Is a surcharge for the new minimum wage going too far?
In response to the recent raise in minimum wage, at least one restaurant in Portland has added a surcharge to restaurant tabs. This from the downtown Thirsty Lion menu –
In an effort to offset the rising minimum wage in Oregon, we have opted to add a small service fee, 2 % of the total, to every check. This service fee will allow us to maintain value in our menu prices, pay all our employees a wage they deserve and preserve the level of service we are proud to provide.
To me, these surcharges are nothing more than an excuse to raise prices without having the guts to change the menu prices. Instead, they sneak it into very fine print at the bottom of the menus. In this case, the long Thirsty Lion menu hides it at the bottom in small italic type. I bet most patrons don’t even notice. It’s even worse that this is coming from a large chain that most likely has enough money to absorb the cost. I’m just waiting until one of the restaurants in town with the “health and wellness charge” adds this as another line item. What’s next, a clean tablecloth charge? An employee parking charge? Grow a pair and raise your menu prices if you really can’t afford to pay your employees.
When I was out taking patio pictures, we came across Thirsty Lion, which I had never heard of. When we stopped to snap a photo, the first thing I noticed was the urine smell, the second was a patron being panhandled. Not a place I’m likely to go, but restaurants need to be called out for this kind of sleazy manipulation.
This kind of petty thing just makes me avoid such establishments. It just reminds me you are only paying minimum wage.
Ken Gordon says
Well, while I think you’re right to view this surcharge as you do (we’ve just raised our prices about 2-3% on average, FWIW), I think it’s a little inaccurate and perhaps presumptuous to say that they – or other restaurants – should or could “just absorb the price increase.” When an average restaurant that is profitable makes about 3-5%, increasing wages that – at least in our case – totals around 3% of our gross is not insignificant, to say the least. I’m not saying that the minimum wage shouldn’t increase, but restaurants do need to figure out a way to cope with it, whether it’s raising prices, changing or eliminating tip structures…whatever. If they don’t, or can’t, you’re going to see a lot more restaurant closures in the next few years. When a restaurant starts up with a certain business model, and then at some point you change that model, something has to give.
PDX Food Dude says
I agree, and am not saying they shouldn’t increase prices – I would if I owned a business. My issue is that they hide it in the fine print at the bottom of the menu. I’ll be most people never notice it.
Ken Gordon says
Likely not, nor do they notice minor price increases. Or, at least, the hope is they don’t. I don’t know, I think you’re probably right that it’s a bit of a back alley way of doing it. But consumers have to realize that businesses need to do what they need to do to stay in business. It’s interesting to read sometimes when people level criticisms at businesses for being expensive, not realizing the real costs of running a business. Of all the restaurateurs I know and have known over the years, there are extremely few who I would say are overcharging for their product. Most charge what they really need to charge. Some less.
Restaurants Unlimited Inc. (e.g. Stanford’s, Newport Seafood Grill, Henry’s Tavern, etc.) pulled this deceptive practice last year which is why I don’t dine there: http://katu.com/news/local/new-fee-surprises-some-diners
John C. Bunnell says
Useful to know; I’m not likely to hit the downtown location, but Thirsty Lion also has two outlets here on the west side (Washington Square and Tanasbourne) that I might eventually have dropped into before hearing of this.
The real flip side of this coin is the Burgerville end of the market. I recently happened across some online accounts of the attempts to unionize that shop…and I have to wonder where those behind that effort think Burgerville is going to come up with the $$ for $5 across-the-board wage hikes without pricing itself even farther out of its chosen market than it already is. [This is not a complaint about Burgerville’s prices, which are understandable given their ingredient sourcing practices. It’s simply that dollar for dollar, they’re noticeably more expensive than the major fast food burger chains, and even some of the better locals — Joe’s Burgers, Little Big Burger, etc.]
It’s a shell game. I don’t get to add surcharges to my bills. Just state the price honestly.
johnson john says
Kathryn Conrow says
I went to Thirsty Lion in Washington Square today. I will not be going back as I view any establishment that “hides” fees as dishonest. It was on the menu, which I did not see until after the fact when I looked for it and also was on an index card laying flat on the table, which since it was not in front of my seat I did not see. The thing that really got me is they said it was to keep food prices low. Is it just me or is it not keeping them low (I had to pay for it) it is just keeping them misleading. When I see something so blatantly misleading, I assume that establishment is misleading over all and cannot be trusted. The sad thing is the 2 person lunch was not cheap at $41.67 and an extra $.83 in the food prices would not have bothered me. This simply pissed me off, which then made the $41.67 really wasted because instead of being happy and relaxed after lunch, I was pissed. Never, ever going back.