Mistakes: Thinking small about fees

Scott White, The BIG Kahuna, shared a story of a small business mistake:
Last night my wife and I went to a birthday dinner at one of the nicest St. Thomas restaurants. We really happen to like this restaurant. There were 8 of us in total. The food was fantastic. The service was white glove.
What could go wrong? Read the rest of the story at Thinking Small, then come back. Don't forget to read the comments, too!

(humming the Jeopardy! theme while I wait for your return...)

Unhappy hot potWelcome back! What do you think? Was the restaurant right? Were the eight customers right? How do you think the restaurant should have handled it?

My solution? Instead of an extra fee, I'd love to see them provide a bonus dessert or gift to the group. How about a gift certificate for a future visit? Yes, I know they didn't buy the cake there, but then you'd have eight new evangelists singing your praises all over, instead of eight disgruntled people grumbling about you to everyone they meet. Is that worth the $40?

By the way, to the commenter at Scott's who said these fees are common and therefore OK, I couldn't disagree more. If these fees are so common and so unpleasant, they represent a terrific opportunity to make your business stand out by not nickel-and-dime-ing your customers to death.

Photo: unhappy restaurant hot pot, Lima, Peru, by Becky McCray.

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Posted by Becky McCray on Tuesday, December 23, 2008
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9 comments:

  1. They should not have let the cake be brought in in the first place, then they should have given them a complimentary desert. Bringing in outside food is a danger to the restaurant's heath record what if someone got sick?
    ReplyDelete
  2. 1.if they were going to charge a fee, it should be stated on the menu or they should have been told when they came in with a cake.

    2. they shouldn't have charged the birthday person (the reason they had a group come in and spent $800) OR anyone else who hadn't eaten cake.

    3. The restaurant should have comped some apps or drinks off their bill in addition to removing the fee.
    ReplyDelete
  3. It doesn't matter if the restaurant was right to have been able to charge. For a measly $40 it sounds like they lost regular customers who are willing to pay $100 per meal.

    The restaurant lost.

    The problem for this business is that they made the mistake of trying to win the battle at the expense of losing the war.

    What if nobody had asked them to remove the charge? Would any of those folks returned to the restaurant? Will they anyway? They feel slighted and ripped off.

    Business owners often forget that people do business with people they like. This is a restaurant, it's a pleasure activity. To make $40, the restaurant might have lost customers for life.
    ReplyDelete
  4. There is wrong to be shared on both sides. Restaurant customers should NEVER assume that bringing outside food to a restaurant is appropriate. However, a restaurant owner should focus on pleasing the customer as long as it does not impact positive cash flow.
    ReplyDelete
  5. Thanks, all, for the discussion. Lynn makes a good point that even if they were in the right, the restaurant has lost.

    I'm a hater of tacked-on fees, in any type of business. Try to include as much as possible in the price. Every added fee, every extra charge, is a potential irritant to your customers.
    ReplyDelete
  6. I agree with you Becky. Regardless of how "common" fees are, I still look at a menu and see a price for my common soda. I know what to expect. When something isn't on the menu, they should be informing me of the cost. It's called communication.

    At many restaurants groups of 6 (choose your integer) or more get charged a gratuity and that fact is listed on the menu. If it's not, the server generally communicates that up front. This situation feels like a credit card with hidden charges that they hope you'll just pay and gloss over.

    The restaurant should have communicated up front when handed the cake that there was a charge for this extra service.
    ReplyDelete
  7. I must make a defense here for a bill/statement containing item by item charges.

    I prepare tax returns under one of my business hats. In order for any portion of my bill to be deductible on a tax return (according to the IRS rules), it must be itemized as to the charge for each form, group of forms or other service.

    So, extra charges, separately stated can sometimes be a good thing.

    Overall, though, I agree with that tacked-on, after-the-fact fees are generally irritating and not a good idea.
    ReplyDelete
  8. A little late to this party but...

    I'm a big believer in going the extra mile. My wife & I started a business this year, and we get the biggest kick out of giving those little unexpected extras. We'd rather have our customers thinking they received more than what they have paid for rather than the other way around. We want them to be wowed and surprised by the excellence of our work.

    Maybe we're just new at this and naive, but we believe the long term goodwill we are building will pay dividends over the long haul.
    ReplyDelete
  9. Kim, I'm sure they do hope customers will just gloss over it. Not a good idea!

    Maesz, of course you're right about itemizing your fair and reasonable charges.

    Bill, welcome to the party! I think you've made the right choice. Invest in that goodwill.
    ReplyDelete

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