Xiao Bao Biscuit’s low-brow yet refined style of cooking has been winning over diners for years. The Asian spot has been slinging cabbage pancakes, spicy tofu dishes, and as recently uncovered by a Post & Courier tip, “convenience fees” on all food and drink. This had been happening both at XBB and their recently opened and wildly popular project, Tu. Since the P&C article was published, co-owner Josh Walker first assured customers he would label the fee and later resolved to remove it altogether.
It’s unclear how long this deceptive fee had been appearing on diners’ checks, but a customer recently told the P&C that a 13.5 sales tax was added to her lunch bill at XBB. P&C also states that 3 bills at Tu were increased with that same fee. Charleston county’s standard legal sales and hospitality tax on restaurant bills is 11 percent, meaning this 2.5 percent discrepancy is technically illegal.
Convenience fees are generally added to bills to cover the cost the restaurant incurs for accepting credit card payments. Major credit card providers set guidelines for this fee: it must be “a flat or fixed price” and “must also be clearly disclosed.” Neither was the case at XBB and Tu – the fee was lumped into a percentage and was not clearly marked as distinct from sales tax.
When asked for comment by the P&C, Walker remarked that this fee “is becoming standard industry practice” and that he intended to work with his point-of-sale provider to “clearly label the fee to eliminate confusion.” In a further statement on Instagram after receiving some backlash, Walker let his followers know about the removal of the 2.5 percent fee.
Walker further discusses the point-of-sale system in question, revealing many “restaurants in town” are clients. This specific service allegedly advocates “the client’s right to charge a convenience fee.” Based on this, it is likely that Xiao Bao Biscuit and Tu are not the only restaurants in Charleston following this practice.
What does this mean for Xiao Bao Biscuit and Tu? Charging customers an extra fee without disclosing it is dubious, but their decision to remove it allows an opportunity for the diner to trust them again. However, XBB defended this practice in their Instagram post before telling their audience they had removed the fee. Walker claimed that “fees have risen and larger corporations are implementing such practices,” and this therefore necessitates “small business owners like us” to “protect themselves as well.” This argument rings hollow, as the customers that allowed this small business to find success have found themselves betrayed by the restaurant. Offsetting the costs of operating doesn’t immediately necessitate pulling one over on your customers. However, this isn’t a blanket condemnation of XBB, as everyone deserves a second chance. It’s rather an opportunity for them be more consistently upfront with their customers that they claim to hold so dearly.
As for other restaurants potentially involved in this practice, information is not yet available. To make sure extra charges aren’t being tacked on to checks elsewhere, diners are advised to check all receipts from recent restaurant trips. If you see anything suspicious in your charges, it’s recommended that you contact the South Carolina Department of Revenue.