A new California law aimed at banning hidden service charges could eliminate surcharges some restaurants add to customer bills.
Diners in San Francisco often think twice when they see a typical line at the bottom of their menu warning of a mandatory service charge that can range anywhere between 4% to 20%.
While a proposed new law could do away with those notices, customers could also be forced to bear the costs elsewhere.
Food experts like Marcia Gagliardi, author of the 18-year-old food newsletter Tablehopper, say this isn’t good news for customers or the restaurants where they eat.
Gagliardi told CBS, “Just when you thought your pork chop was already expensive, so what? We’re going to see higher prices, because there’s nowhere else that these restaurants can pay these fees and the cost to retain these employees.” Can charge higher wages.” News Bay Area.
The law, which takes effect July 1, bans the junk fees typically seen in ticket sales. But on Tuesday, the state attorney general reportedly confirmed that this also applies to restaurant service charges.
“It’s used to create an equitable model for employees. Servers typically make a lot more money than back-of-house (employees) and dishwashers, so this is a way to distribute those funds more equitably.” Makes way,” Gagliardi explained.
The legislation, co-sponsored by Bay Area Senator Nancy Skinner of Berkeley and Senator Bill Dodd of Napa, seeks to “prohibit the use of drip pricing, a practice in which companies charge only a fraction of what the customer actually pays.” Advertises only one part.” For a certain product or service, according to a release published by Skinner.
“The law does not prohibit companies from setting prices, but it does regulate how companies can advertise or display costs,” the press release said.
Tom Medin has been leading food tourism in San Francisco for decades. He’s watched the city’s restaurant prices fluctuate and says the change may not be entirely bad news, given the focus has shifted back to mom-and-pop restaurants.
“It’s kind of secondary to a restaurant where you go in and you feel like you’re a part of it,” he said of the extra fee. “I want your employees to do a good job. I think as long as restaurants try to really get to know their customers, I think they’ll do OK.”
But some fear the change will make restaurants less fair to workers. Laurie Thomas, director of the Golden Gate Restaurant Association, says restaurants will be left wondering how to maintain payroll while keeping customers from coming in.
“So now do you lower their rate and do you go to the old-fashioned tip model and tell your servers you have to tip the entire house but that reduces everyone’s pay or do you raise your prices? Let’s increase it by 20%, 25%?” she told CBS News Bay Area. “That could please a lot of customers. They can say, ‘We understand why the prices went up.’ Let’s hope that happens. But I don’t know if our industry can expect that to happen, they’re still struggling, it’s been a tough year.”
But for Marcia, she says while customers may feel some relief at not seeing the extra fee, they’ll still feel it in their wallet.
“I’m seeing restaurants easily raise prices by 5%, 15%. It’s going to be difficult,” she explained. “We’re going to see even higher prices based on this unfortunate interpretation but all is not lost… things could change.”
