In the Travel section of this past Sunday's Chicago Tribune, columnist Ed Perkins blasts San Francisco-area restaurants for adding a "'health' charge" to diner's bills in what Perkins labels a "scam...to cover the employers' mandatory contribution to the City's 'Healthy San Francisco' health-coverage system."
Scam or not, the outcome is a predictable one- and it may be coming to a restaurant or hotel near you.
As I've observed before, businesses don't ultimately pay taxes (http://prasifkapolitics.typepad.com/the_politics_of_accountab/2008/10/corporations-do.html). The idea that increased taxes aren't unlimately borne by individual investors, consumers, and employees (and on a large enough scale, the broader economy) is a complete canard- and this is just one more example that proves it.
Now, given that Perkins writes for the travel section of a newspaper, he can be excused for not being an economic guru; however, his conclusion is as lamentably ignorant as it is predictable. "(I)t seems to me that hidden mandatory fees are becoming prevalent enough to warrant some sort of government action."
Gread idea, Ed. How about mandatory price controls for restaurants and other travel-related businesses? How about a new government bureaucracy to present new compliance challenges, cost-and-pricing audits to which such businesses must devote additional time and manpower, further impacting its bottom line?
Perkins points out that,"Normally I write about practical information travelers can use, and I avoid taking 'there oughta be a law' soapbox positions."
That's a good policy, Ed. I can certainly see why. I wonder who you voted for in the last election.
Here's the link and the article:
http://www.chicagotribune.com/travel/family/ct-trav-0228-health-charge-20100226,0,6658174.story
New charge on dinner tab is in bad taste
The latest hidden mandatory add-on is a “health” charge added to restaurant bills. This scam cropped up first in San Francisco, but you can count on it to spread.
February 28, 2010
Nothing succeeds in the travel industry like a bad idea. The latest hidden mandatory add-on is a "health" charge added to restaurant bills. As far as I know, this scam cropped up first in San Francisco, but you can count on it to spread.
The rationale for this one is to cover the employers' mandatory contribution to the City's "Healthy San Francisco" health-coverage system. The charge actually is levied on employers, but at least some restaurants are adding a few dollars or percentage points to each customer's bill to cover this charge.
The restaurants' excuse for assessing this charge separately is to let customers know how much they're paying for employees' health coverage. That's the same excuse hotels use when they add "resort" or "housekeeping" fees to unsuspecting guests' room bills. It's the same excuse airlines would use to exclude fuel surcharges from their advertised fares if the Department of Transportation would allow them. And it's sheer nonsense. Employees' health insurance is no less of a cost of doing business than rent, property taxes, food costs, security services and all the other inputs businesses require to operate. To single out health care for a separate surcharge is unwarranted.
The restaurants adding this fee self-righteously proclaim, "It's not hidden; we print a notice on our menus." But that, too, is nonsense: Presumably, restaurants could apply that same rationale for extra fees to cover the cost of electricity, heat or linen service. I haven't seen any reports yet that San Francisco hotels are adding a similar charge. But hotels aren't shy about piling on other fees and charges.
So far, I haven't heard of "health" fees anywhere other than San Francisco. But, as noted, bad ideas travel fast, and I wouldn't be surprised to see it copied in one form or another by restaurants in other areas.
What can you do to avoid this fee? Presumably, not many of you would feel strongly enough about this minor scam to get up and walk out of a restaurant the minute you saw a notice about such a fee. And you probably wouldn't feel like making a fuss when you're paying your bill, either. But when you leave, you can certainly let the restaurant know that you resent this deception and that you won't be returning.
I've noted before — and you have undoubtedly found out firsthand — that hidden mandatory fees have become a bane of travelers and of consumers generally. The reason seems clear: As more and more of you use the Internet to compare prices, suppliers find it increasingly important to make their first-screen prices look as low as possible. As a result, they've taken to carving out part of what should be the true base price and instead adding it in only later — sometimes before you buy, sometimes not until later.
Currently, mandatory extra hotel fees are far more troublesome than restaurant fees. Trip-Advisor (tripadvisor.com) posts more than 72,000 traveler reports of unexpected hotel fees of various types. Although some of those reports obviously cover the same hotels, the number of hotels resorting to this deception has got to be in the thousands.
Normally I write about practical information travelers can use, and I avoid taking "there oughta be a law" soapbox positions. But it seems to me that hidden mandatory fees are becoming prevalent enough to warrant some sort of government action. The Federal Trade Commission has the authority to police deceptive advertising, but it moves at a glacially slow pace and even then gives wide latitude to miscreants. What consumers need is some sort of overall national "buyability" standard for advertised prices, along with robust enforcement authority. Certainly, such a requirement is workable; it works pretty well right now for airfares.
