New Hidden Fee Coming Soon to a Restaurant Near You?

Nothing succeeds in the travel industry like a bad idea. The latest hidden mandatory add-on is a “health” charge added to restaurant bills. As far as I know, this scam cropped up first in San Francisco, but you can count on it to spread.

The rationale for this one is to cover the employers’ mandatory contribution to the City’s “Healthy San Francisco” health coverage system. The charge is actually levied on employers, but at least some restaurants are adding a few dollars or percentage points to each customer’s bill to cover this charge.

The restaurants’ excuse for assessing this charge separately is to let customers know how much they’re paying for employees’ health coverage. That’s the same excuse hotels use when they add “resort” or “housekeeping” fees to unsuspecting guests’ room bills. It’s the same excuse airlines would use to exclude fuel surcharges from their advertised fares if the Department of Transportation would allow them. And it’s sheer nonsense. Employees’ health insurance is no less of a cost of doing business than rent, property taxes, food costs, security services, and all the other inputs businesses require to operate. To single out healthcare for a separate surcharge is totally unjustified and unwarranted.

The restaurants adding this fee self-righteously proclaim “It’s not hidden; we print a notice on our menus.” But that, too, is nonsense: Presumably, restaurants could apply that same rationale for extra fees to cover the cost of electricity, heat, or linen service. I haven’t seen any reports yet that San Francisco hotels are adding a similar charge. But hotels aren’t shy about piling on other fees and charges.

So far, I haven’t heard of “health” fees anywhere other than San Francisco. But, as noted, bad ideas travel fast, and I wouldn’t be surprised to see it copied in one form or another by restaurants in other areas.
What can you do to avoid this fee? Presumably, not many of you would feel strongly enough about this minor scam to get up and walk out of a restaurant the minute you saw a notice about such a fee. And you probably wouldn’t feel like making a fuss when you’re paying your bill, either. But when you leave, you can certainly let the restaurant know that you resent this deception and that you won’t be returning.

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I’ve noted before—and you have undoubtedly found out first hand—that hidden mandatory fees have become a bane of travelers and of consumers, generally. The reason seems clear: As more and more of you use the Internet to compare prices, suppliers find it increasingly important to make their first-screen prices look as low as possible. As a result, they’ve taken to carving out part of what should be the true base price and instead adding it in only later—sometimes before you buy, sometimes not until later.

Currently, mandatory extra hotel fees are far more troublesome than restaurant fees. TripAdvisor posts more than 72,000 separate traveler reports of unexpected hotel fees of various types. Although some of those reports obviously cover the same hotels, the number of hotels resorting to this deception has got to be in the thousands—and growing.

Normally, I focus my columns on practical information travelers can actually use, and I avoid taking “there oughta be a law” soapbox positions. But it seems to me that hidden mandatory fees are becoming prevalent enough to warrant some sort of government action. Actually, the Federal Trade Commission has the authority to police deceptive advertising, but in my experience it moves at a glacially slow pace, and even then gives wide latitude to miscreants. What consumers need is some sort of overall national “buyability” standard for advertised prices, along with robust enforcement authority. Certainly, such a requirement is workable; it works pretty well right now for airfares.

What do you think of this new fee at restaurants? Have you ever encountered a hidden fee and how did you handle it? Share your thoughts, experiences, and advice by submitting a comment below!

(Editor’s Note: SmarterTravel is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc.)