"Lately, though, customers have been spotting a more mysterious charge on their bills: The one-two punch of more money required and a lack of clarity on why has frustrated many. The charge tends to hover around 5% of any check total, - though can soar as high as 20% - and may appear on your receipt as "service fee," "retention fee," "labor surcharge," or something similar."
"These "service fees," on the other hand, are a guaranteed bump for restaurateurs to keep up with rising labor costs and ensure fair wages for their staff. Restaurant operators are struggling with the climbing costs of just about everything, from food to rent, but are often hesitant to raise menu prices in fear of scaring away customers - for some, this fee seems like a somewhat of a solution."
Many restaurants have begun adding ambiguous additional charges labeled 'service fee,' 'retention fee,' 'labor surcharge,' or similar, typically around 5% but sometimes up to 20% of the check. These fees are charged on top of customary tips and are intended to offset rising labor costs and provide fairer wages without increasing menu prices. The practice appears at large chains and independent eateries alike. Consumers often find the fees confusing and feel blindsided due to unclear labeling and lack of disclosure. Operators cite minimum wage increases, staff retention pressures, and broader cost inflation as reasons for adopting the fees.
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