Why Philly airport businesses adopted a new 3% surcharge

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Buying a cup of coffee at the Philadelphia International Airport just got more expensive for travelers already paying more at most restaurants and retail shops this year.

That’s because there’s a new 3% surcharge on the total cost of a transaction called an employee wage and benefit fee. The money goes directly to the business operator; it’s not a gratuity for workers.

It’s meant to offset higher operating costs and the new city-mandated minimum wage of $17.20 plus $4.57 an hour supplemental health benefit.

For a medium iced coffee from Dunkin’ Donuts, the total cost is $4.56 inside the airport: $4.10 coffee plus a 12-cent surcharge and 34 cents in tax.

For that same Dunkin’ Donuts coffee order, the total cost is $3.55 at a Philadelphia store, which is $3.29 coffee plus 26 cents in tax.

Philadelphia Department of Aviation executives negotiated the new surcharge with its concessionaire manager MarketplacePHL in March.

“We were hearing concerns from the operators, including the disadvantaged business enterprises, that they weren’t going to be able to meet the prevailing wage changes, the health and benefits,” said Heather Redfern, spokesperson for the city of Philadelphia Department of Aviation. “The money does not go to the airport.”

Businesses can charge up to 15% higher than average prices found in brick-and-mortar shops outside the airport — an increase from the previous limit of 10%.

“The cost and requirements of operating in the airport are so different from operating on the street,” Redfern said, citing an employee badging process as one example.

The 3% surcharge methodology is expected to be reevaluated every six months and could be increased.

About 83% of airport shops have adopted the surcharge — about 128 out of 153 locations. None of the businesses contacted for this news story responded to comment about the decision.

Airport officials say businesses are already charging similar employee wage and benefit fees at other airports, such as Los Angeles, San Diego and San Francisco.