees?” Massi said. “If a restaurant is going to say, ‘OK, we’re adding this extra charge,’ it needs to be clear about that charge and whether it’s permanent or temporary.”

Instead of feeling clarity, customer Natali Cohen Webman only felt confusion about her supplement this week at Nakorn Roll & Sushi in Hollywood. She set aside empty trays of sushi rolls, dumplings and shrimp tacos and glanced at her check for $115.91, and there it was: a waiter had crossed out the word “tip.” and scribbled “service” next to a 15% charge that totaled $14.25.

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“I won’t eat there anymore because it’s too much,” Webman says. “I don’t mind that they have to charge a fee, but 15% is insane. Like, excessive. And then you’re expected to leave tips on top of that? »

To weather the punch of COVID and inflation, restaurateur Gary Rack has added a 3% “operating” fee on customer checks for the past two years. Charges appear on the menu and on checks at Rack’s Fish House and Oyster Bar in Delray Beach and at its Farmhouse Kitchen in Delray and Boca Raton.

“This is far from covering our increased costs. And it’s worse now than when the pandemic started,” Rack says, citing cooking oil and take-out containers as his biggest expenses. Which doesn’t help either: A voter-approved state law will raise Florida’s minimum wage to $11 for untipped workers (and $7.98 for tipped workers) after Sept. 30. .

To reduce expenses, restaurants can compromise by getting rid of less popular menu items or switching from choice meats to premium meats, Masi says.

“Maybe you’re serving two ounces less of steak for the same price,” Masi says. “Do this instead of potentially bothering people with inflation fees.”

Rack disagrees.

“I won’t compromise on quality,” he says. “I’d rather absorb the extra costs on my own than raise menu prices.”

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