New Mexico Central

The “Appreciation” Is Not Appreciated – And So Long To At Least One Restaurant

by John Weckerle

Today your editor dined at Vinaigrette in Santa Fe. This included a cup of the mushroom stew and splitting a “The Beet Goes On” salad. The stew was very good. However, the salad, while tasty, was disappointing; the entire thing, for both of us, appeared to contain a single slice of a rather small beet – in short, the beet did not go on, or at least didn’t go far. The amount of goat cheese seemed a little diminutive as well. We compliment Vinaigrette on the overall taste of the salad.

To steal a phrase from Arlo Guthrie: “But that’s not what I came here to talk about…” What we came here to talk about is something that appeared on the final bill – a completely unexpected 2 percent “Kitchen Appreciation Fee.” We did not see this anywhere on the menu nor did the server mention it. It does not seem to appear on online menus, and Vinaigrette doesn’t appear to discuss it online.

Research shows that this is becoming more and more common. It is sometimes described as a way to increase kitchen wages (addressing wage disparity between kitchen staff and servers) “without increasing prices.” How dropping a 2 percent surcharge isn’t “increasing prices” is a bit beyond us; to our way of thinking, and apparently to the way of quite a few other people’s thinking, it’s just a sneaky way of – well – sneaking in a price increase without calling it that in order to cover a cost of doing business that patrons assume is part of the offered price.

However, in a lot of cases, under some common circumstances, it may also be not entirely legal. Specifically, it’s not entirely legal if it isn’t disclosed up front. Under New Mexico’s consumer protection framework, if a restaurant charges full menu prices and then adds a fee to cover normal operating costs without disclosing it, that can be considered:

• A price increase disguised as a fee
• Deceptive pricing
• A hidden surcharge

There are a couple of statutory/regulatory references relevant here:

• NMSA 1978, § 57?12?1 et seq. (Unfair Trade Practices Act – UTPA)
• NMSA 1978, § 57?12?3 — prohibits unfair or deceptive trade practices in the sale of goods or services.

A business violates the UTPA if it:

• Makes a misleading or deceptive representation in connection with a sale
• Fails to disclose a material fact
• Creates a false impression about the total price
• Adds charges that a reasonable consumer would not expect

The statute defines a deceptive practice as one that “may, tends to, or does deceive or mislead any person.”

New Mexico doesn’t have a restaurant-specific surcharge law, so the UTPA is the controlling statute. A mandatory surcharge on the bill that’s not disclosed on the menu or by staff may violate the UTPA by:

• Making a misleading or deceptive representation in connection with a sale
• Failing to disclose a material fact
• Creating a false impression about the total price
• Adding charges that a reasonable consumer would not expect

So what do you do when you run into a situation of this nature? Well, you can refuse to pay the charge and argue the situation right there at the restaurant – and it’s hard to see how a restaurant could force payment if they didn’t disclose the charge up front. But time does not always allow us the luxury of arguing with a manager for an hour. What you can do is deal with it later, through a complaint to the New Mexico Department of Justice. Here’s the link: ECS – Introduction – New Mexico Department of Justice

If you have them, it’s helpful to have a few things to attach:

• A photo or scan of your receipt showing the undisclosed fee
• A description of whether the menu or server disclosed it
• The date, time, and location
• Any communication with staff about the fee

We asked our AI to provide a reasonable example of a narrative for a complaint:

I dined at (restaurant) in (city, state), and was charged a mandatory “Kitchen Appreciation Fee” of 2% that was not disclosed on the menu, by staff, or anywhere prior to payment. This fee was only revealed on the final bill.

Under the New Mexico Unfair Practices Act (NMSA 1978, §57?12?1 et seq.), businesses may not engage in deceptive or misleading trade practices, including failing to disclose material terms of a transaction. An undisclosed surcharge that increases the total price of a meal constitutes a deceptive practice under §57?12?3 because it misleads consumers about the true cost of the service.

I am requesting that the Attorney General’s Office review this practice as a potential violation of the Unfair Practices Act.

Bon appetit!

Filed under: Bernalillo County,Restaurants,Santa Fe | |No Comments