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The Texas Restaurant Association (TRA) is taking a stand against a new proposed rule that would prohibit restaurants from adding service charges to their bills. This rule, proposed by the Federal Trade Commission on November 9, is part of the "Trade Regulation on Unfair or Deceptive Fees."
The idea behind the rule is to prohibit the kinds of fees that irritate consumers, such as concert ticket surcharges and hotel "resort fees." However, the rule would also block common restaurant fees, such as credit card surcharges, which many restaurants count on. The TRA asserts that prohibiting such fees would force restaurants to increase menu prices, thereby hiding the true source of the costs, which is the opposite of the rule's intention.
The TRA issued a newsletter to membership discussing the situation, and asking restaurants to submit comments to the FTC about it. Here are some key points from the TRA's newsletter article:
What’s our position? Pricing transparency is important, and our consumers demand it. However, restaurants should have the ability to set and communicate their prices in any transparent way that works for their business. Requiring all fees to be included in a menu price is not only unfair, but it can actually be the opposite of transparent when you consider that many of these fees are not set or kept by the restaurant.
What’s our plan?
- We’ve asked the FTC to extend the comment deadline from January 8, 2024 to March 8, 2024. This is especially reasonable considering the holiday season and the fact that restaurants were not mentioned at all in the initial rule proposal.
- Regardless of whether we get the extension, we’ll be sure to collect and submit as many comments as possible to fully articulate the problematic impact this would have on our industry.
Learn more:
- Register for the webinar that National is hosting on this topic on December 19 here. (Note: This was rescheduled from December 7.)
- Read National’s new fact sheet here.
Take action: In one minute, you can submit comments to the FTC here.
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