Washington Restaurant Receipts Turn Taxing: We Tell You Why

Washington Restaurant Receipts Turn Taxing: We Tell You Why

Washington residents are finding more fees on our restaurant receipts - including a credit card service charge - the restaurant's way of charging you for convenience.

Our bill is starting to resemble an end-of-the-year tax statement. The credit card fee can come on top of the tip and various service charges that an increasing number of restaurants are now charging.

Why?

Because your favorite restaurant, which already has a low-profit margin, is being charged (by the credit card company) for the transaction.

How much?

Paying with a credit card has become more common. And restaurants are trying to cover credit card fees. Forbes reported that Restaurants are charged a processing fee of anywhere between 1.5% to 3.5% for every transaction. The processing fee that the owners have to cover can even be much higher, up to 8%, if they do not have up-to-date point-of-purchase processing machines.

Think of the situation this way.

When you, the paying customer, pay your bill with a credit card, the restaurant gets dinged thousands of dollars every month.

Seven years ago, a typical restaurant saw only 50% of their customers paying for the bill with a credit card. Now, in 2023? 90% of customers pay with a credit card.

So why won't restaurants absorb the costs? As it stands, the food industry typically only takes in a small profit margin.

Hardly anyone is paying cash. A typical restaurant pays $30,000 to $50,000 in annual credit card fees - the amount a restaurant could pay a full-time employee.

The stiff credit card fee restaurants must pay is why more and more restaurants are adding a higher service fee.

Some states have passed laws stopping merchants from adding fees to credit card transactions, but Washington is not one of them. Five states where a credit card service fee is illegal: Colorado, Connecticut, Kansas, Maine, and Massachusetts.

INFO: Forbes