As restaurants add various service fees to checks, either for supply-chain price increases or to defray employee expenses, operators increasingly face customer pushback.
The District of Columbia attorney general, Brian Schwalb, on Wednesday issued a supplemental advisory restaurant-fee disclosure requirements in the District of Columbia.
Schwalb’s office offered examples of service fee disclosures that are compliant and noncompliant with the district’s consumer protection laws.
The office “issued guidance specific to the restaurant industry because of recent consumer concerns about restaurant fees, especially ‘service’ fees and charges,” the agency said.
Service charges and fees have been a topic of discussion since the phased elimination of the tip credit in the District last November.
The attorney general’s office on Wednesday said it has noted an increase in complaints and confusion among consumers.
District restaurants can charge service fees or other surcharges but need to be timely, prominently, and clearly disclosed to diners before they place their orders, the office said.
“Diners have expressed concern about being surprised by unexpected fees and surcharges, including service fees, at the end of their meals,” the advisory noted. “Diners have also expressed confusion about how restaurants are using service fees, especially whether restaurant distribute the fees as tips to servers or retain the fees to cover operational expenses (including employees’ base wages).”
Under the Consumer Protection Procedures Act, the office said, restaurants must timely, prominently, and accurately disclose all mandatory fees. And while the CPPA does not prohibit adding fees to bills, restaurants must explain fees that are vaguely labeled and likely to confuse consumers.
“A good rule of thumb for restaurants is to communicate service fee information in the same manner that they communicate their prices,” the attorney general’s office noted.
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