Local favorites, Xiao Bao Biscuit and Tu, were caught charging customers extra sales tax on every bill, a 2.5 percent surcharge that was undisclosed and intended as a "convenience fee" offsetting credit card processing fees, according to the Post & Courier. The restaurant has since made strides to reformat their checks and respond to the allegations of deception, but not after more than a day of silence as the story danced across the Internet.
The story has become fodder for social media conversations in a way most Charleston stories don't because of the combination of storylines: it centers on the food and beverage industry, with a take for both customers and industry-insiders; discusses consumer harm (always a winner for an enterprising newspaper); the mystery behind the restaurants' silence in the formative hours of the scandal -- the same day as the restaurant Tu received a positive review in the same paper; and the continued reporting that shows this might be a widespread, if illegal, practice.
It also underscores the importance of small businesses having a crisis communications strategy in place for when things get out of hand, something it appears XBB did not have. No small business wants to find themselves in the midst of a viral scandal. But, in the whip-cracking fast world of social media and hot takes, an outfit's hard-earned reputation can be wiped away nearly as fast as I can polish off an XBB okinomiyaki.
Here's what every small business, non-profit, or individual should do to survive their next crisis:
Have a plan for the worst already in place
No organization sets out to be caught in a social media wildfire. In XBB and Tu's case, it's perhaps even likely the restaurant was victim to shoddy advice from a vendor providing their POS system (and why the Post & Courier softened their original headline calling the practice "undisclosed," after originally naming it deception.) But, an organization must have a plan for when things go wrong.
So how do you plan for a scandal you don't know is coming? Smart crisis communications doesn't start when the crisis begins. It starts by rigorously evaluating your business at regular intervals and looking for potential hazards, making sure you're scandal-free.
In the consumer world of restaurants and retail, it means being absolutely on top of your customer experience. It can be easy as a business owner to be blinded by spreadsheets and the balance sheet. Taking the time to be your own customer and considering the entire experience might alert you to the fact that you didn't realize the "convenience fee" was not separately disclosed.
Know the facts
As this story has sat for a few days and more reporting has arrived, it seems clear the POS vendor XBB and Tu were using may have been behind the restaurant's mistaken understanding that convenience fees to cover credit card costs are permitted; they're not. It's possible XBB did not know that and were themselves victim of the potentially deceptive business practices of their vendor. All the more reason it's imperative you know the facts.
It's okay for an organization to take time to prepare the proper response, in fact, it's necessary. But, while the facts are being gathered, it's not okay to completely go silent. XBB initially offered the P&C a short tone-deaf explanation, but then went quiet, not answering the paper's continued questions. Their initial explantations and later statement are consistent, fortunately, but the interregnum created a cloud of uncertainty. Even a brief, "we're looking into this matter," would have better served the restaurant as they got their story straight. They would have had the opportunity to cross reference their story with lawyers, communications professionals, and their vendor.
Actually apologize for mistakes you've made
As I said on Twitter, I'm almost as disappointed in XBB and Tu for the way they've handled this mess as the non-disclosure in the first place. That's in no small part because of the tone-deafness of their apology. Quoting from their Instagram post:
Now, what I do regret and what I want to apologize for, is that any action on our part could be perceived as not being upfront with our customers.
Apologizing for the perception is not the same thing as apologizing for the action. This is a non-apology apology, coming after a tirade about credit card fees and the perils of small business ownership. Instead, organizations should be prepared to actually apologize. When Apple was taken to task late last year for battery performance problems, they apologized directly. So direct was their apology, it was the third sentence of their statement, just two words: "We apologize."
When it comes to matters of customer trust, don't try to shed blame. It's okay to offer an explanation, but ultimately customers don't care. A full-throated apology is warranted and wanted.
Work with professionals to help you think clearly
Small business owners and others in leadership positions at their organization can find themselves unable to separate the emotion of the situation from their responsibilities to make the right choice for their business. A probing question from the local paper can feel like an attack on a way of life and whole-hearted passion. Customer inquiries on Twitter and Instagram can add to that pressure.
Separating the emotion by hiring dedicated professionals trained to deal with the intricacies of crisis communications can make sure you don't add fuel to the fire and are equipped to clearly see the next steps you must make for your business. Helping solve consequential problems like these are my specialty.
If you want to make sure you're equipped before a crisis happens, or if your mapo dou fu is already hitting the fan, get in touch.
This story was also published on Medium.