How Would You Like Your Inflation Served?

The Mexican restaurant chain Chachos is now charging a 7.5% inflation surcharge on all meals with cheese. Skyrocketing commodity prices present restaurants with a menu of unappetizing choices: raise prices, levy surcharges, reduce portions? How would you like your inflation served? Vote in our poll, after the jump.

Reader Neal’s receipt:


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  1. arcticJKL says:

    I think that higher prices is a obvious ‘inflation surcharge’.
    Cost go up, prices go up.

  2. citabria says:

    I would hope that the restaurant would tell the customers about the surcharge before getting the bill. Otherwise I’m sure there would be some very unhappy customers.

  3. speedwell (propagandist and secular snarkist) says:

    They’ve been doing an extra “cheese charge” for months now. I forget how long. I don’t eat cheese and I definitely don’t eat at Chacho’s, since the time they insisted on charging me the cheese upcharge even though I asked for “no cheese.”

    I guess this is the way they thought up to screw the vegans, too.

  4. speedwell (propagandist and secular snarkist) says:

    @speedwell: In fact, it was this same damn location. Figures!

  5. SpenceMan01 says:

    Our regular local mexican place just bumped their prices, too. It comes out to about a dollar more for the entrees we order at lunch every week. I can understand raising prices, but a surcharge? That’s just bull$&*t.

  6. Crazytree says:

    if it’s not on the menu or posted conspicuously, you have zero legal obligation to pay it.

  7. So it costs more for Chacho’s to pay sales tax is harder during these economic times too? Cause that 7.5% surcharge includes an 18¢ contribution from taxes.

  8. Maurs says:

    Really this is just screwing over the waiters, who are going to find themselves receiving 7.5% “inflation adjusted” tips from disgruntled diners.

  9. @Michael Belisle: No, the charge does not include the taxes.

    However, I don’t think that businesses should take pointers on how to deal with a changing economy from the airline industry.

  10. @rmric0: Whoops, right you are. (An annoying editing mistake and fundamental calculation error: not bad for a two sentence post.)

  11. speedwell (propagandist and secular snarkist) says:

    @Crazytree: They do post it conspicuously. It’s printed on laminated letter-size signs on the wall behind the cashiers. So it USED TO BE easy to avoid if you didn’t like cheese. No more, apparently.

  12. ChuckECheese says:

    I was ruminating about restaurant inflation today as I ate a diner bacon cheeseburger, fries and iced tea. It cost $10.00 before tip. There’s another diner about 3 miles down the road from this one that charges 50¢ more for the same meal. Despite inflation, I wondered what good reason these restaurants have for charging $8 for a pedestrian burger and fries, and another $2 for iced tea.

    Even at retail, the cost of the ingredients for my meal would be about $2.00; I expect a restaurant pays less than retail for its groceries. Did all their other costs go up too? The Mexican cook is probably making minimum wage and the waitress less.

    The diner had nothing on its menu for less than $7.50, for breakfast, lunch or dinner, with two obvious exceptions: A breakfast bowl of oatmeal for $4, and a grilled cheese for $5. They’ve decided that if you aren’t willing to spend at least $8, they don’t want your business. This is a casino town, and the casinos charge less than this. Are the diners unable or merely unwilling to compete with the casino restaurants? (Note that in this market, that casinos don’t discount the restaurant food, and the same meal would be about $7 total.)

    Is cheese really so expensive that it requires a 7.5% charge on the full bill? Is there cheese in Sprite? A pound of real cheddar is about $4.50 retail. Their actual food cost increase (for cheese) is probably only about a quarter per entree. Why not a 25¢ surcharge for cheese, rather than 7.5% on the total bill?

    It is shenanigans like this (charges clearly in excess of increased costs, minimum charges, and the story that Speedwell tells above of being charged for cheese even when it is not ordered), that leads me to believe that a lot of our current inflationary push is nothing more than a money grab.

  13. midwestkel says:

    Wow, small Sprite – $1.49? Could’ve go to the gas station and got a two liter for that price. Looks like they already added the inflation to the food!

  14. dragonfire1481 says:

    @midwestkel: Good point, I can’t help but wonder if the food prices have been raised IN ADDITION to the new “inflation surcharge” in an attempt by the restaurant to boost profits.

  15. @ChuckECheese: Even at retail, the cost of the ingredients for my meal would be about $2.00; I expect a restaurant pays less than retail for its groceries.

    Energy is more expensive. Their employees are begging for higher wages because they can’t afford to feed their family any more. Their lease is coming up for renewal and that’s going up too. Inflation doesn’t pick favorites.

    That said, an inflation surcharge is stupid. It implies that it’s some sort of temporary measure, as if tomorrow inflation will be gone and they’ll be able to take the surcharge off. The inflation surcharge will (should) come off one day, but it’ll be absorbed in the prices. (Unless Chacho plans to index the inflation surcharge to inflation, so that it’ll be a ~30% surcharge by 2015 and the menu will still have 2008 prices.)

    It is shenanigans like this … that leads me to believe that a lot of our current inflationary push is nothing more than a money grab.

    Stockpile cash while you still can. There’s a storm coming. (Not to mention that Greenspan complained about “irrational exuberance” in the mid-90s. We were past due for some sort of a significant correction.)

  16. bobpence says:

    As usual I did the math, and Chachos avoided the pitfall I thought they would encounter: The sales tax does take the surcharge into account.

    But the “cheese” surcharge is applied to all the menu items on the receipt. I’m not sure the last time my Sprite came with cheese!

    Lots of restaurants charge extra for cheese, but they do so above board, and they build it into the price of stuff that virtually always comes with cheese. This is questionable at best.

  17. bobpence says:

    As soon as I closed the tab for this story, something caught my eye on another tab I had open when I Googled to see if this had been addresses elsewhere, the link is at [local.yahoo.com]

    Note the post on 8/25/2007. The surcharge — the 7.5% surcharge — has been applied for the last 11 months at least?! On 8/25, the average price of gas in the U.S. was about $2.75, versus about $4.08 today.

  18. Raise the Farking Prices.

    I am speaking with the voice of experience. It is the wee hours of the morning and I have a big arse spreadsheet open in front of me trying to reconcile my electric bill that increased by $xxxx versus the same month last year.

    Either prices are going to increase or I am going to have to lay off employees.

    Yo, Rhonda. You are keeping your job. I am going to raise prices.

  19. dry-roasted-peanuts says:

    Anyone care to place a wager on how many of the “adjustments” will go away when oil prices go back down?

  20. renegadebarista says:

    Owning a small coffeehouse I can understand the frustration that the restaurant must feel, but I think how they have handled it is as bobpence put it “questionable at best.” There seems to be this belief that restaurants make money hand over fist, as demonstrated by ChuckECheese’s post, and really nothing could be further from the truth. In the past four months I have seen milk double in price, cheese go up by over 30%, produce by about 15%, paper products 15%, my bakery has raised its prices by 18%, and thats just the beginning. Milk, being one of my core ingredients is expect to continue to rise by about 2-5% a month for the near future. Top that off with most distributors tacking on delivery/fuel charges, energy prices from electric utilities going up and it starts to put you in a difficult situation. This idea that ChuckECheese puts forward that inflation is simply a money grab on our part is simply not true. Right now many of us, just like many people in their personal lives, are just struggling to make ends meet. I know a lot of my counterparts that are just thinking about how to stay alive, the last thing any of us have time to think about is how to try and screw customers out of money.

  21. Karl says:

    That’s really shady, if not illegal.

    The nice warning statement at the bottom also makes me wonder if they tack on a hidden debit card surcharge, and then tries to blame your bank if you notice a discrepency. Or, it could simply scare people away from using their debit cards. Banks get a cut of the transaction total, so I don’t see why they’d charge you (unless they LOVE screwing over their customers).

  22. I personally just love the surcharges.

    NOT.

    There is a place for surcharges. From a business perspective I can justify a fuel surcharge…. up to a point. But when a company resets their prices the company should also reset the fuel surcharge. Granted there is a chance the fuel prices could go down. So maybe the fuel surcharge’s starting point should be the lowest price 12 months PRIOR. But that means there is always a small surcharge added for fuel.

    That is not exactly fair.

    I need a new pair of shoes. I will shop the ads in the Sunday paper, find a pair that I can afford (based upon the ad price) that I might like and go buy the shoes.

    Should a shoe store have a fuel surcharge? Yes, they paid a fuel surcharge on the freight to get the shoes to the store, but should there be a separate charge? And why should there be a separate charge? The store had the option of changing their selling price in the ad.

    Same thing for a restaurant. Yes, market price for Lobster is fine, IF you actually change the price each and every day. But most restaurants don’t change their Lobster prices every day. Hells Bells most restaurants charge the same price for Lobster 365 days out of the year. So why isn’t the Lobsters priced on the menu?

    My local fav dive has a Saturday Night Special. The specials are printed on plain paper and stuck in the regular menu. Steak goes up in price, next week there will be a new Saturday Night Special menu with new higher prices. Pretty simple concept. Why should any restaurant be allowed to have an energy, inflation or whatever surcharge? If things get really bad, just Sharpie out the price in the menu and scratch in a new price.

    There is too much goofy inflationary stuff happening. Most of it is energy (fuel, electricity etc) related. The trickle down effect is being felt across the board.

    Everybody needs to encourage their fav places to raise prices. Go ahead and charge me $0.50 extra for my meal. Raise the price of shoes by a buck. DO IT, don’t play games with hidden fees and surcharges.

  23. randombob says:

    I’m sorry, but it seems to me that raising the menu prices is NOT hiding it, adding surcharges to the final bill (that are probably not disclosed) is hiding it.

    I voted for menu price increase, because it’s LEAST hidden, and when I open the menu I can make an accurate decision on what I want to afford based on that price that is displayed.

  24. @renegadebarista:

    Yep. I understand your pain.

    The ice cream stand up the road from me has an electric bill that is $228 and some change higher than last year at this time. I was in there about a week ago and he was really crying the blues.

    $228 x 12 = $2700 + per year that the owner of that ice cream stand must either absorb out of his profits (which is most likely only what he pays himself as salary) or pass onto customers. He was crying the blues because I doubt he makes big enough bucks to absorb that $ out of his salary.

    Nice classic Catch-22 for the small business owner.

    And next month the cost of ice cream will go up for no other reason that just because the ice cream plant is paying more in electricity.

  25. renegadebarista says:

    @Corporate-Shill:

    It gets better the one that I forgot to talk about in my first post is the base charge that Visa and MC charge merchants, it went up earlier this year and Visa is talking about raising it yet again, and in this day and age, where at my cafe at least 50% of my transactions use a card, simply not taking them is not an option, and I’m not even going to think about doing all that discount for cash crap.

  26. InThrees says:

    I voted ‘hidden’ but I strongly disagree with how the choices are labeled.

    ‘Blatantly Obvious’ vs ‘Hidden’ – Blatantly obvious would be noting that a dish that formerly cost $7.95 now costs $8.65… and it’s also the most honest and forthright option for the restaurant. When the price goes up, it’s obvious the buying power of each individual dollar has gone down. What’s not so obvious is some dubious ‘surcharge’ that may or may not surprise me at the end of a meal that I expect to pay the same price for that I paid three months ago.

  27. speedwell (propagandist and secular snarkist) says:

    Yes. Raise the prices. Keep the doors open. Keep our jobs going. Raise prices fairly and honestly. Reflect reality in what things cost.

    Consumers understand the rising costs of goods. We know what it means. We don’t understand arbitrary codes and surcharges. We don’t know what the economy is like unless we can read it from the general trend of price vectors.

  28. renegadebarista says:

    Carey,

    Can you explain your choice of wording for the labels on the poll?

    “Hidden” seems to imply that restaurants who do price increases are trying to put one over on patrons, which as I touched on before is simply not the case. Like I said before many of us are just trying to survive.

  29. speedwell (propagandist and secular snarkist) says:

    One last thing before I go to bed:

    Folks who don’t know or remember how Chacho’s operates: You walk in and stand in line to order. You pick up a menu and look at it. When you get up to the head of the line, you order from a cashier. The sign about the surcharge was on the wall right behind the cashier’s head last time I was there, and I would count that as conspicuous. I don’t remember there being a note on the menu, and it should be there in screaming red letters, really.

    I have no beef about the sign. I just think their policy is muy retarded.

  30. Lordstrom says:

    Seeing how most resturaunts serve portions far too large as it is, that is definitely the choice here.

  31. Average_Joe says:

    I truly don’t have a problem as long as it is clarified up front. It probably saves the restaurant from having to reprint menus every week when their costs change. They can just post a different percentage. But I would agree this is going to strong discourage tipping. But tips are supposed to be optional, so that isn’t that big of a deal.

  32. akalish says:

    @ChuckECheese: They’re not in it for your health, you know.

  33. @renegadebarista:

    50% ?

    Only 50% ?

    I got a cousin working in a highend dress shop. They are running close to 100%.

    My business was 50% just two years ago. The last quarterly report was 81%.

    I feel your pain at 50%. But just wait, the % is going to increase as more and more consumers opt for CC for even small purchases.

  34. Canino says:

    I’d bet the reason for this is just that some VP at corporate doesn’t want to pay to have all the menus reprinted again because he’s afraid it will affect his bonus.

  35. @Canino:

    Office Depot has a special on Sharpie’s. IF you miss the OD special, I am sure Staples will have one next week.

    In other words, tell the cheap sonofabytch to grab a handful of Sharpie’s and do himself proud.

  36. FLConsumer says:

    If it’s 1/2 cheese, shouldn’t be it 1/2 surcharge?

    Also.. $9 for Mexican?!?! What is this world coming to?

  37. speedwell (propagandist and secular snarkist) says:

    @FLConsumer: Neighborhood taquerias that charge 4.95 for tacos al pastor and 6.95 for fajitas. It’s not like Houston has a shortage of restaurants, oh, my, no.

  38. ChuckECheese says:

    @akalish: This isn’t about me or my health. I’m responding thoughtfully to the issue raised in this post, unlike you. Clearly others have a problem with Chachos charging a 7.5% cheese fee. I have a degree in hotel management, and I have worked in restaurants, so I notice these things. If your restaurant is charging $10 for a hamburger and soft drink in a town where the minimum wage is $6 and there are no high-wage paying industries, you should expect to see a drop in business.

    I am sympathetic to restaurateurs and business owners. But charging 7.5% “cheese tax” on the entire order–including the Sprite–looks like a money grab, not a legitimate attempt at recouping an increased cost. And it reduces my sympathy. As does charging $2 for iced tea. If you complain to me that people aren’t in your restaurant and you’re charging $2 for a plastic tumbler of tea, then I will laugh derisively.

    Let’s discuss the costs that @Michael Belisle: mentions. Employers aren’t handing out raises these days. The threat of losing a job in this weak employment market is enough to keep most menial workers quiet, at least for now. The typical American worker hasn’t really had a raise since about 1973 anyway. Electricity costs in this region have actually gone down in the past three years, and are about 1/3 lower than Texas’s. The real-estate market here is in the crapper, as bad as California, and I doubt landlords have the cojones to raise rents at a time like this, as there are vacancies all over town. The pressure my example restaurant is experiencing is in food costs. Chachos’ details may be different.

    Say food costs are 25% of the menu price. Then say all your food went up by an average of 20% (an exaggeration, but anyway). The amount of your actual menu price increase is .25 x .20, which is .05, or 5% to break even. Actually, I hope a greasy spoon’s food costs aren’t 25%. And I doubt their wholesale food prices went up 20% across the board.

    I don’t think restaurants make money hand over fist as @renegadebarista: claims I do. I realize restaurant margins are rather slim and that the work is hard. HOWEVER, you get and keep customers by offering what is called “value”: The patron must feel s/he is getting her/his money’s worth. RE coffee shops: They have a different product mix than a restaurant, and must do volume in order to make money. I imagine it’s a harder business to make pay than a restaurant.

    Back to value. Add-on fees are the opposite of value. Paying the restaurant 7.5% and getting nothing in return is not value. That’s what sticks in people’s minds, that they’re being charged an extra 7.5% and getting nothing back. Blaming it on cheese is demonstrably false, which only adds insult and lies to injury. In my example, $1 will buy you 100 tea bags, which can make about 12 gallons of iced tea and serve about 40 patrons. So people know that a $1.49 small Sprite or a $2 tea is not “value;” it seems greedy and unfair.

    I have two more related ideas that I will bring up in a subsequent post.

  39. TechnoDestructo says:

    Unless they’re telling you up front, before you order anything, and preferably before you even set foot in the door (many restaurants post menus outside, particularly in areas that get a lot of foot traffic and have a lot of other restaurants) that there is a surcharge, and how much it is, the surcharge is the “hidden” increase. Changing the prices is the most honest method.

  40. ChuckECheese says:

    After restaurating I became a shrink. There’s a psychological affliction that besets business owners during a downturn called “narcissistic injury.” This means that all the dreams the restaurateur had about her/his business aren’t coming true, and they become bitter. E.G., People won’t buy the food that is for sale, or they won’t pay the asking price.

    If you’re practical-minded like me, you’d say, “Well then change the food mix or the prices.” But somebody who is experiencing narcissistic injury thinks that changing recipes or prices is like committing suicide (they over-identify with the way they do things, equating it with their very identity and existence), and no matter what, they won’t change. In fact, they’ll get angry (anger/rage is the primary symptom of an active narcissistic injury), and they’ll take this anger out on the customers, by complaining about them, or passively-aggressively charging cheese tax, or stiffing them on the french fries (as my restaurant did today).

    Similar idea: Last week a friend reported that although he wants to buy a brand-new car, the car places treat him like crap and aren’t even trying. Now he’s just going to buy it online and cut out the salespeople. The fact that these places aren’t selling cars doesn’t make salespeople try harder to sell cars, it makes them angry and resentful towards the public that is not buying them, and this resentment is dumped upon salespeoples’ family, friends, and even car buyers. Rational economy? I don’t think so.

    Final point, back to value. I think there is restaurant money to be made in this economy, but you will have to be able to make inexpensive food that tastes good, and feed it to people at a price that they know is a deal compared with other places. You will make your money on volume and repeat business, not the 80X markup on your tea. If cheese is too expensive, make food without cheese. But narcissists don’t like to do cheap food, serve poor people, or be controlled by market forces–they tend to see their businesses as doing the world a favor, expecting people to fall over in gratitude for their brilliance, rather than managing a business serving real people. So my suggestion is not one for narcissists.

  41. Benny Gesserit says:

    I love the restaurant’s math – or their interpretation of the “meals including cheese”.

    The surcharge includes 7.5% on the small sprite. I don’t know about this place but the one down the street from me doesn’t put cheese in the soft drinks.

  42. ShadowFalls says:

    I see decreasing portion sizes more hidden than increasing menu price. The surcharge on the bill? It is a little sneaky, some people don’t eye their bill as closely as others do.

  43. Ein2015 says:

    I’m glad that I moved from Houston to Dallas.

    For all you readers from Houston… y’all know of a place called Agora on Westheimer? Great coffee shop. It’s expensive (makes Starbucks look cheap, both in price and quality)… but you really do know what you’re paying for. The atmosphere is amazing, the coffee is delicious, and the patrons just add to the experience. Unfortunately there’s not a place like that in Dallas. Agora is the only real thing I miss about Houston. Someday, I will open up a coffee shop just as popular up here… someday.

    As to the Chacho’s bit… I tend to stay away from restaurants that do this. I know prices are going up. Just raise your damn prices.

  44. ObtuseGoose says:

    I’m within dining-distance of Chacho’s, and I have no intention of ever going there. Based on other comments here, they are overcharging the public for soft drinks when they do this. I’m hoping a Texas official will see this article and fine Chacho’s for defrauding the public. It would have been a lot easier for them to add a “25¢ cheese surcharge” key to their cash registers (or change the damn menus, cheapskates!)

  45. TechnoDestructo says:

    @Jim (The Canuck One):

    Go in there and DEMAND the cheese on your sprite, the cheese that you are PAYING for.

  46. rpm773 says:

    It’s kind of funny how the people who come up with policies like this have very little knowledge of how PR works. You raise prices, people grumble, maybe a few leave, but in the end most people understand and get over it.

    However, when you slap surcharge on the bill and it gets out via sites like consumerist.com, well, you’ve just created a firestorm of negative opinion.

    I don’t live near a Chachos, but if I’m ever near one and consider dining there, I’m afraid this thread is going to stay branded into my mind for a long time – long after any reversals of such policies.

  47. TexasBelle says:

    Rather than raising restaurant prices — whether with sneaky surcharges or otherwise — why not leave prices the same and just make gargantuan portion sizes a little smaller? Eating out would cost the same, profit margins could stay the same, and maybe we wouldn’t waste so much food. It would be healthier, and totally above-board as long as it’s announced on the menu: “New! Slightly smaller portions for less waste.”

  48. gmoney says:

    @TexasBelle: The reason is that food is one of the smallest, if not the smallest, cost issues for the restaurants. It’s all about labor and overhead (and that’s what your meal price increases are covering) and heaping on food is one way they can please you without breaking them. So by the same token, reducing your portion won’t help the bottom line so much. That said, I’m sure some of this is being done.

  49. Aphex242 says:

    @gmoney: Exactly what I was going to say. They’d have to cut portions in half or more to really realize much of a difference on the bottom line.

  50. Grrrrrrr, now with two buns made of bacon. says:

    For Pete’s sake, just raise the prices. Everybody is used to it by now. If done correctly, only the menu items who’s ingredients have actually increased in price will see a price increase. If my local restaurant began charging an “Inflation Surcharge,” I’d be going somewhere else.

    It’s the same thing with the airlines…it’s deceptive to advertise a low price and then tack on another $200 worth of fuel surcharges, baggage surcharges, airport taxes, usage fees, landing fees, and facility fees.

    Just give the actual price.

  51. corkdork says:

    If I worked there, I’d want a 7.5% “inflation bonus” on my paycheck. Seems only fair, after all.

  52. synergy says:

    @speedwell: Damn, that sucks. The neighborhood taquerias over here in San Antonio don’t charge more than $1.89 for a taco and even that I was getting annoyed about the other day. A really cheap, somewhat small taco at the PikNik convenience store only costs $0.69.

  53. Forkboy3 says:

    The only reason to have an inflation surcharge is because customers will be paying more for the item than they think they are. Straight from page one of the “How to Run a Doomed Airline” book.

    What’s going to happen if all businesses start doing this? It will lead to a lot of confusion and customers paying more for items than they expected especially if the business applies the charge to only certain types of items. Imagine a grocery store that says “7.5% inflation surcharge to all diary products”; “5% inflation surcharge for all corn-containing products”, etc. Or a department store that has “5% inflation surcharge for any item containing steel”.

    The consumer won’t know how much anything costs until they get their receipt. This has “hey we just figured out a new way to rip off customers” written all over it. Which means stores all over will start doing it before long if consumers don’t revolt.

  54. alstein says:

    You get too much food in restaraunts anyways, so smaller portions would be better.

  55. MonkeyMonk says:

    I think calling increased prices “hidden” skews the results somewhat. I think increased prices is the most upfront and obvious way for companies to face escalating manufacturing costs.

    Adding an inflation surcharge just seems silly. I’d be curious to see how the restaurant was notifying customers of this surcharge before they placed their orders. I know I’d be peeved if I saw this surcharge on a bill without knowing about it advance.

  56. UnicornMaster says:

    I actually kind of like this idea. I’d rather they do that than up their menu prices on everything by $0.50. This way you have the comfort of the original pricing and the reflection of our poor economy. Clever.

  57. bohemian says:

    @Michael Belisle: I have seen most of our utilities go up along with food and gas. I’m still at a loss how the housing slump made our dentist office suddenly need to ramp up their income drastically. They went from very laid back and honest to the dentist running from bay to bay telling everyone if they didn’t get some expensive elective procedure they would die or lose all their teeth. They were also shilling dental credit cards at the desk. The only thing I could guess was the dentist had a ARM mortgage on his house. There are plenty of businesses that you can understand raising prices like restaurants and delivery services. But I am seeing ones that really are not taking a major hit and have larger margins jacking their prices.

    Other than increased gas for service trucks our cable provider has no excuse for raising rates $50 a month.

  58. sven.kirk says:

    @DeanOfAllTrades: Clever? Maybe. Stupid? Definitely yes.

    I am surprised that nobody has yet suggested with a chargeback because of hidden fees (I assumed that it was not disclosed at ordering or at any time. The OP never stated).

    But I would been a bit of a jerk, and I would have taken the difference out of their tip. And I would tell them that also because they did not tell me of the surcharge.

    But as for the poll, I would prefer either one of two things. Either smaller portions, or a slight increase in price.

  59. linbey says:

    @lorddave:

    They are only too large for you. I happen to like the portion sizes I am served

  60. MitchV says:

    This is stupid.

    Just because inflation has increased this year and it’s a top story of the major news outlets does not mean it hasn’t been there in the past.

    Should restaurants have a billboard to display a CPI increase? How about currency fluctuations?

    Restaurants should not change their portion sizes – customers have come to expect a certain product and they will be disappointed with anything less. Consistency is very important in the restaurant business.

    Increased cost should be directly reflected in the menu prices. This is where the expectations for the customer have always been set.

  61. MitchV says:

    Here’s an idea… offer customers a 3% discount if they pay by using cash instead of a credit card. Everyone wins (except the banks)!!

    If a restaurant is sophisticated enough to adjust for inflation, they can certainly offer a discount when customers help them avoid transaction fees.

  62. TexasBelle says:

    @gmoney: Ah, okay. So I guess an “inflation surcharge” doesn’t really have anything to do with cheese. In that case, higher prices across the board would be the honest option.

    But @sven.kirk: I would never routinely deduct a hidden fee out of the server’s tip, unless the server is somehow directly responsible for the hidden fee. I doubt that’s the case very often. Even if the server fails to disclose the fee, it’s probably because the boss told him not to.

  63. speedwell (propagandist and secular snarkist) says:

    @synergy: Nah, it’s OK. It’s not 4.95 for ONE taco, it’s more like two tacos (with meat strips, not the pathetic Taco-Bell-style ground mystery meat), rice, and beans. And lots of people just get ice water, which is usually good because restaurants are legally required to filter the water and a piece of lemon or lime is tossed in pretty much by default. (Did you know that in Houston a restaurant cannot refuse to serve a glass of water to a walk-up who buys nothing, by the way?)

    I was going to mention something about the high cost of drinks in Texas… you think 2.00 is bad… I was at a seafood restaurant in San Antonio a couple weeks ago, and they were charging 2.49 for a glass of iced tea (which I did not buy). Now before everyone clutches their pearls and goes into a tailspin, in Texas (as in much of the South) free refills are the norm. Many places just turn the fountain loose and let you get your own refills, even in some decent places. Most sit-down places send the server around to fill glasses, like they do water elsewhere. But 2.49 is still made of abuse.

    I’m wondering if Chacho’s “inflation surcharge” isn’t a lefthanded way of covering for the fact that their worthless servers don’t bother to lift a finger to do anything so nobody bothers to leave a tip. You order at a cash register when you walk in. You get your OWN food when they call your ticket number. You get your OWN table and your OWN condiments. If you want any more food, you go back up to the cashier and get it yourself. The drive-thru offers a better service experience.

  64. Ecks says:

    Is this “surcharge” posted anywhere? If that arrived on my bill, I wouldn’t pay it, and there wouldn’t be a tip either. I don’t “believe” in tipping (yeah, I know…), all prices should be listed, if they want to raise prices to cover tips, that’s fine, but I don’t feel obligated to pay more because society has decided to subsidize their wages with tips.

  65. GearheadGeek says:

    @Maurs: Chacho’s doesn’t have waiters, it’s a counter-service place, at least the one in Austin is. I haven’t been to the one on Westheimer.

  66. dweebster says:

    @Ecks: Yeah, I guess the question is that it is made as clear as the menu prices to all customers BEFORE ordering.

    I’ve seen this sort of “tack on” game played in my local area, and it really pisses me off to have it “sprung” on me at the final bill. These stupid restaurants are being penny wise and pound foolish – their 2% “surprise” arbitrary fee is assuring I’ll never eat there or recommend anyone else eat there again.

    As a great philosopher once said: “fool me once, shame on you. Fool me twice, won’t get fooled again.”

  67. balilanai says:

    How about a surcharge for eating crap? The poster deserves it.

  68. speedwell (propagandist and secular snarkist) says:

    @GearheadGeek: Well, it has staffpeople walking around. I’d assume they were there to bus tables, except they walk right past dirty tables. I thought they were servers.

  69. SayAhh says:

    Only in Texas (I hope) home of the Whopper… I mean, George Bush! hahahahaha

  70. floraposte says:

    I’m another objecting to the “hidden” term. Prices always include overhead as well as the cost of goods; that doesn’t become “hidden” just because there are no lines on the bill indicating the amount that went to labor, rent, utilities, etc. It’s not like “inflation” is a separate charge the business owner pays, either, or that it’s a new thing. If it’s not an optional charge, fold it into the prices so that the prices honestly reflect what people will pay. (Yes, you too, hotels.)

    I wonder if the business owner was trying to avoid the cost of printing up new menus with new prices. I can see where you might want to do that–one of the most annoying things to me about the grocery shrink ray is that the company had to sink a fair bit of money into the new containers and the changed processing as a result so it’s costing them more money than an honest price hike–but that’s not enough to justify it to me.

  71. BytheSea says:

    I’d rather they reduce the portions, because I hate the practice of giving you a ton of cheap food to make up for how much they charge you to cover the resturant’s overhead. However, I doubt the resturant would be able to recoup its losses by giving its customers 1/4 cup less rice, which comes out to .01 cents.

  72. Ronnnn says:

    I called the restaurant and discussed the surcharge with their receptionist. He explained that they did not have the time to change their menu but wanted to increase their prices. Why ever reprint their menu when all they have to do is change the surcharge? It would be cheaper for all restaurants to do this. One can only guess why all restaurants don’t bother updating their menus.

  73. tator says:

    I see this charge is added to the bill AFTER calculating sales tax. This would appear to be a taxable item with the state also profiting from the transaction. I would guess they are not giving the state their share.

  74. HogwartsAlum says:

    This thread is making me want a cheese enchilada.

    Raise the prices already. It’s not like everything else hasn’t gone up.

    ChuckECheese: $4 for a bowl of oatmeal?!?! That’s inconceivable!

  75. bobpence says:

    @Ecks: Traditional social contract theory holds that you assent to the social contract of a society by living within it. Of course this doesn’t rule out seeking government redress, but seeking change in business is best accomplished by voting with your feet and wallet.

    Don’t like tipping? Don’t go to restaurants that expect it. For my part, I’m fine tipping at the local diner where I get table service, but I’ll go out of my way to go to the Dunkin’ Donuts that doesn’t have a tip jar.

  76. bobpence says:

    @tator: Sales tax in Houston is 6.25% state + 1% city + 1% MTA (public transit, I think). If you take the total of food items (include Cheesy Sprite) and the $1.98 “surcharge” and multiply by 8.25%, you get the sales tax charged. Its position is confusing, though, but Austin et al are getting their cut of the surcharge, about 16 cents.

    One way for Consumerist readers to protest is to go to Chachos with friends and each person pay separately with a credit card (objecting if they try to impose a minimum purchase requirement!). Typically the fee for a $100 transaction is far less than the total of the fees for ten $10 transactions.

    Oh, or you could just choose not to got there.

  77. PricklyPete says:

    The fact that it is called an “inflation surcharge” really pisses me off for some reason.
    They should just raise their prices and not add idiotic surcharges to the bill.

    I simply would not go to a place with an “inflation surcharge”

  78. verdantpine says:

    I double-checked, and Bobpence is correct about the sales tax rate.

    But if the sign states the surcharge is for cheese, then they have no legal ground to stand on, if they’re charging customers who only buy a soft drink.

    Another question is whether it’s legal under state law to ask a customer to pay tax for a separate food surcharge.

    There might be some leeway unfortunately — one of the Comptroller’s lawyers noted that it’s legal to charge hotel/occupancy tax on an energy surcharge, in a memo written back in 2001, [cpastar2.cpa.state.tx.us]

  79. Jesse says:

    @PricklyPete:

    If you raise prices, people buy less. So, this way you get to slap on the cost increase yet still make people think prices have stayed stable.

    I guess they are betting on people not noticing because for intelligent consumers, this practice should only work once since most will either buy less or not patronize the place anymore.

  80. FLConsumer says:

    @floraposte: Totally agree on the wording of the poll being incorrect. To me, raising the prices on the menus is the most honest, up-front approach.

    @Grrrrrrrrr: Absolutely. I HATE all of the extra surcharges & fees. The only exception are taxes. Unlike our EU & Northern neighbors, I want to have the taxes always broken out as separate charges. I wish they’d break it down a bit further, such as the 1/2% sales tax on all goods to pay for the #$%$# football stadium in Tampa and full disclosure of gas taxes (Federal/State/Local).

    The airlines & hotels are the worst on this. It also seems like the fancier the hotel, the more fees I see creep onto the bill. Also, why do the most expensive hotels charge for internet while the budget ones don’t? I don’t get it.

  81. milkcartel says:

    @Michael Belisle: If you think an inflationary storm is coming stockpiling cash would rank amoung the worst ways to prepare. The inflation would make your cash stockpile worthless. You’d want to stockpile commodities or some other asset, milk maybe?

    Personally I wouldn’t mind if all prices were broken down into their parts, then we could see how much certain inputs contribute to prices and what a store’s profit margins are. Of course the breakdown would have to be honest… so nevermind.

    The problem for airlines is that even if they wanted to advertise an all in one price if one of their competitiors didn’t they’d loose out by looking to be more expensive. Sadly this would confuse customers. It’s just human nature to be more interested in a $199 flight to London than a $495 flight even if it works out to be the same price. Classic prisoners dimlemma: airlines would be better off with an all-in-one price (happier customers) but for anyone airline it’s best to adopt the surcharge model (more traffic from ads etc) so all airlines use the surcharge method and the result is suboptimal (confused customers, wasting time searching).

  82. speedwell (propagandist and secular snarkist) says:

    @FLConsumer: why do the most expensive hotels charge for internet while the budget ones don’t?

    Because business customers, who tend to book hotels based on location and class of service, or who tend to rely on staff to book rooms, often overlook such a charge, and they’ll pay it without hesitation rather than be out of contact with home and office. They don’t particularly like it, but they pay it anyway because it’s an emergency.

  83. FLConsumer says:

    @speedwell: It’s not only the internet charges, but also the “resort charge” and other rubbish charges. These hotels are supposedly upper crust and claim to provide a high level of service.

    With regards to the companies which don’t check their bills closely (many NYC lawfirms would qualify), such companies deserve every penny they pay hotel internet/phone charges then.

    At my company they issue Blackberries w/EVDO tethering capabilities and laptops with EVDO modems to anyone who travels regularly. One single trip a month easily pays for the extra cost of mobile internet for everyone.

  84. abigsmurf says:

    This kind of practice is incredibly immoral and should be stamped on before it becomes popular.

    An ‘inflation surcharge’ if carried out by lots of chains will serve only to cause inflation to spiral out of control. People see prices everywhere rise very visibly by 7.5%, they go to their bosses and demand a payrise on those levels. Inflation goes up as a result, the surcharge rises to 9%…

    It’s a chain trying to take advantage of the situation at the expense of everyone else.

  85. johnfrombrooklyn says:

    @ChuckECheese: Here’s a simple solution. If you think they charge too much, don’t eat there.

  86. bonzombiekitty says:

    When it comes to restaurants, I’d rather have meals resized. They often already serve more than I should really eat, and I often end up eating it all just because it’s on the plate. If things shrunk, I don’t think my stomach would really notice.

    I don’t like the idea of a surcharge on food – particularly if they’re not upfront about it. The price listed should be what you pay.

  87. mookiemookie says:

    I live 5 minutes from this Chacho’s, and I can assure you that this bullshit has ensured that I will never eat there again.

  88. Starfury says:

    I haven’t see this happen at any places I’ve eaten out at here (SF Bay Area) yet…and we’ve been eating out a lot during our kitchen remodel. Once it’s done (1 week) we’ll be cooking more and eating out less. I hate paying $8-$10 for a burger and fries someplace when I can make one just as good (or better) at home.

  89. cerbie says:

    Raise prices, of course.

    Then, fix the Consumerist’s style sheet for poll results

    If portions are too big (here, they are for every Tex-mex place, but not Mexican), then that is a separate issue to be dealt with. If the portions were resized, that would just mean you pay an extra 7.5% of a smaller number.

  90. milkcartel says:

    @abigsmurf: Are you saying an inflation surcharge causes further inflation but simply increasing the price of goods will not lead to a wage-price spiral and therefore we should make inflation less noticeable so that consumers pay higher prices without asking for higher wages? Who’s side are you on?

  91. milkcartel says:

    In Ontario, where I live, it’s illegal for businesses to include a charge that isn’t for it’s stated purpose, try checking the law for your state if it really bugs you.

    The Consumer Protection Act guidlines state:
    >All charges in a contract must be what they say they are. For example, a business may not add a $20 surcharge for a “tax” that is not really for tax. Make sure you understand what each charge is for and that it’s valid.<

  92. vladthepaler says:

    Unless the “inflation surcharge” was clearly disclosed on the menu (or wherever prices are listed) I would flat out refuse to pay it. Also I heard on the radio last week that inflation is 5%.

  93. TheKeg says:

    Wait, nearly 25% of poll respondents are saying that the shrink ray should visit restaurants but complain when stores/manufacturers do this on products they buy?

    Interesting…

  94. zyodei says:

    Well, seeing how inflation is just another tax, I think this is great. It’s better to be out in plain site as much as possible – listed with other taxes.

    The Federal Reserve has caused this whole mess. We’ve inflated to pay for the wars, and have created this housing bubble in order to spur consumer spending as the fundamentals of our economy have collapsed.

    Now, as the housing bubble pops, the last great bubble – the housing bubble – is popping. The Fed is going to inflate it’s way out of this one, too, but it’s not gonna work. Batten down the hatches, it’s going to be a doozy.

  95. mdn says:

    What they really need to do is REDUCE the prices… like this:

    $ 1.00 – Beef Fajita Plate – Stkhs
    $ 0.15 – Small Sprite
    $ 0.90 – Pasto Tacos Plate
    $ 0.60 – PHShred Beef Nachos 1/2 Yellow Cheese

    $ 2.65 – Sub Total
    $ 0.24 – Tax

    $ 25.78 – 973% Inflation Srchg
    $ 28.67 – Order. Total

    Yeah, they make 1 less penny, but they can take that out of the dishwasher’s paycheck.

  96. bobpence says:

    @Karl: I always understood that banks were more likely to charge consumers when they use their debit cards AS as debit card than when we use them as credit cards, which entail a processing fee for the store.

    Apparently this is one more way Chachos screws their customers: Scaring them into using their card the way that costs Chachos less, regardless of whether it costs customers more.