The National Restaurant Association and the Restaurant Law Center are urging the Federal Trade Commission (FTC) to exclude the restaurant industry from a proposed rule that would prohibit businesses from adding fees or surcharges to customers’ bills.
In comments submitted to the agency, the National Restaurant Association and Law Center said the blanket prohibition on “hidden” and “misleading” fees as applied to the restaurant industry is “unwarranted, unlawful and would create significant unintended consequences for consumers.”
“While the National Restaurant Association and the Restaurant Law Center appreciate the commission’s aim to provide increased price transparency for consumers, this proposed rule ultimately fails to achieve this objective in the restaurant industry,” said Brennan Duckett, director of technology and innovation policy for the National Restaurant Association. “A one-size-fits-all prohibition on common restaurant charges is both unworkable and unlawful, and we therefore have urged the commission to exclude the industry from any final rule of similar nature and scope.”
By eliminating surcharges, restaurants would be forced to include service fees, credit card surcharges and delivery fees in menu pricing, which the association said would result in less transparency as operators would have to hide from consumers the costs of the services they value in the restaurant experience. Additionally, requiring restaurants to move toward all-in pricing across a menu would create an unfair payment structure where diners are paying for services, such as delivery, that they aren’t necessarily receiving.
“The FTC’s proposed ‘junk fees’ rule will unleash nothing but chaos and confusion for restaurant owners and diners alike,” said Sean Kennedy, the National Restaurant Association’s executive vice president for public affairs. “Restaurant customers understand that they will pay extra if they are having food delivered or are dining with a large party. Fees for these services aren’t ‘junk fees’ – they reflect the higher costs that a restaurant is taking on to make a customer’s experience even more convenient.”
As an alternative to the proposed junk fees rule, the National Restaurant Association and Law Center said they were willing to work with the FTC to establish a transparency test for potential fees or surcharges. This test would set notice and disclosure requirements for the fees and surcharges necessary for restaurant businesses to remain viable.