Twin Cities restaurants reacting to new "junk fees" law
MINNEAPOLIS — So-called junk fees are set to be a thing of the past in Minnesota starting Jan. 1.
Those extra costs often show up as health and wellness fees on bills at some restaurants.
Advocates say the law ensures price transparency, meaning the price you see on the menu is the price you will pay.
"Service fees are not junk. These are dedicated funds that go directly to employees," said Angie Whitcomb, president and CEO for Hospitality Minnesota.
Whitcomb argues the service fees are transparent to begin with, and said simply raising prices hurts business.
"As consumers, we are price conscious, so while the fix may seem simple, 'oh, just roll it up into the fee,' at some point, as a consumer, we're going to decide that $20 for a meal that was $15 last year is no longer part of our budget," said Whitcomb.
"I'd like to think that our employees healthcare and their mental well-being is not junk," said Brent Frederick, owner of Jester Concepts.
Jester Concepts operate operates six Twin Cities restaurants: P.S. Steak, Borough, Parlour, Butcher and the Boar, Char Bar and Starling.
Beginning January, Frederick said all his restaurants will be eliminating their 5% health and wellness surcharge and replacing it with a 3% credit card processing fee combined with a slight price increase.
Frederick echoed Whitcomb's claim about raising prices alone.
"The reality is, is that people are so cost-conscious right now," said Frederick. "They notice if something goes up a dollar or two, and that's when we get the fun two-star Google reviews."
Restaurants will still be able to charge a mandatory gratuity, as long as they are disclosed clearly and conspicuously.
Frederick said he's tried that in the past, but found those gratuities to be deeply unpopular.
Beginning next legislative session, Whitcomb said Hospitality Minnesota will be asking legislators for a fix to the law.