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City protects struggling restaurants from excessive fees; secures refunds for Gresham businesses

February 11, 2021

Gresham restaurants that were overcharged credit card processing fees between Nov. 25, 2020, and Jan. 29, 2021, will be refunded the entirety of the money they were overcharged – an average more than 4% of their revenue – per the City’s settlement with a third-party food service delivery app.

Gresham’s restaurants have been hit particularly hard by the pandemic,” said Gresham Mayor Travis Stovall. “While we’re thankful for the platforms that allow our residents to continue to support our local businesses through delivery service, it’s important to ensure that the fees aren’t so onerous that they hurt our restaurants. The City is committed to continuing to advocate for our businesses that are struggling.

In July 2020, in response to the COVID-19 pandemic, the City implemented a temporary 15% fee cap on charges from third-party, app-based food delivery platforms.

Under the cap, the total fees charged to Gresham restaurants, including credit card processing fees and any other fees, cannot exceed 15% of the purchase price of the order.

Last fall, the City learned one of the platforms was charging restaurants credit card processing fees in excess of the cap. The City swiftly acted and issued civil penalty warnings in November 2020. When the matter was not resolved, the City filed a lawsuit and was successful in securing a settlement. The third-party app has agreed to adhere to the 15% cap going forward.

A business that sells an average of $250 per day using a third-party app will see a return of about $650 from the nine-week period when the fee cap violations occurred.

One business owner said, “This is a significant relief because $650 is almost 43 hours that I could have had an employee employed.”

The City will continue to take enforcement action against platforms that violate the fee cap for the duration of Gresham’s Local State of Emergency. If businesses are assessed a fee over 15% of the purchase price  of any order by any food delivery service after July 21, 2020  please report the violation to the City of Gresham.

Documents

Report a violation

To report a violation, email Jessica.Harper@GreshamOregon.gov or call 503-618-2869. The City requires the following information:

  • Business name
  • Food delivery service name
  • Date and amount of violation
  • Documentation (receipt or screenshot) of the violation

The City’s emergency action that took effect July 2020 also protects the delivery drivers working for these platforms, often local residents, by prohibiting the platforms from reducing the compensation paid to drivers or garnishing their gratuities.