2% Surcharge... Really?

2% Surcharge... Really?

While walking through the San Diego airport recently, I stopped by a Jack in the Box (I know, a total gut-bomb) restaurant and noticed a sign that caught my attention. It read: "A surcharge of 2% will be added to the pre-tax sale of each transaction for staff recruitment and retention." At first, I wasn't quite sure what to make of it, but the more I thought about it, the more intrigued I became.

On the one hand, this surcharge could be a creative way for this Jack in the Box to help and retain its existing employees. By adding a small percentage to each transaction, the restaurant is essentially pooling together funds that can be used to invest in its workforce. This could mean things like higher salaries, better benefits, or improved working conditions. All of these changes could help the restaurant attract and retain top talent, which in turn could lead to better service for customers.

However, on the other hand, I wonder if this is a flawed approach for customers. After all, nobody likes to pay more than they have to, and a surcharge like this could be seen as a sneaky way for the restaurant to nickel and dime its customers. It's possible that some people might even choose to avoid the restaurant altogether if they feel like they're being taken advantage of.

I also wonder if this kind of surcharge could only work in an airport setting, where most customers are one-time visitors who won't be impacted by the surcharge in the long term. If this surcharge were to be implemented in a more traditional retail setting, for example, I think it's likely that customers would be more vocal in their objections.

Despite my initial skepticism, I do think there could be an opportunity for Jack in the Box to be transparent about how much money has been raised through the surcharge and whether or not it's working. Publishing what percentage is going to existing employees and what percentage is targeted to recruitment? They could post a QR-code right next to their sign that goes to a page they can keep up to date on their website showing the financial analytics. By publishing these stats on their website, the restaurant could build trust in this mandatory surcharge they came up with. As another example, they could share how much has been raised through the surcharge and what specific initiatives the funds are being used for. They could also share testimonials from employees who have benefited from the surcharge or customers who have noticed a service improvement.

I have three quick questions for my LinkedIn friends:

  • Have you ever seen a surcharge like this in another setting? How did it make you feel as a customer?
  • If you were a frequent traveler, would you be more likely to use a restaurant that implemented a surcharge like this, or less likely?
  • Do you think other businesses could benefit from implementing a similar surcharge, or is it too risky?

In conclusion, while the 2% surcharge for staff recruitment and retention at the Jack in the Box in the San Diego airport is a unique approach, it raises some interesting questions about the balance between helping employees and pleasing customers. By being transparent about the impact of the surcharge and actively engaging with customers, the restaurant could potentially turn this surcharge into a positive for everyone involved. I would love to hear Steve Cadigan take on this. Steve Cadigan do you think this is a good approach, do you think we are going to see more of this in the future, do you think this HR matter should fall on the shoulders of the customer? I look forward to hearing everyone's take on this...

I'm all for organizations investing in their people as the people are their greatest asset. I think that should be rolled into the overall cost of doing business and not listed as an adder. I also find the message on this sign to be pretty arbitrary as "staff recruitment and retention" doesn't tell me much. Do they get paid more? Do they receive a signing bonus? Do they receive health insurance as a benefit? I'd rather see something that describes the benefits their employees receive. I would think that would be a great way to attract and retain employees.

I saw similar signs in my town after the minimum wage increase. It seemed like the business owners wanted to differentiate what cost was being added to cover the I creased labor cost rather than just raising the prices. I found it a bit odd. Why not roll the new cost of doing business into the price directly?

It is a cost of being in business and as such should be incorporated in the price. As surcharges are generally for extraordinary events or requests, and recruitment and retention are and should be an ongoing process, this makes no sense, except as you say as a way to raise prices 2% without showing on the menu sign.

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