If you have dined out anytime in the last year or so, you probably have the same questions that many customers have; what are all these extra fees tacked onto my bill? On a receipt these days, you can find an additional service fee, kitchen fee, an auto gratuity, among others. Sometimes they are worded as such, but they can also be labeled as something completely different, creating even more confusion. Post-pandemic, it has become the norm for restaurants and bars to add these additional line items. Consumers are confused and unsure on how to navigate these fees and what this means for the standard tipping process. As some of our clients have added these new fees as part of their business practices, below is a quick guide on how to navigate the added fees.
*A service charge, also sometimes called an operational fee, is a fixed percentage of the total bill, most often between 10%-20%. It is not a gratuity and does not go to the servers or bartenders, but back to the business itself as it helps to cover their operating costs.
*A kitchen fee is essentially an appreciation fee for the back-of-house employees and it does go directly to the back-of-house employees. Kitchen fees are not legal in all states as chefs are not tipped employees, but you will still see it on some bills, depending on where you reside.
*If you see a line item that indicates ‘gratuity included’, it means that the restaurant has already added the gratuity to the bill total, usually between 15%-20%, and you aren’t required to provide a tip on top of that.
One of the main questions we receive is, “Should I tip on the total which includes these additional fees, or do I tip on the pre-tax amount, minus the service charges?” Unfortunately, the answer is not definitive as these charges are still so new that a standard precedent hasn’t yet been set. For a check that does not include an automatic gratuity, we do believe it is fair to tip on the total amount as the service fee is not something that goes directly to the service staff.
As a reminder, for all 360 Relay shops, a standard tip of 18% is required for all sit-down bar and dining shops, but we do have some clients who require a larger gratuity. The required tip percentage will always be outlined in your shop instructions. If you are unsure of what types of shops require a tip these days, please refer to our previous blog post which outlines our guide to gratuity.
If you are ever in doubt about the proper way to tip on one of your shops, you can reach out to us, or simply do what was acceptable pre-pandemic. As a reminder, these new service charges and fees were not put in place by your servers, bartenders, hairdressers, etc. and so you should not complain to these staff members if you have an issue with it. As always, be professional and courteous, and always thank your customer service staff as they learn to navigate the new normal in the service industry, just as you are.