Factor card fees into prices
Given that more than eight out of 10 restaurant checks are paid by card, not cash, this seems obvious, so I’ll get it out of the way immediately:
Processing fees for such transactions should be built into all menu prices.
If a business wants to thank customers who use cash and encourage others to do so, put a note at the bottom of the menu saying cash transactions will receive a discount of, for example, 3 percent or 4 percent. Yes, the server will have to refigure the bill if the customer doesn’t mention in advance that they won’t be using a card, but that should be a quick adjustment.
Do not pretend as if most sales are still in cash and then charge extra for card payments. First, it’s disingenuous if not outright deceptive. Second, most restaurants get it wrong.
New York law is very clear: It is insufficient to say at the bottom of the menu or in a sign on the door that an extra charge, either as a flat fee or, more commonly, a percentage of the total, will be added to the final bill for credit-card sales. Gas stations for years have shown two prices at the pump: cash and card. According to state law, the same applies to restaurants too, meaning a menu would need to say, for example: “Mozzarella sticks: $9 cash, $9.36 credit.” For every item. Oy. Sounds like a graphic designer’s nightmare.
However, and this seems puzzling, a menu note or a sign informing of an extra fee applying to debit-card sales is sufficient to satisfy the law. It doesn’t need to be per item.
Surcharges added at the register or otherwise without prior notice, for credit or debit, are never permissible. Discounts for paying in cash are always allowed.
The state Division of Consumer Protection has a helpful scenarios chart on its website, dos.ny.gov/consumer-protection, from December of 2020.
Further complicating matters, when it comes to determining how much such surcharges should be, is the fact that the fees processing companies are allowed to charge businesses are lower for debit (about 0.05 percent to 0.8 percent) than credit (about 1.3 percent to 3.5 percent).
As restaurant expenses continue to rise as a result of higher staffing costs from a tight labor market and soaring food prices (Market 32’s lobster rolls, long $19.99, are now $30, for ex
ample), restaurants are trying to avoid jacking up menu prices by offsetting them elsewhere, including by passing along card-processing fees to consumers.
I’ve received more complaints from customers about this in recent months than I have in the nearly 16 years I’ve been writing Table Hopping, suggesting it’s happening at a lot more places.
And, as I said, almost everywhere is doing it wrong. I’ve never seen a menu locally that listed cash and creditcard prices side by side. (If you encounter one, snap a photo with your phone and email it to sbarnes@timesunion.com.)
Now, standing up for your rights as a consumer takes fortitude and perseverance. You have to be willing to potentially be seen as, to put it mildly, a disagreeable person. Restaurant staff may well argue, because they’re just doing what they’re been told and want you to leave so they can serve another table.
Management and owners may well argue, too, because they know how much such fees cost them. When I last asked proprietors about this, Bob Lee, of The Wishing Well in Wilton and The Brook Tavern in Saratoga Springs, told me he paid a combined $100,000 annually in fees for the two restaurants in 2018; it was $126,000 for the same year at 677 Prime in Albany, and well more than $50,000 for dp/yono’s in Albany.
Whether you insist on proper business practices on the spot, as opposed to an email afterward, depends on the tolerance that you, and your companions, have for a showdown.
It’s the same with so-called “mandatory” tips. They’re not actually mandatory, even if it’s printed on the menu. A tip is always voluntary. Unless there’s a signed advance contract spelling out an extra charge for service, such as for a banquet or other private event, you can’t be compelled to tip. The restaurant may try to have you arrested, as has happened, but you’ll win in court, of it ever gets that far. Most likely the cops will show up, roll their eyes and tell you to get on with your lives while they handle actual problems.
But back to card surcharges. They’re bad for customer relations. People feel surprised and gouged. Point-ofsale systems can be programmed to accommodate virtually every imaginable scenario. And accounting software can tell operators how much they spend annually on fees for accepting credit and debit cards.
So restaurants should figure those costs into menu prices. Add a “Cash discount” button to registers. Let customers know on the menu that they’ll be getting 3 percent back if they use cash.
Most still will hand over cards. But they’ll be far less apt to argue over paying 3 percent more for meals, which they probably won’t even notice, than they will over seeing a card surcharge on their check.