Corking Fees: Why They Make us all a Little Twitchy
Hey, it’s Lyra here.
I’ve had a few people ask if we’re going to keep the corking fee we charge for opening retail bottles at the shop. The answer is yes, but before you close this window in abject disgust for what may seem to be my greedy ways, would you give me a chance to explain?
Rather than just answer your question and leave it at that, I’m hoping that there are some people out there who would like to know more about why this is standard practice. Because it seems to be a sensitive subject that really polarizes business owners of shops like ours and some would-be patrons. I understand that I’m not going to convince everyone, or maybe even anyone, but I’d like to give it a try.
Now, I’m assuming that people dislike it so much because it either seems pointless or like I’m taking advantage of my customers. If there are other reasons, please tell me. I’m very curious and I promise I won’t be offended.
I’m going to go at this armed with logic, psychology, some comparisons and a tiny bit of math. If, at the end, you still think the idea of the corking fee is unreasonable, all I can say is that I did my best to make it make sense, and that we hope to see you for the occasional glass of wine or bottle to go.
All right, so first things first: what is a “corking fee”?
In the case of Plateau Wines, (“the shop”) a corking fee is a service charge that’s tacked on to the purchase of a retail bottle, when you want to open and drink the bottle in our shop. (Note: If you are a wine club member, you don’t pay corking fees. More on this later.) Currently, our corking fee is $10.
Ok, so now WHY?
We call the corking fee a “service charge”. The term “service charge” has been pretty diluted as of late but, literally, it is actually a charge for our “service”. I’ll explain using two different methods.
But, wait, maybe first I should tell you why the shop is unique and breaks your brain…psychologically.
The shop is unique because it is BOTH a retail wine store, (like any QFC or Total Wine) and a restaurant. Not just one or the other.
The problem with this is that, as a QFC, in order to compete, we have to charge competitive retail prices with the intention that you are taking your purchases home, like you would from any grocery store. As a restaurant, we need to charge something closer to restaurant prices on bottles consumed on premise in order to make up for the additional cost it takes to, well, cater to you.
As consumers, we’re used to the concept of either/or in this case. It’s all about expectation and perceived value. When you walk into QFC, you expect to pay one price for a bottle of wine, and when you walk into a restaurant, you expect to pay a different price. At the shop, where we provide you the convenience of buying a $12 New Zealand Sauv Blanc, and then the luxury of having us serve it to you for $22, your brain fully perceives the disparity in price and breaks a little.
I think we all bristle at paying more for something than it’s perceived value. It’s kind of like my argument about pizza delivery. These days when you order a large pizza, it can cost you anywhere from $20-$30, which seems expensive. But when you consider that the pizza is prepped, cooked, delivered to your home and feeds four people, that $5-$7.50 price per serving for a restaurant-quality dinner that you didn’t have to cook doesn’t seem so bad.
We all understand that when we buy a bottle of wine at a restaurant, we’re paying more than the retail price for that bottle because being served in a restaurant is a completely different experience than shopping at QFC. The corking fee/service charge is built in at restaurants to account for that, and suddenly, your $12 bottle of Sauv Blanc is now more like $30. If you bring a bottle into a restaurant, (as lots of people do) they then add on that same kind of corking fee, which can be anything from $10 to $150, depending on how fancy your sit-down meal is. They do this because you’re using their resources to serve your own wine to you, and they’re not going to recoup that cost from a wine list purchase.
We’re paying for convenience, here, right? We’re paying for someone else to serve us and for the atmosphere the restaurant provides. If it were purely a case of dollars spent, we’d never eat out. It’s expensive. But we understand that prepping and serving us costs others money. They have to pay their staff, bring in inventory, keep the lights on, etc. And it’s worth mentioning, that drinking a $12 Sauv Blanc at our shop for $22, seems like a big jump in price because of the low cost of the wine. If you then buy a $50 bottle of premium red wine from our place, it’s only $60 to drink it here. Compare that to what a restaurant would charge, which would be at least $100, and ours is a screamin’ deal!
Let’s look at it from another perspective. A restaurant buys ingredients for their macaroni and cheese. Per serving, the restaurant’s cost is maybe $2. The ingredients go to the chef who preps your meal, and is paid minimum wage, bringing the cost up to, say, $5. The dish is brought to you by a server, who is paid minimum wage. Now the cost is $8. The price on the menu is $14. That leftover $7 goes to overhead and, if they’re lucky, maybe they make a little profit.
Same thing with a bottle of wine. A vineyard makes their wine and bottles it. Their cost is $4. They pay a distributor to sell their wine, and the distributor sells it for $8. The shop buys it at this price and sells it for $12. The $4 difference goes to labor and overhead. If, as a patron, you then sit down and open the bottle, our service to you costs us money and the corking fee helps us pay that cost.
Picture this: a couple comes into the shop and buys that same $12 Sauv Blanc. No corking fee. They casually sit and enjoy their wine over the course of two hours, pay their tab and leave. For just one server to check on them, clean and polish their glassware, and bus their table, they’ve effectively paid that server $2 an hour plus tip, (because that bottle still cost $8, remember). And the shop gets nothing.
I know my numbers aren’t perfect…and, “what if the whole bar is full of couples with $12 bottles"?” Sure. But the principle is the same. We’re just trying to keep everything going.
Maria made less than $3 a day working full time last year. We don’t disclose this to you because we want you to feel sorry for her. Or us. Look, if we were in it for the money, we wouldn’t be “in it”. Small business owners do what they do because they’re passionate, not because it’s profitable. And, yes, it’s our choice to do this; we knew exactly what we were getting into. It’d be nice if the shop did really well and we could occasionally give ourselves a paycheck and take a vacation, but we won’t ever get rich off of it and that’s just the reality.
In writing this, Mikey and I went over some alternative scenarios. What if we wrapped the corking fee into the retail price and just took it off at the register if people are getting it to go? Is not seeing the added charge better, psychologically? The negative to this is that it will appear that we’ve increased our prices, and if we’re not clear from the beginning that you can discount the price to go, we may lose regulars who don’t understand what we’re trying to accomplish.
I floated the idea of having people choose their own corking fee, because I like social experiments using real people as guinea pigs. Mikey was not a fan, and it might make our wine club members a little twitchy. Because our wine club members don’t pay a corking fee EVER. And being next to a non-wine club member who chooses to pay a corking fee of a cent isn’t exactly fair. The theory behind waiving the fee for members is that their membership fees partially account for this expense and that they’ll hopefully come in more often.
If you’re still with me, I’m impressed and I thank you. The gist of it is that we’re damned if we do and damned if we don’t. We’re not going to be able to please everyone.
Are there any of our loyal patrons out there who want to tackle this issue with some collective brain power? We could put together a group of people to really figure this out. And because I think this is a big deal that will have a clear effect on how we do business, I’ll waive your corking fees!