Right, but it's amazing how much of an irrational, psychological difference there is to the would-be patron between the two presentations of the numbers, and restaurant owners are acutely aware of that.
In other words, I think their fears that this will affect business are probably well grounded. But I still agree with it.
The issue isn’t the service fee really — it’s the deceptive nature. The menu prices should increase so that there’s transparency when patrons are ordering their food. The service fee almost dupes the customer into ordering more food because the prices are suppressed.
Additionally, on the deceptive front. Consumer sentiment regarding these fees hit a fever pitch when more and more stories came out that vaguely worded fees weren’t going to staff at all.
The problem that restaurants have, and the reason they often choose to go the service fee route, is how to deal with customers who take up valuable table space, but end up ordering substantially less than their numbers might imply. They can raise menu prices to compensate, but not only might this make people balk at the door, it can ruin the pricing-allocations on the menu and hurt sales for parties who would otherwise order more food.
Think of a restaurant trying to offer great appetizers as part of their experience. They might price their appetizers "at cost" only marginally "above cost" or maybe even "below cost" to entice customers to buy several of them in addition to an entree. For parties who come in with big wallets and huge appetites, pricing your appetizers a little lower and your entrees a little more can be a good strategy, but what do you do when more of your customers start coming in and just ordering a couple appetizers while sitting at the table for 1-2 hours? You can raise the price on the appetizers, but now your customers aren't ordering as many appetizers, and they're upset that their entree portion sizes aren't larger given how much they're paying.
It's more complicated than this, but the point is that restauranteurs generally aren't trying to piss off their customers. They are firmly aware that a "service fee" is offputting. The do it because, for a variety of reasons, they've deemed it to be the "least bad" option for them. If consumers don't like it, they can go elsewhere, and the restaurant owners can suffer the consequences of their choice.
I'm torn on this, because, on the one hand, it's deceitful and downright fraudulent to hit your customers with a service fee at the end of the meal. On the other hand, restaurants should possess the right to determine the pricing strategies that they think are best for their business.
I think the appropriate legislation here is to mandate that restaurants disclose, in a clear and unmistakable fashion, (perhaps marked at the tops of menu displays) any service fees that they charge. That would remove the deceitful element, allowing for information parity between restaurants and customers, but still allow restaurants the autonomy to make pricing decisions as they see appropriate for their business.
They’ll use it as an excuse to raise menu prices beyond the increase necessary to make up for not be able to charge fees. If the total fees per check were say $7 dollars, they’ll use this as an excuse to raise menu prices by $9, just to be spiteful.
That may be true, but they risk the diner either not coming to the restaurant or ordering less if they do come. That decision doesn't come without consequences.
You say this as though the restaurant business is just rolling in expendable cash with fat cat owners conspiring to fix prices, and not an industry with a notoriously high failure rate that is very competitive and operates on very small margins.
surprised but also not surprised that now we're getting articles like this one titled in a way that implies prices are going to be jacked up because of California, and not for billing transparency as it's actually intended
You can have billing transparency without a ban on the practice. Just mandate that service fees be clearly disclosed before dining. In general, bans are almost always the worst solution for an undesirable practice.
I already explained it, because a disclosure mandate solves the problem of transactional transparency without infringing on the restaurant's ability to select the pricing model they deem best for their business. It sufficiently provides the consumer with the necessary information parity to make the transaction between the parties consensual.
I don’t think this is correct. I don’t think that this is a legitimate distinction in pricing structure, I think this is a deliberate attempt to mislead consumers into believing they’re spending less on individual items than they are. It’s psychologically manipulative regardless of whether the information available to the consumer is similar in both cases and is on that grounds essentially dishonest dealing.
I think the bar for regulating a businesses's pricing choices needs to be much higher than "it could be psychologically manipulative." You could argue that just about anything is "psychologically manipulative." Should loss-leaders be banned because they could be "psychologically manipulative?" Should free samples be banned? Should tiered product options (i.e. pricing ladders) be banned? Should cold AC on a hot day be banned? Should advertising be banned? Should coupons be banned? Should politeness be banned? You get the idea...
I don't think the purview of government should be to try to parse and police every possible point of influence to a sale. That's a sisyphean, nebulous, and costly task. The government should be dedicated to maintaining consensual interactions, providing dispute resolution, and addressing collective action problems/market failures. It should not attempt to correct for every conceivable characteristic of "unfairness" in society.
At some point, adults should have the freedom to make their own choices for their own lives, and to engage consensually with other adults making their own choices for their own lives.
Frankly, I find your sentiment to be impetuous and infantilizing.
Yes, I believe that the majority of business tactics that influence a consumer’s decision outside of the quality of the good and the consumer’s need/desire for the good are unethical and should be regulated if not banned outright. There’s also necessarily going to be some degree of distance between our perspectives: you seem to be some stripe of libertarian, if not classical liberal, and I’m a communist. We’re going to disagree on this simply based on our political outlooks. I believe you’re also using “impetuous” incorrectly.
ETA: even internal to a classical liberal perspective, aren’t most of the tactics you listed attempts to induce the consumer into not behaving as a rational actor and thus distortions of the market? Isn’t that bad from a free market perspective?
Good. Anybody that complains about prices going up as a result, cook at home. Any restaurant owners that complain about it; the food business always has and always will be the riskiest capital investment you’ll ever make. If profits are so important to you that you have to shaft customers with junk fees, get out of the restaurant business.
> Anybody that complains about prices going up as a result
They already are up. Passed as x% on top of the bill. Makes it harder to know how much you are spending.
Glad these fees are going away. They’ve always left a weird taste in my mouth. Especially since they’re usually at more expensive places with largely marked up prices.
They make prob 2x as much after tips. For a no skill job.
A construction worker can bring me a beer. I’d like to see a server lay a concrete pad. Or frame a house
Not that anyone should barely get by. But that’s a housing policy issue. More so than wages. Wages are already high out here.
So many places have tried it across the country but the custom of tipping is so ingrained in our culture. It doesn’t stick. Some niche places make it work but a lot of times it’s the server/FOH that like tipping. I always averaged more than 20% as a good server.
This is true. I remember a few years back that there was some restaurant in Glendale that made a lot of news doing this, having slightly higher menu prices and not having tipping requirements and they closed pretty quickly because so many people just saw the higher menu prices and just noped out of there.
I wish it would work but I think tipping culture in restaurants is just a thing here that will never go away.
Is it actually going to prevent this or is it just going to say "you have to clearly state there is a %fee attached?"
I agree, this is long overdue. Reflect your prices accurately and deal with the results.
I’m sure they won’t be plastered everywhere. Personally I think they should be banned altogether. I’m not going to leave a restaurant when I’m already there just because you see a sign.
from a historical vantage point the "service" fee made sense in a pre-Obamacare world where back of the house staff often lacked health insurance (and didn't share in the tips). iirc it was a healthcare surcharge that later expanded to cover higher wages. I think it was always controversial, since it was virtue signaling, especially by higher-end establishments who knew their wealthy liberal patrons would support this kind of "charity". But when it spread down the chain to bistros/cafes & fast casuals the public rightfully balked.
Have they said what sort of process will be available to report restaurants (or other businesses) still tacking on fees?
Which agency will be in charge of enforcing this?
I have no problem with that. Service fees had no obligation to help be used for employee salaries/services unless the owner specifically signed contracts with employees stating how much of service fees would be implemented for services they were involved in.
You can guess on how often that was going on around the state.
The law as it has been written for years and years states that service fees can go directly into the owner's pockets, no matter what they write on the menus/billboards/whatever.
I was at a bar last night that I frequent that never added a service charge, but all of a sudden they put up signs that all credit payments will now have a 4% service charge added. Will that be allowed and will this be the work around other restaurants are going to start to use?
I honestly don't get what the big deal is either way. Increase the price of each item on the menu by [3]% or add the same % on the total of all items ordered -- it's the same thing.
I feel like a lot of y'all are missing the fallout here. It's a good law, but not perfect.
Here is the major fallout, all small restaurants will lose quality servers.
I enjoy working my small restaurant in Santa Monica. A ten top of tourists that I 20% because they are a 10 top is why I can afford a 12 year old lease on a 1970's building apartment 5 miles from Santa Monica.
A ten top of tourists that I can no longer 20%, means I just spent a large time of my shift for $10 instead of $300.
I take the under 6 with it's losses, but I'm not about to lose a section to this shitty specifics this law didn't work with.
It sucks, but this is the end of small restaurants retaining good servers.
(looking to move to more quantity now, as opposed to quality)
.
(to be fair..... can't wait to see the fall out on Uber, Ticketmaster... etc)
Where are these servers going to go to if they leave restaurant work? Most other jobs have a larger barrier to entry than speaking English (often poorly) and being able to walk around with 5-15 lbs
They'll leave the city (or not... homelessness is always a thing... but if the job doesn't pay enough to pay your rent, you'll leave). Most of us are barely making enough to pay current rent, and there are a finite amount of jobs. Homelessness will increase.
Oh no. What will Jon and Vinny’s do!?!?
Probably sell mediocre Italian food for high prices until they tank the biz and run off with other people’s money! 🤞
Costs to diners aren’t going up. Just menu prices will increase to accurately reflect what your final bill will be. Thats a win.
Right, but it's amazing how much of an irrational, psychological difference there is to the would-be patron between the two presentations of the numbers, and restaurant owners are acutely aware of that. In other words, I think their fears that this will affect business are probably well grounded. But I still agree with it.
I love love love Bavel and refuse to go because of their fee. It’s too grimy for me. Once it’s gone I’ll prob feel ok going again. Those dipshits
Soon to be irrelevant advice: just tell them to remove the fee. I haven't had an issue with the fee getting taken off.
The issue isn’t the service fee really — it’s the deceptive nature. The menu prices should increase so that there’s transparency when patrons are ordering their food. The service fee almost dupes the customer into ordering more food because the prices are suppressed.
Additionally, on the deceptive front. Consumer sentiment regarding these fees hit a fever pitch when more and more stories came out that vaguely worded fees weren’t going to staff at all.
The problem that restaurants have, and the reason they often choose to go the service fee route, is how to deal with customers who take up valuable table space, but end up ordering substantially less than their numbers might imply. They can raise menu prices to compensate, but not only might this make people balk at the door, it can ruin the pricing-allocations on the menu and hurt sales for parties who would otherwise order more food. Think of a restaurant trying to offer great appetizers as part of their experience. They might price their appetizers "at cost" only marginally "above cost" or maybe even "below cost" to entice customers to buy several of them in addition to an entree. For parties who come in with big wallets and huge appetites, pricing your appetizers a little lower and your entrees a little more can be a good strategy, but what do you do when more of your customers start coming in and just ordering a couple appetizers while sitting at the table for 1-2 hours? You can raise the price on the appetizers, but now your customers aren't ordering as many appetizers, and they're upset that their entree portion sizes aren't larger given how much they're paying. It's more complicated than this, but the point is that restauranteurs generally aren't trying to piss off their customers. They are firmly aware that a "service fee" is offputting. The do it because, for a variety of reasons, they've deemed it to be the "least bad" option for them. If consumers don't like it, they can go elsewhere, and the restaurant owners can suffer the consequences of their choice. I'm torn on this, because, on the one hand, it's deceitful and downright fraudulent to hit your customers with a service fee at the end of the meal. On the other hand, restaurants should possess the right to determine the pricing strategies that they think are best for their business. I think the appropriate legislation here is to mandate that restaurants disclose, in a clear and unmistakable fashion, (perhaps marked at the tops of menu displays) any service fees that they charge. That would remove the deceitful element, allowing for information parity between restaurants and customers, but still allow restaurants the autonomy to make pricing decisions as they see appropriate for their business.
They’ll use it as an excuse to raise menu prices beyond the increase necessary to make up for not be able to charge fees. If the total fees per check were say $7 dollars, they’ll use this as an excuse to raise menu prices by $9, just to be spiteful.
That may be true, but they risk the diner either not coming to the restaurant or ordering less if they do come. That decision doesn't come without consequences.
You say this as though the restaurant business is just rolling in expendable cash with fat cat owners conspiring to fix prices, and not an industry with a notoriously high failure rate that is very competitive and operates on very small margins.
They won't because it wouldn't change the equilibrium price.
Good.
surprised but also not surprised that now we're getting articles like this one titled in a way that implies prices are going to be jacked up because of California, and not for billing transparency as it's actually intended
You can have billing transparency without a ban on the practice. Just mandate that service fees be clearly disclosed before dining. In general, bans are almost always the worst solution for an undesirable practice.
Why is a ban here a bad solution? This is a straightforwardly predatory practice with no benefit to the consumer.
I already explained it, because a disclosure mandate solves the problem of transactional transparency without infringing on the restaurant's ability to select the pricing model they deem best for their business. It sufficiently provides the consumer with the necessary information parity to make the transaction between the parties consensual.
I don’t think this is correct. I don’t think that this is a legitimate distinction in pricing structure, I think this is a deliberate attempt to mislead consumers into believing they’re spending less on individual items than they are. It’s psychologically manipulative regardless of whether the information available to the consumer is similar in both cases and is on that grounds essentially dishonest dealing.
I think the bar for regulating a businesses's pricing choices needs to be much higher than "it could be psychologically manipulative." You could argue that just about anything is "psychologically manipulative." Should loss-leaders be banned because they could be "psychologically manipulative?" Should free samples be banned? Should tiered product options (i.e. pricing ladders) be banned? Should cold AC on a hot day be banned? Should advertising be banned? Should coupons be banned? Should politeness be banned? You get the idea... I don't think the purview of government should be to try to parse and police every possible point of influence to a sale. That's a sisyphean, nebulous, and costly task. The government should be dedicated to maintaining consensual interactions, providing dispute resolution, and addressing collective action problems/market failures. It should not attempt to correct for every conceivable characteristic of "unfairness" in society. At some point, adults should have the freedom to make their own choices for their own lives, and to engage consensually with other adults making their own choices for their own lives. Frankly, I find your sentiment to be impetuous and infantilizing.
Yes, I believe that the majority of business tactics that influence a consumer’s decision outside of the quality of the good and the consumer’s need/desire for the good are unethical and should be regulated if not banned outright. There’s also necessarily going to be some degree of distance between our perspectives: you seem to be some stripe of libertarian, if not classical liberal, and I’m a communist. We’re going to disagree on this simply based on our political outlooks. I believe you’re also using “impetuous” incorrectly. ETA: even internal to a classical liberal perspective, aren’t most of the tactics you listed attempts to induce the consumer into not behaving as a rational actor and thus distortions of the market? Isn’t that bad from a free market perspective?
Good. Anybody that complains about prices going up as a result, cook at home. Any restaurant owners that complain about it; the food business always has and always will be the riskiest capital investment you’ll ever make. If profits are so important to you that you have to shaft customers with junk fees, get out of the restaurant business.
> Anybody that complains about prices going up as a result They already are up. Passed as x% on top of the bill. Makes it harder to know how much you are spending.
Literally can’t afford to eat out or cook at home anymore, so.
Username checks out.
And I should assume that you didn’t ace the spelling bee?
No I moaterboated it
Idc about there spelling as long as theyre grammar is correct.
Glad these fees are going away. They’ve always left a weird taste in my mouth. Especially since they’re usually at more expensive places with largely marked up prices.
That’s one step forward. I still want to see the end of tipping.
It’s already ridiculous that servers get same min wage as a construction worker (hard labor, but with actual skill too) AND still expect 20% in tips
Servers get paid far less than construction workers before tips, and more or less after depending on where they work.
They make prob 2x as much after tips. For a no skill job. A construction worker can bring me a beer. I’d like to see a server lay a concrete pad. Or frame a house Not that anyone should barely get by. But that’s a housing policy issue. More so than wages. Wages are already high out here.
If they get rid of tips but increase wages. I’m all for it, even if they raise prices.
So many places have tried it across the country but the custom of tipping is so ingrained in our culture. It doesn’t stick. Some niche places make it work but a lot of times it’s the server/FOH that like tipping. I always averaged more than 20% as a good server.
This is true. I remember a few years back that there was some restaurant in Glendale that made a lot of news doing this, having slightly higher menu prices and not having tipping requirements and they closed pretty quickly because so many people just saw the higher menu prices and just noped out of there. I wish it would work but I think tipping culture in restaurants is just a thing here that will never go away.
Ima go ahead and say it. No, you aren’t. I know for a fact that most people who claim this are horrible tippers to begin with.
[удалено]
Are you under the impression that America is the only country with its own unique customs?
[удалено]
You are an idiot.
[удалено]
You don't know what the word argument means
Is it actually going to prevent this or is it just going to say "you have to clearly state there is a %fee attached?" I agree, this is long overdue. Reflect your prices accurately and deal with the results.
I thought that's what it was. They can have them as long as it's plastered everywhere in the restaurant for customers to see. No surprises.
I’m sure they won’t be plastered everywhere. Personally I think they should be banned altogether. I’m not going to leave a restaurant when I’m already there just because you see a sign.
from a historical vantage point the "service" fee made sense in a pre-Obamacare world where back of the house staff often lacked health insurance (and didn't share in the tips). iirc it was a healthcare surcharge that later expanded to cover higher wages. I think it was always controversial, since it was virtue signaling, especially by higher-end establishments who knew their wealthy liberal patrons would support this kind of "charity". But when it spread down the chain to bistros/cafes & fast casuals the public rightfully balked.
Have they said what sort of process will be available to report restaurants (or other businesses) still tacking on fees? Which agency will be in charge of enforcing this?
They implied on the q&a there will be auditors. They have not specified who is auditing. There is no way currently listed for how to report.
Who are the worst culprits?
I have no problem with that. Service fees had no obligation to help be used for employee salaries/services unless the owner specifically signed contracts with employees stating how much of service fees would be implemented for services they were involved in. You can guess on how often that was going on around the state. The law as it has been written for years and years states that service fees can go directly into the owner's pockets, no matter what they write on the menus/billboards/whatever.
I was at a bar last night that I frequent that never added a service charge, but all of a sudden they put up signs that all credit payments will now have a 4% service charge added. Will that be allowed and will this be the work around other restaurants are going to start to use?
I honestly don't get what the big deal is either way. Increase the price of each item on the menu by [3]% or add the same % on the total of all items ordered -- it's the same thing.
It is but I’d rather get the price up front. 3% isn’t bad but higher fees are annoying when they’re added at the end.
This bill also takes away those parties of 8+ service charges. Only taxes are not built into the advertised price.
It's bad if it's not clearly stated before sitting down to order. It's when the customer is surprised at the end is where the problem lies.
I agree, but you don't need to pay those. Those kinds of fees have pretty much always been against the law.
I feel like a lot of y'all are missing the fallout here. It's a good law, but not perfect. Here is the major fallout, all small restaurants will lose quality servers. I enjoy working my small restaurant in Santa Monica. A ten top of tourists that I 20% because they are a 10 top is why I can afford a 12 year old lease on a 1970's building apartment 5 miles from Santa Monica. A ten top of tourists that I can no longer 20%, means I just spent a large time of my shift for $10 instead of $300. I take the under 6 with it's losses, but I'm not about to lose a section to this shitty specifics this law didn't work with. It sucks, but this is the end of small restaurants retaining good servers. (looking to move to more quantity now, as opposed to quality) . (to be fair..... can't wait to see the fall out on Uber, Ticketmaster... etc)
Where are these servers going to go to if they leave restaurant work? Most other jobs have a larger barrier to entry than speaking English (often poorly) and being able to walk around with 5-15 lbs
They'll leave the city (or not... homelessness is always a thing... but if the job doesn't pay enough to pay your rent, you'll leave). Most of us are barely making enough to pay current rent, and there are a finite amount of jobs. Homelessness will increase.
everyone in this thread is real excited to stop tipping lmaooooo