Hawaii attorney sues over popular chain’s $2 ‘inflation fee,’ calling it deceptive
HONOLULU (HawaiiNewsNow) - A respected consumer attorney has filed a lawsuit against a popular chain over the way it’s trying to deal with inflation.
It’s not a lot of money, not nearly enough to cover 6-7% inflation, but Romano’s Macaroni Grill has charged a $2 “inflation fee” since the spring.
While the chain said that was to avoid rising prices, the lawsuit says it’s unfair and deceptive — there may by lawsuits ahead for other restaurant fees as well.
Macaroni Grill faces many of the same cost pressures as all restaurants — higher labor, energy and food costs.
But when the chain added the $2.00 “temporary inflation fee” some customers were mad enough to call lawyers, like veteran Honolulu consumer attorney Brandee Faria.
“People do not notice it, and they just get away with paying it,” Faria said. “It’s just really very deceptive and unfair, both because it’s unnecessary.”
Faria says the best way to account for higher costs is to raise menu prices to cover them.
Her class action lawsuit says the fee was not disclosed in the restaurant, by servers or on the menu, and only showed up as a menu item on receipts.
The lawsuit said the restaurant website did include an explanation that said because higher costs may be temporary, a temporary fee was better for the customers.
The clarity of disclosures is not the only standard to avoid being considered an “unfair and deceptive” trade practice, according to the Director of the Hawaii State Office of Consumer Protection Stephen Levins.
“If a business is going to do that, they need to be upfront, they need to be transparent,” Levins said. “And the actual so-called fee that they’re charging needs to correlate with some semblance of reality.”
Levins explained that an added fee must actually line up with the specific cost its meant to cover.
For example, a fee to cover temporary increases in energy costs, labelled an “energy fee”, must in fact be based on the actual increase, and not just “pulled out of a hat.”
Hawaii News Now was unable to reach the parent company of the restaurant. But after complaints from all over the country they may have stopped charging the fee. A look at the on-line ordering site showed no sign of the fee and a purchase of spaghetti and meatballs at Macaroni Grill at Ala Moana Center had no added fees.
Meanwhile, inflation and wage pressure is leading other restaurants in Hawaii to add fees — some called kitchen or dine-in fees.
The Hawaii Restaurant Association said along with inflation members are adjusting to recent minimum wage increases, which actually widened the pay gap between tipped servers and workers in the kitchen.
“You know, they can’t lose money and stay in business,” said prior HRA Chairman Tom Jones. “So this is one way that restauranteurs can do that by adding a kitchen service charge.”
But Levins and Faria said restaurants must be very careful about those feels to not run afoul of consumer protection laws.
“This inflation fee and these kitchen fees and kitchen service fees. They’re all improper,” Faria said. “And there’s not a law that says they’re improper, but they fit the classic, unfair and deceptive trade practice model.”
Faria said she probably wouldn’t sue a restaurant that makes the fee very clear in advance.
Levins said customers who still feel deceived can complain to the Office of Consumer Protection. They would look at how the fee was presented to the consumer when it was given.
Jones agreed customers should always be informed of any fee in advance.
“The Restaurant Association recommends that restaurants clearly inform their customers, which means, you know, posting signs in the lobby, making sure that it’s clear on the menu and large enough print for people to see.”
The Macaroni Grill lawsuit is a class action, which means anyone who paid the fee could join as a plaintiff, but Faria agrees participating will not get consumers much compensation, other than stopping other restaurants from doing it.
“If we can make them change, or make them change their menus and change their disclosure practices, then that saves people in the state of Hawaii a lot of money over time,” Faria said.
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