Why a Greenville Avenue Restaurant Group Has Added a 3% Surcharge to Tabs

A pair of Greenville Avenue restaurants in Dallas started off 2023 with a new fee tacked onto customers’ bills.

The owner of Rye and Apothecary in Lowest Greenville says the change comes due, in part, to the rising cost of food and health care.

Tanner Agar hopes the community is willing to chip in to ensure his employees are happy and healthy.

Instead of quietly raising prices without offering a reason, Agar says he wants to be transparent with customers.

“While we could raise our prices and we could just offer it, we could bury it, coming to Rye is a choice,” he said. “People are choosing to support us and that doesn’t just mean the business, the industry, the individuals, the people who are here. You’re choosing to support us.”

Each bill now includes a 3% surcharge labeled "employee health and benefits."

“I was surprised but very delighted,” said customer Randall Wilkinson. “I’m a business owner for 35 years and we take good care of our employees and I think that’s very important.”

The surcharge will go toward the employee benefit fund that includes health insurance and paid time off, says Agar.

There are QR codes featured on menus detailing the effort and where the money goes.

Agar says the cost of offering health care had previously been too costly but has now opted to offer Blue Cross Blue Shield health care plans to his employees in 2023.

The surcharge, he says, is for customers to benefit from an even better dining experience.

“This is the morally right thing to do for our team, which I also believe makes sense as a business because people will do a better job when they’re better taken care of,” said Agar.

Agar has expressed concern about any possible backlash to the new addition but has had positive feedback during the first six days of the policy.

“I thought it was very interesting,” said Carlos Martinez, Processor of Economics at Dallas College. “It’s occurring against a backdrop of a very tight labor force.”

Martinez points to the most recent unemployment report that suggests 2023 will be another tough year for small restaurants already faced with razor-thin profit margins.

Small businesses will also have to contend with increased borrowing costs, consumers looking to spend less and an ongoing labor shortage.

“[Small restaurants] are competing against other companies that can offer benefits, so if they don’t figure out a way to offer these benefits, they stand to lose,” he said.

Martinez also points to census reports that show Texas leads the nation in the number of uninsured people.

Cities like New York and Chicago have implemented similar surcharges in a more official position.

“I think the best opportunity for this to succeed are the small neighborhood restaurants that are really ensconced and part of the community,” said Martinez. “Where people can see and know who these employees are.”

Agar says he expects to face their first real test this weekend. He hopes it spreads industrywide.

“The guest will be the ones who decides if it happens industrywide because guests will support it. But one day, guests will demand it. And when guests demand it of restaurants, then the change will happen.”

Agar says if a customer is upset and refuses to pay the 3% surcharge, they’re willing to remove the charge.

He just hopes it doesn’t come down to that.