Did you ever look at your phone/mobile monthly bill? There are all kinds of charges that are often listed that are beyond the charges you’d expect for various communications services. And am not talking about “cramming charges.” Those are the charges that your telephone company allow 3rd party vendors to charge to your phone bill. Charges that are explained on your telephone bill in general terms such as “service fee,” “service charge,” “other fees,” “voicemail,” “mail server,” “calling plan” and “membership.” Charges you may have authorized or not. But there is also the regular recurring and often regulatory charges:

• 911: There’s no mystery here – this fee is used to fund access to emergency services in your area.
• Universal Service Fund: The federal government requires carriers to pay a percentage of their revenue into the USF, which helps provide rural and low-income communications services. Carriers are not required to pass this cost along to their customers, but they might do it anyway.
• State Telecommunications Excise Surcharge: This fee may also be called Gross Receipts Tax Surcharge or similar. This is how they recover state and local taxes they owe to the government.
• Regulatory Charge: Despite the name, this is not a mandated charge. It’s a way for wireless providers to mitigate their own costs of complying with government regulations.
• Administrative Charge: Carriers charge an administrative fee to cover costs like maintenance and interconnection
• State and Local Taxes: Each state, county, and city imposes its own taxes on wireless service. You will pay the relevant taxes in your location.

What does this have to do with restaurants? Priya Krishna of the NY TImes reports an increasing number of restaurants, from fast-food chains to fine-dining destinations, have added service charges of 15 to 20 percent, and sometimes more. But they are not tips. They are  surcharges meant to help shore up a restaurant industry that has long run on slim profit margins and now faces a host of challenges, including inflation, labor shortages and an expectation — or mandate, in rising minimum wages — that workers get better wages and benefits.

Krishna reports that restaurants found themselves in a bind. They wanted to pay their workers more, but believed that customers wouldn’t accept higher menu prices, even as food costs rise. They didn’t want to continue depending on tipping, which they think is unreliable and inequitable, as nontipped workers are prohibited by law to share in the money.

For restaurateurs, these service charges offer some financial flexibility. Gratuities are tightly regulated by law and can be distributed only to tipped workers. A service charge belongs to the employer, who can choose how to spend it. Some keep it as revenue for the company, some share it with employees, some allocated it completely to the wage pool to address their experience that guests are often not very good tippers. Given tips are calculated on the total tab and restaurateurs sense a virtual limit on menu prices, this leads to a virtual ceiling on employee compensation.

Some guests are confused by the “service charge” added to the bill. Is this the same as the tip or the gratuity? Maybe it will move towards the form of a phone bill with additional fees listed, such as:

• Premium seating  (they didn’t put you my the kitchen doors)
• Tablecloth and linen service (even with paper napkins)
• Plates and utensils (as if you could bring your own)
• Extended service supplement (you sat at your table too long!)
• Concierge Service (someone not your waiter dropped by and asked you about your meal)
• Maintenance (washing the dishes)
• Fuel Surcharge (applied only to meals that require cooked food, salads exempt… unless you add the protein supplement)

Feel free to add your own administrative charge idea in the comments section

Krishna predicts that the fees will become more common and will average 20% of the tab. In any case, restaurants do seem to be caught between the “rock and the hard spot.” Their costs are rising and we are looking for discounts, all in an service industry without a lot of financial margins in their operations.

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