A restaurant in California automatically charges guests 18% 'for service': customers are outraged

Vietnamese restaurant Pho Ha Noi in Cupertino is facing backlash on social media. The establishment automatically charged a “service” fee of 18% for tables consisting of one or more people, reports Fox11.

Photo: IStock

Pho Ha Noi has several locations in the South Bay.

Reddit user posted a photo on the platform channel, which shows a receipt from Pho Ha Noi in Cupertino dated September 8th. It states that 18% “for service” has been added to the bill.

The message at the bottom of the receipt read: “Price includes 18,00% service charge.” For groups of 1 person or more, a fee of 18,00% is automatically applied. If you have any questions, please contact a manager."

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“I've seen restaurants include a service charge when it's a big party, but never for parties of one!” — the user wrote in the caption to the photo.

The restaurant's policy shocked Reddit users. They left about 5000 comments.

“I would refuse to pay until they cleaned it up. It is illegal unless they inform you about it in advance. Once they take the 18% off, don't leave a tip, pay the bill and never come back,” one user wrote.

“Great way to lose customers,” wrote another.

Restaurant position

However, last year the restaurant appeared to notify diners of the rule change.

On November 10, 2022, the restaurant posted on Yelp that an 18% service charge would be added to all bills.

“The service charge is not a tip, but is used in part to supplement our employees' salaries, as well as to cover other employee and health insurance related expenses. Service charges allow costs to be more fairly distributed among all restaurant employees. Additional tips are appreciated but are not required. We are happy to waive the service charge if our service does not satisfy your needs,” read a sign on the door of a Cupertino restaurant last year.

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Regular customers at Pho Ha Noi in Cupertino say they've known about the automatic 18% since the rules changed last year.
“Either they include it in the menu prices, or it will be clear to the consumer where the money is going,” said customer Jonathan Hong.

The service charge is listed on the menu and there is a sign near the entrance.

Thousands of people commented on Reddit. Some have wondered why the restaurant is adding a per-person service charge, and the owners have an explanation.

“No matter what I do, I just want to serve customers better and retain good employees. Because if I don’t pay them well, they have the right to leave my restaurant,” said Helen Nguyen, co-owner of Pho Ha Noi.

Nguyen says they added the fee last November and 100% of the fee is used for employees. Owners say customers can ask to have the surcharge removed from their check if they are not satisfied with the service. However, they feel that people online who don't eat at their restaurant are unfairly criticizing them.

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“A lot of people are racist, calling my restaurant, yelling at my employees and asking us to close,” said Harry Nguyen, co-owner of Pho Ha Noi.

One Pho Ha Noi worker also said that because of the service fee, he will no longer have to work two jobs. The owners say they also provide health insurance, and other local restaurants also charge an automatic service charge.

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