NASHVILLE, Tenn. (WZTV) — According to Square’s latest quarterly restaurant report, service fees have more than doubled since the beginning of 2022.
Square is the company that operates mobile or tablet payment systems often seen in restaurants, cafes and other small businesses. The report states that service fees now account for 3.7% of all food and beverage transactions, up from 1.27% in 2022 and 0.8% in 2018.
Ming-Tai Huh, head of restaurants at Square, says one reason for the increase is that “margins are currently smaller than ever” for restaurants. He adds: “Restaurants charge service fees for many reasons, such as to handle unpredictable changes in their operations or to avoid overhead, maintenance and administrative costs. As a restaurant owner, it is important to be clear and transparent about these fees so that customers understand the cost of the meal and what the fees are being used for.”
According to Toast, another company that operates POS systems in restaurants, you should still tip your waiters because those service charges don’t necessarily go into their pockets.
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