Reddit Erupts Over Service Charges and Fees at LA Mexican Restaurant

A prominent Downtown Los Angeles restaurant has come under fire this week for its service charges and added gratuities. People on Reddit and Yelp are calling out Pez Cantina, the upscale casual Mexican restaurant on Bunker Hill, after someone posted a photo of a bill that seemed to miscalculate a total and charge an inflated service fee.

The Reddit post in question is dated to Sunday, July 7. That’s when Pez Cantina offers its weekend all-you-can-eat brunch buffet, complete with add-ons for bottomless margaritas, mimosas, and the like. The unnamed diners apparently sprung for the $35 per person buffet, adding in two higher-end $16 margaritas.

Now here’s where things get tricky. Per the receipt, the bill should come out to $102, but the receipt’s subtotal of food and drink actually rings in at $106. The restaurant also added an 18 percent automatic gratuity (tacking on another $19 or so) despite claims on its website that they add an auto-gratuity of 15 percent. (Note: the practice of adding an automatic gratuity is somewhat common around the industry these days. Charging an incorrect percentage, however, is not.) After all this comes a 5% “kitchen charge.”

One user writes, “It’s a 15% auto-gratuity, not 18%. Auto gratuity for a buffet,” while another commenter mentions the multiple charges, “Auto gratuity is for large parties usually. OP [original poster] only had two people. Also 18% on a buffet where you get your own food and drinks is absurd. Eff this place.” Finally another makes a point how the burden of paying employees seems to be pushed to diners, “Restaurants should pay their staff a real wage instead of forcing them to rely on the generosity of their customers.”

When reached for comment, Pez Cantina chef/owner Bret Thompson said the restaurant’s point of sale system erred in not itemizing out a $2 per-drink upcharge for requested “nice alcohol.”

When asked about the discrepancy between the 15% mandatory gratuity listed on the company’s website and the 18% that made it onto the bill, Thompson says that the server must have keyed in the gratuity incorrectly; it should be 15%.

And then there is the 5% kitchen charge, which has become more common around Los Angeles these days, though it’s sometimes described as a healthcare surcharge at places like Alameda Supper Club .

Here’s how the Pez website explains it:

As an alternative to a significant menu price increase, we have decided to implement a 5% kitchen appreciation charge which will greatly increase the pay and benefits for kitchen employees. Please inform your server if you would like to remove this 5% from your bill.

Thompson says diners can find the language on every menu, and the information is also communicated by the servers to the diners directly.

Meanwhile, the Reddit post has racked up over 690 comments in just one day. Over on Yelp, some customers have also been complaining about the fee structure of the restaurant. Thompson says that they have reached out to the customer in question and offered them a free meal for the issues presented on the bill.

The addition of service charges, kitchen tip lines, appreciation percentages, and/or mandatory gratuity have been a part of the greater Los Angeles dining scene for years. Some restaurants — like the former Barcito or the now-closed Journeymen — use mandatory service charges in lieu of tips. The surcharge can serve as a way for ownership to more evenly distribute tips to both front and back of house staff members — since the back of house receives little to no tip in classic restaurant structures.

Other spots like Republique and Bavel charge smaller fees in the 3% to 5% range, meant to offset healthcare for workers. Like Pez, these restaurants usually offer an out for customers who don’t want to pay the fee.

Clearly there is no standardized system to tackle all the inherent issues with restaurant compensation. Many operators know that building in better pay and healthcare for all staff members would drive menu prices up so much that it would kill business.

Operators also say that they feel squeezed by high rents, rising minimum wage, and increasing food costs, in addition to the already notorious thin margins found in restaurants.

Pez Cantina. 401 S. Grand Ave., Los Angeles, CA.

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