Can Restaurants Raise Prices for Food Delivery?
Food delivery apps are more popular than ever before. Demand has skyrocketed, especially since people are stuck at home and generally do not feel comfortable dining out. However, as Economics 101 teaches us: when demand goes up, prices go up, too.
However, demand is not the only factor that’s inflating delivery prices. Many delivery apps charge restaurants fees on each order, cutting into their profit margins. In the cut-throat world of foodservice, margins are already quite low, so these fees pose a problem.
Many restauranteurs have turned to a simple solution to combat food delivery app fees - inflating prices.
But, can restaurants raise prices for food delivery? Is it legal?
Let’s find out!
The short answer - Yes, but with conditions
I know -- you hate hearing vague answers like this, but there is some nuance required to understand the issue.
In the past, some apps forbid businesses from charging a premium on items. These policies were likely instated to ensure ordering apps stayed competitive relative to dine-in and takeout dining options.
However, some apps have loosened these restrictions due to the countless stay at home orders in effect across the globe. On the National Restaurant News podcast, one business owner said restaurants can now raise prices on meals to offset delivery app costs. For example, a taco that costs $1 in-store might cost $1.50 on a third-party app.
That said, these apps reportedly put some restrictions on this practice. While it is totally fine to inflate your prices to offset costs, you must do it across all apps. If you sell a $10 taco on Grubhub, you must also price it at $10 on Postmates. These policies ensure no app has an unfair advantage.
What about using your own food delivery platform?
Restaurants who want total control over their pricing might struggle to use third-party apps. Raising prices on all apps could harm sales, especially if demand varies across apps.
Say hello to Epos Now Order & Pay - our unique online ordering platform.
What is Epos Now Order & Pay?
Epos Now Order & Pay is a mobile ordering system, designed exclusively for Epos Now. Your customers can browse your menu, and order and pay for pickup or delivery right from their mobile phones.
Since all orders go through your POS system, all delivery requests go straight to your receipt printer or kitchen display screen. On top of this, each order will be tracked against your inventory so you get up-to-date stock levels at all times.
Epos Now Order & Pay is not only meant for delivery. Customers can place online orders and select a pickup time for fast takeout service.
You can also use the app in your restaurant to improve order accuracy and reduce wait times. Customers can order and pay from their tables, so your servers spend less time logging sales at the point of sale. This also reduces contact between servers and customers, helping you offer a contactless experience.
Learn more about Epos Now
Epos Now provides point of sale systems that streamline restaurant operations. We offer mobile, tablet, and computer systems, all accessible from the cloud.