What is a COVID-19 surcharge? Why some restaurants are adding them to your bill

Some eateries are charging new fees to help make up for the rising cost of food and operating costs.
/ Source: TODAY

Next time you order takeout or sit down at your favorite restaurant for a meal, you might find yourself paying a bit more than normal.

As the coronavirus pandemic continues to take a toll on businesses large and small across the country, many restaurant owners are adding something called a COVID-19 surcharge to their customers' bills to help offset the cost of cleaning supplies, personal protective equipment for staff, disposable menus and more.

Whether it comes in the form of a 5% fee or an extra dollar tacked onto your bill, COVID-19 surcharges are becoming increasingly common and NBC News investigative and consumer correspondent Vicky Nguyen explored the rising trend on TODAY on Monday.

According to the National Restaurant Association, the safety measures restaurants have had to put in place during the pandemic cost each business around $10,000 on average. The rising cost of meat and other foods that have skyrocketed in price during the pandemic is also a factor and many restaurant owners say COVID-19 "recovery fees" are necessary to help businesses stay afloat.

"It’s just a small percentage to cover all of our extra expenses," Brian Staack, owner of Missouri's Bootleggers BBQ restaurant, told KY3 News.

Restaurants have been hit particularly hard during the pandemic, so COVID-19 surcharges make sense in theory, but many consumers aren't exactly thrilled about them.

"It's another greedy hand in my pocket, which, I have enough from other taxes and surcharges and reasons," one male shopper commented.

COVID-19 surcharges aren't unique to restaurants, and many salons and dental practices have also begun implementing them to help recoup the costs of protective equipment and cleaning supplies.

At the Coco Bond Salon in New Jersey, owner Erin McCabe adds $2.50 to each bill and says she needs to fees to stay open.

"It's really not for us to make money. It's just for us to stay afloat," she said.

Still, CreditCard.com's industry analyst Ted Rossman says businesses need to proceed with caution when it comes to tacking on extra fees right now.

"This is upsetting a lot of customers who may be struggling with their own finances, they may feel caught by surprise. They're feeling nickeled and dimed," he told TODAY.

Rossman went so far as to suggest that businesses are better off raising prices as opposed to implementing a COVID-19 surcharge.

"I know that that's not taken lightly. But I think that that sits better with the consumer," he said. "A lot of us don't remember exactly how much it cost the last time we got our hair cut or our teeth cleaned or we ate out at a restaurant. When you put it on a receipt in black and white and it says, 'COVID surcharge,' that's what gets people upset."

Many businesses across the country have faced major backlash after implementing a COVID-19 surcharge.

Kiko Japanese Steakhouse & Sushi Lounge in West Plains, Missouri, implemented a 5% fee in May only to remove it days later after intense social media outrage. Instead, they decided to raise their prices.

"We can take the harassment on our social media, but when they start being ugly to our employees here, it really bothers us," the restaurant's owner and managing partner Billy Yuzar told TODAY Food at the time. "This is why we decided to just eat the cost of printing new menu and adjust it weekly. We will go back to our normal prices once food prices go back to normal."

In most states, it is legal for businesses to add on surcharges, but they must disclose them to consumers through signage, verbal notifications or on a receipt. And if you do come across a COVID-19 surcharge that wasn't properly disclosed, you can always ask the business to remove the charge or file a complaint with a local regulator.

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Many consumers worry that extra charges are unfair to customers who are also struggling during the pandemic, and some frustrated customers are taking it out on their server and neglecting to leave a tip. But remember, these charges are only temporary and the tip goes directly to the server.

"The businesses we spoke to said the COVID-19 surcharge is not meant to replace tips for employees. That’s an important difference: a tip goes directly to employees whereas these COVID-19 charges are supposed to go towards operating costs, not employee paychecks," Nguyen said.