Iowa restaurant receives backlash after adding 'inflation fee'
ANKENY, Iowa (WHO-13) — One Iowa barbecue restaurant is facing customer backlash after they noticed an "inflation fee" added to their bills.
Mark Odor is a regular at Jethro's BBQ, located at 1425 Southwest Vintage Parkway in Ankeny. But he says he got a bit of a surprise on the bill during his last visit.
"It's the lack of transparency that I find annoying," Odor said. "I get it, restaurants have small margins. If you raise prices a little bit, that's fine. I think people accept that — but when there's a lack of transparency and it's baked in as an 'inflation fee,' I think people are kind of trying to say 'No' to that."
Odor says most people understand prices increasing, especially with the rising cost of food, but when random fees start appearing, he can't help but wonder where that money is actually going.
"Does it go to the staff? Does it just go to the owner's pocket? Nobody knows that. I think people like to know what exactly 'inflation fee' means and where it goes," said Odor. "That's all I would ask is a printed poster or sign — or put it on the menu — and I wouldn't have nearly as much of an issue with it."
It seems Odor wasn't the only customer to have complaints about the unannounced inflation fee, Jethro's BBQ released a statement Thursday, saying in part:
We understand the concern with the 'inflation fee' that has recently been added to our guest checks. Jethro's acknowledges the word 'inflation' doesn't accurately describe the charge. After listening to guest feedback we have adjusted the wording to Market Surcharge to better support the meaning of the additional charge. It's important to note that Jethro's lowered pricing on many of our items when our new menu rolled out in November. Eggs have recently doubled in price, the cost of chicken has increased 50%, health insurance is up dramatically, and credit card processing fees have increased drastically. Rather than continuously raise menu prices as the market fluctuates we have added a market surcharge. This charge is intended to support not only the market fluctuations, but the many great benefits we offer to our staff...
Jethro's is proud to employ over 500 people and serve on average 3,000 guests daily. We have held off on adding any fees to our guest checks for years, while other businesses have had credit card fees and service fees for quite some time. With the volatility of the food industry in recent years we have come to the determination that a market surcharge is a necessary solution.
We appreciate the support of our many loyal guests and look forward to serving them for many years to come.
Heather Henderson, Jethro's BBQ Corporate Operations Manager
These fees may be new to some customers, but the FTC is monitoring fees and working on regulation efforts. The FTC proposed a complete ban of service fees and charges, but a December 2024 ruling is forcing them to re-outline their proposal.
The National Restaurant Association website says these fees are an attempt to keep menu prices the same and allow businesses to quickly adjust to the fluctuating market. They recommend restaurants who implement swipe fees and surcharges should remain transparent with customers by posting changes and updating customers when they make changes to these fees.