Consumer attorney files suit against popular restaurant chain for ‘deceptive’ inflation fee

HONOLULU (HawaiiNewsNow) – A respected consumer advocate 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 been charging a $2.00 “inflation fee” since spring.

While the chain said it was to avoid rising prices, the lawsuit says it’s unfair and misleading — lawsuits over other restaurant fees could also be pending.

Macaroni Grill faces 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 angry enough to call lawyers, like veteran Honolulu consumer advocate Brandee Faria.

“People don’t realize it and just get away with paying it,” Faria said. “It’s just very misleading and unfair, both because it’s unnecessary.”

Faria says the best way to account for higher costs is to increase menu prices to cover them.

Their class action lawsuit states that the fee was not disclosed in the restaurant, by waiters, or on the menu, and only appeared as an item on receipts.

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The lawsuit says the restaurant’s website included a statement saying a temporary fee was better for customers because higher costs could be temporary.

According to Hawaii Consumer Protection Agency director Stephen Levins, clarity of disclosures is not the only standard to avoid being considered an “unfair and deceptive” trading practice.

“If a company is going to do that, it has to be open and transparent,” Levins said. “And the actual so-called fee they charge has to correlate with some semblance of reality.”

Levins explained that an additional fee must actually match the specific costs it is intended to cover.

For example, a fee referred to as an “energy surcharge” to cover temporary increases in energy costs must actually be based on the actual increase and not just “pulled out of a hat”.

Hawaii News Now was unable to reach the restaurant’s parent company. But after complaints from across the country, they may have stopped collecting the fee. A look at the online ordering page showed no trace of the fee, and a purchase of spaghetti and meatballs at Macaroni Grill at the Ala Moana Center had no additional charges.

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Meanwhile, inflation and wage pressures are causing other Hawaiian restaurants to charge — some are called kitchen or dining fees.

The Hawaii Restaurant Association said members, along with inflation members, are adjusting to recent minimum wage increases, which actually widened the pay gap between tip waiters and kitchen workers.

“You know, you can’t lose money and stay in business,” said former HRA chairman Tom Jones. “So this is one way restaurant owners can do that by adding a fee for kitchen service.”

But Levins and Faria said restaurants have to be very careful about those sentiments to avoid violating consumer protection laws.

“That inflation fee and those kitchen fees and kitchen service fees. They’re all inappropriate,’ Faria said. “And there’s no law that says they’re unreasonable, but they fit the classic, unfair and deceptive trade practice model.”

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Faria said she probably wouldn’t sue a restaurant that makes the fee very clear upfront.

Levins said customers who still feel cheated can complain to the Consumer Protection Agency. They would look at how the fee was presented to the consumer when it was given.

Clients contracted with Jones should always be informed in advance of any charges.

“The Restaurant Association recommends restaurants to clearly inform their customers, which means, you know, putting up signs in the lobby, making sure it’s printed clearly on the menu and big enough for people to see.”

Macaroni Grill’s lawsuit is a class action, meaning anyone who paid the fee can join as a plaintiff, but Faria agrees that participation won’t bring consumers much compensation other than preventing other restaurants from doing so.

“If we can get them to change their menus and change their disclosure practices, that will save the people of the state of Hawaii a lot of money over time,” Faria said.

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