Service Fees

L

leighwebb

New Member
Jurisdiction
Kansas
Is it legal for a small business to charge a 10% service fee in Kansas? Customers aren't informed. When they notice it and ask what that fee is, they are told that it is to make up for shipping costs and such going up, that it is in lue of raising product prices.
 
leighwebb said:
Is it legal for a small business
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What kind of business?

leighwebb said:
to charge a 10% service fee in Kansas?
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Service fee for what?

leighwebb said:
Customers aren't informed.
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Then how do they know? When and how do they find out?

leighwebb said:
they are told that it is to make up for shipping costs and such going up, that it is in lieu of raising product prices.
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Then hand the product back, leave the store, and expose the practice on Yelp, YP, and Google review sites.
 
I have heard of restaurants doing this but not retailers. The problem at a restaurant is that customers don't find out about it until after they've eaten. The term is referred to as "fee-flation" if you want to find articles on it, and as AJ pointed out the only way to find out which businesses are doing it is to check their online reviews.
 
adjusterjack said:
What kind of business?



Service fee for what?



Then how do they know? When and how do they find out?



Then hand the product back, leave the store, and expose the practice on Yelp, YP, and Google review sites.
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A pet shop. They sometimes notice it on the receipt that is texted to them. I actually work for the store and I feel like it is illegal. It was just last year that charging up to 4% in fees to cover the cost of running a debit or credit card was made legal, so I have a hard time believing this is.

An employee recently forgot to add the charge and the owner said that he's going to take it out of his pay. I want to find out if what he is doing is even legal.
 
retic said:
I have heard of restaurants doing this but not retailers. The problem at a restaurant is that customers don't find out about it until after they've eaten. The term is referred to as "fee-flation" if you want to find articles on it, and as AJ pointed out the only way to find out which businesses are doing it is to check their online reviews.
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I know that this business is doing it because I work there. I don't think it's right. An employee recently forgot to tack on the 10% "service fee" and now he said he's going to take it out of his check. I don't think that is legal in the first place, so I want to find out for sure so I can point it out. The thing is, he raises prices anyway, so it isn't even really in lue of raising prices. He just claims that.

Thank you, I'll look up "fee-flation".
 
leighwebb said:
A pet shop. They sometimes notice it on the receipt that is texted to them. I actually work for the store and I feel like it is illegal. It was just last year that charging up to 4% in fees to cover the cost of running a debit or credit card was made legal, so I have a hard time believing this is.
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This is not a charge for using a credit card.

An employee recently forgot to add the charge and the owner said that he's going to take it out of his pay. I want to find out if what he is doing is even legal.
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Withholding pay to cover the missed service charge is NOT legal in Kansas:
Statute | Kansas State Legislature
 
leighwebb said:
Is it legal for a small business to charge a 10% service fee in Kansas?
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In the abstract, and without any relevant facts whatsoever, the only possible answer is yes.

leighwebb said:
Customers aren't informed.
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That may be an issue. Why don't you provide a bit of a narrative about what's happening and answer all of the questions that "adjusterjack" asked in the first response in the thread (although maybe those questions aren't really relevant)?

leighwebb said:
An employee recently forgot to add the charge and the owner said that he's going to take it out of his pay. I want to find out if what he is doing is even legal.
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Since this doesn't appear to involve you, it's none of your business, but it now sounds like your concern is the employer's threat to take the money out of the employee's paycheck, rather than the legality of the "service fee."

leighwebb said:
I don't think that is legal in the first place, so I want to find out for sure so I can point it out.
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Do you really think that interjecting yourself into a dispute between your employer and another employee is a good idea? What are you going to do: tell your boss that some anonymous strangers (none of whom are in Iowa, by the way) on thelaw.com said it's not legal?
 
zddoodah said:
Do you really think that interjecting yourself into a dispute between your employer and another employee is a good idea? What are you going to do: tell your boss that some anonymous strangers (none of whom are in Iowa, by the way) on thelaw.com said it's not legal?
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Kansas law is actually what says it's not legal.
But, that's just me being a bit pedantic in my response to you ;). The fact of the matter, as you alluded to in your post, it's really a bad idea for the OP to insert herself in the middle of this. The OP could quietly point out the law that makes such things illegal, but getting in the middle of it is a bad idea.
 
adjusterjack said:
Are you saying that the service fee is somehow concealed from the customer at time of purchase?
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It isn't really concealed per say. The store uses Square Up, at least I think that's what it's called. He used to have it in there as an automatic setting, like in the area where taxes are taken out, but he made it so that we have to add it to each purchase, as if it is an item. We're expected to just track it on there and only address it if they notice.
 
zddoodah said:
In the abstract, and without any relevant facts whatsoever, the only possible answer is yes.



That may be an issue. Why don't you provide a bit of a narrative about what's happening and answer all of the questions that "adjusterjack" asked in the first response in the thread (although maybe those questions aren't really relevant)?



Since this doesn't appear to involve you, it's none of your business, but it now sounds like your concern is the employer's threat to take the money out of the employee's paycheck, rather than the legality of the "service fee."



Do you really think that interjecting yourself into a dispute between your employer and another employee is a good idea? What are you going to do: tell your boss that some anonymous strangers (none of whom are in Iowa, by the way) on thelaw.com said it's not legal?
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I answered all of adjusterjack's questions, so I'm not sure what else I'm supposed to say. It is in Kansas, not Iowa. Maybe I selected Iowa by mistake...?

The employee he is doing it to is my significant other, who stepped in when I got long COVID and couldn't work. I still haven't been able to actually go back due to issues with my heart that I have had since. I now do remote stuff, making order lists, tags, etc. If he hadn't stepped up, that shop would have gone under during the pandemic. He has been doing everything that I did to keep the shop going, when no one else has ever been willing to take care of things the way they should. Even if the employee weren't my significant other, I would say something, because it isn't right and employees should be treated better than that. I wanted to keep that information private, in case he somehow saw all of this. I was being vague to protect us, but here we go.

If he is going to threaten to dock pay and treat someone badly for not doing something that is illegal in the first place, I am going to call him out.

I came here because none of my searches, no matter how I worded it, came up with any sort of answer.

He has an accountant who did try to get him to just changed the prices instead of doing the fee, but now she is encouraging his behavior. That is why I had thought it must be legal for so long, I thought that, otherwise, she would tell him that what he is doing isn't.

However, a customer there had recently asked why her business was being advertised in the shop. The shop owner had given her "shares" and advertises for her for her services. I don't know if any money changes hands at all or not. Anyway, the customer warned that we need to be careful, because she had done some shady stuff when she was his accountant and he actually paid her. He competely lost his business because of it and is still dealing with the fallout.

That and the recent events made me look elsewhere for answers. The "service fee" was something that had bothered me from the beginning, which I had voiced to him. He got the idea from noticing that there was a service fee on a recipient from a food delivery, which seemed to be more because they delivered it. I never noticed the fee when I picked up food from there.
 
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Zigner said:
Kansas law is actually what says it's not legal.
But, that's just me being a bit pedantic in my response to you ;). The fact of the matter, as you alluded to in your post, it's really a bad idea for the OP to insert herself in the middle of this. The OP could quietly point out the law that makes such things illegal, but getting in the middle of it is a bad idea.
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I mean, it is my business, because he is doing it to my significant other and that affects our livelihood, which I wanted to keep private. However, why should I let him do it to someone else? Who's to say he won't do something like that to me? This shady shit would still effect my livelihood, because it puts everyone who works there at risk.
 
leighwebb said:
Is it legal for a small business to charge a 10% service fee in Kansas? Customers aren't informed. When they notice it and ask what that fee is, they are told that it is to make up for shipping costs and such going up, that it is in lue of raising product prices.
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UPDATE: The owner said that he is taking the amount from the check. When he was told that it was illegal, he said that he'll take it out of tips and stuff. My SO walked.
 
adjusterjack said:
Maybe it's time for you and your significant other to seek employment elsewhere.
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Yeah, we've been talking about it. He actually walked out about ten minutes ago because the owner said he was going to take it out of the check. My SO told him that is illegal, so he wasn't to the questionable accountant and then came back and said that he'll take it out of his tips.
 
adjusterjack said:
Either way, tips or check, it's illegal and your SO can file a wage claim with the state.

Wage Claims and Hearing Procedures - Kansas Department Of Labor (ks.gov)

Your SO should also file for unemployment. Quitting due to an illegal act of the employer might qualify.

Anything your SO can do to bring some heat down on this crook, should be done.
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I don't disagree that the employer is scum...but quitting before anything actually happens puts the employee in a bad spot. SO will likely be unable to claim unemployment insurance based on this.
 

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