Restaurant Service Fee: How Common Are They?

‘That’s why I love Japan! No tips, better food and great prices.’

A California-based man is calling out a Petaluma restaurant’s tipping practices after noticing the restaurant implemented a mandatory service fee.

On March 6, @techiesc2 posted a TikTok about a local restaurant, BiJou, which recently implemented a 5% service charge. “The question is, why aren’t you paying your workers more to begin with?” he asks of restaurants generally. “And why is it the responsibility of customers to tip more to pay wages?”

Why Did This Particular Restaurant Stand Out?

While recounting a recent trip to Petaluma, he came across coverage of another nearby restaurant that advertises relatively affordable brunch prices, which included a $16 eggs Benedict.

The TikToker mentioned that the restaurant recently drew criticism in a Reddit thread he found for reportedly adding a 5% service charge intended to help fund employee wages. “Why isn’t the dish $16.80 or $17?” he reads from the Reddit thread. “Why surprise us at the end with the extra fee?”

He said diners already expect to pay higher prices for brunch in Northern California, and he’d rather see restaurants raise menu prices upfront instead of adding additional charges later on the receipt.

“I’m willing to pay the price that you put on your menu,” he says. “But if you lure me in with a certain price and then say, ‘Hey, we gotta pay our workers, so we’re tacking on 5% to your bill,’ no. Just no.”

Overwhelmingly, the comments echoed the TikToker’s frustration with the mandatory service fee. “If you can’t afford to pay employees a fair, livable wage, you don’t have a viable business model,” wrote one user. 

“Extra charges like that are SOOO tacky!!” added another. 

“I’m not willing to pay extra for anything unless it’s worth it,” wrote a third. “I’m tipping based on the service, not the price of the meal. Further, I am the customer, I should not be directly tied to any operating expense unless I’m getting ownership and I can see the books.”

How Common Are Service Fees at Restaurants?

Mandatory service fees like the one the TikToker described have become increasingly common in the restaurant industry in recent years. Traditionally, automatic charges were mostly reserved for large parties, but many restaurants have begun applying service fees to all customers regardless of party size since the COVID-19 pandemic.

In fact, the practice is widespread enough that a 2023 report by the National Restaurant Association noted that roughly 15% of U.S. restaurants now add some type of surcharge or service fee to customer bills. 

Why Are More Restaurants Implementing Service Fees?

On the lower end, these fees might show up as small surcharges of around 3% to 5%, labeled as “employee benefits,” “kitchen appreciation,” or “living wage.” However, these fees can also manifest as larger automatic service charges of 18% or more that function similarly to a built-in gratuity.

Restaurant owners say that rising operating costs are driving this shift. Higher minimum wages, more expensive ingredients, and increasing rent and insurance costs have squeezed already thin profit margins. Service charges can help restaurants fund wages, employee benefits, and pay increases for kitchen staff, who historically earn less than front-of-house workers who receive tips.

However, the model remains controversial with diners. A survey from the Pew Research Center shows a strong public backlash to the practice, with about 72% of U.S. adults opposing restaurants automatically adding service charges to bills. 

AllHipHop reached out to @techiesc2 for comment via TikTok direct message and comment and to BiJou via email. We will update this story if either party responds.

@techiesc2 Stop hiding fees and just put the prices on the menu!!! #petaluma #foodie #tourism #bijou #bayarea ♬ original sound – TechieSC

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