Are Restaurants Allowed to Charge for Service on Takeout Orders?

The practice of charging a service fee on takeout orders is a relatively new trend in some parts of the restaurant industry. However, whether a restaurant can charge a service fee or gratuity on a takeout order depends on several factors, including local regulations, business policies, and transparency with customers. Here's a breakdown of what you should know:

1. Legalities of Service Charges on Takeout Orders:

• In most jurisdictions, there are no specific laws prohibiting restaurants from adding a service charge to takeout orders. However, businesses are required to be transparent about the charges and disclose them before the transaction is completed.
• Example: If a restaurant includes a service charge for takeout orders, it should be clearly stated on the menu or receipt. The customer must be informed beforehand, so they are not surprised at checkout.

2. Why Restaurants Might Charge for Service on Takeout:

• Some restaurants add a service charge on takeout orders to compensate staff for the extra work involved in packing, preparing, or organizing the food for pickup. This can be particularly common in establishments where the staff time or effort involved in takeout is similar to in-person dining service.
• Example: A restaurant may charge a 5% service fee on takeout orders to cover the additional work required to package and prepare the order for customers, especially if the restaurant has a busy takeout operation.
• In some cases, it may also be a way for restaurants to maintain profitability due to the lower profit margins associated with takeout and delivery services.

3. Consumer Rights and Expectations:

• While it’s legal in many areas for restaurants to charge a service fee on takeout orders, consumers should be informed upfront. If the charge is unexpected or not clearly disclosed before the order is placed, it could lead to complaints and potential issues with consumer rights.
• Example: A restaurant charges a $2 service fee on all takeout orders, but this fee is only mentioned after the order is placed. In this case, the customer may feel misled, especially if they were not given the option to opt out of the charge.

4. Transparency and Clear Disclosure:

• Transparency is key when charging a service fee on takeout orders. If a restaurant does charge a fee, it should be disclosed before the transaction is completed, either on the menu, at the point of sale, or on the receipt. If the charge is not disclosed beforehand, customers may dispute the fee as unfair or misleading.
• Example: A takeout menu states, All takeout orders are subject to a 10% service charge and the charge is visible on the customer’s receipt. This ensures that the customer is fully aware of the fee before completing the transaction.

5. Customary Practices and Industry Trends:

• Service charges on takeout orders are not universally accepted and can vary by restaurant. Traditionally, tips are meant for dine-in service, where waitstaff interact directly with customers. However, in light of COVID-19, more restaurants began to add service charges on takeout and delivery orders to compensate staff for their work, as many restaurants faced financial difficulties.
• Example: A local pizza place adds a $1 service charge on takeout orders to ensure staff members who prep and pack the food receive some compensation, especially since the restaurant’s in-person dining section may be closed or operating at limited capacity.

6. Service Charge vs. Gratuity:

• It’s important to note that a service charge is different from a tip or gratuity. A service charge is an obligatory fee added by the business, whereas a tip is optional and given at the discretion of the customer.
• If a service charge is added to a takeout order, it should be considered a charge for service and not a tip. The restaurant is responsible for allocating the service charge to the staff, whereas a tip is typically given directly by the customer to the service provider.
• Example: A customer picks up their takeout order and notices a 15% service charge added to their bill. The customer should not feel obligated to leave an additional tip unless they feel the service was exceptional.

7. Can Customers Refuse or Negotiate the Charge?:

• While customers can question or dispute an added service charge, they generally have to adhere to the restaurant’s policies if the fee is clearly disclosed. However, if the service charge is excessive, not disclosed properly, or if the service was poor, customers may have grounds to request its removal.
• Example: A customer may inquire about a 20% service charge added to their takeout order and request the charge be reduced if they feel the food was incorrectly prepared, or the service was lacking.

8. Example Scenarios of Service Charges on Takeout:

Example 1: Restaurant with Service Fee

You place a takeout order at a restaurant and notice a 10% service fee listed on the menu. When you pay, the service fee is clearly reflected on your receipt. You are aware of the charge upfront, and since the food is packed to your satisfaction, you don’t feel the need to dispute the fee. The charge is meant to compensate the staff for the extra work involved in takeout orders.

Example 2: Unclear Service Charge

You order takeout from a local café and are surprised when a 15% service charge is added to your bill. This fee was not mentioned on the menu or at the time of ordering. You politely ask the cashier about the charge and find out that it’s a new policy to cover the additional work required for packing takeout orders. You explain that you were not informed about the fee, and they agree to remove the service charge as a goodwill gesture.

Example 3: Excessive Service Charge

You pick up your takeout order from a fine dining restaurant and are shocked to see an 18% service charge added to your bill. You feel the charge is excessive given that it’s a takeout order, and the service was minimal. You speak to the manager and express your concern about the high fee. The manager agrees to reduce the charge to 10%, citing that it’s a new policy for takeout orders but offering a discount due to your dissatisfaction.

In Summary:

Yes, restaurants are allowed to charge a service fee on takeout orders, but the charge must be disclosed upfront and clearly communicated to the customer before the order is placed or finalized. The legality of such charges depends on local regulations, but transparency is crucial for customer satisfaction and to avoid potential disputes. If you feel a service charge is unreasonably high or was not disclosed in advance, you have the right to ask for clarification or request that it be removed or reduced, especially if the service was lacking. Always check the restaurant's menu and receipt to ensure you are informed about any additional charges before completing your order.