It was simple; I wanted to buy my spouse a box of chocolate on the way back from San Francisco. I found the type she like (Dark Chocolate with Carmel and Sea Salt) at a retail store at the airport.

The price said $19. 25. I ended up paying $25.92. That’s 35% more than the price on the box. Let me explain.

  • Box of Chocolate : $19.25
  • Tax: (9.6%)
  • Service Fee: $1.44 (7.5%)
  • Tip: $3.38 (18%)
  • Total: $25.92

They did not even ask me if I wanted to add a tip. They just added it automatically like a service fee and remember this is a retail store!

This all started during the Covid pandemic. Many retail businesses and restaurants added service fees to their prices because of increased costs. They even added the ability to tip at businesses that that used to where it never was an option.

Consumers were glad to pay these at the time because they were happy these places were still open and employees were taking the risk of coming to work.

Fast forward 5 years later. These automatic tips and fees still exist. Some don’t even go to the employee but are additional profit for the owners.

Now costs of business always go up. In the pre-Covid days, you raised prices. Now you raise prices and add service fees plus tips for your employees since they are not being paid in some case, minimum wage.

I would not be surprised if we see special upcharges for tariffs now. Breakfast places are doing it on eggs!

So what is a fairer way?

  1. I think the price displayed should be the price you pay; this is what it is in many parts of Europe. Add any taxes, tips, services fees to the price so I can see what it costs. I routinely go to restaurants where a $25 entree really costs $34 with all the added things.
  2. If your costs go up, raise your prices. I want every small business owner to make a healthy profit. Most customers will pay for value.
  3. Pay your employees a fair wage so the customer does not have to supplement it with tips and fees.

What do you think?