That just sounds like racism though - how do they tell who qualifies for the ‘local discount’ versus the ‘tourist premium?’
Betting it’s based on stereotypical appearance and language, not checking IDs.
A more charitable approach might be to charge an extra fee for foreign credit cards - that way you get to effectively upcharge tourists, while encouraging conversion to and payment by local currency, additionally saving yourself transaction fees in the process.
Japan specifically is extremely xenophobic, they actively discourage people from immigrating, they do not want foreigners there except as tourists. If you are not born in Japan, you can never become Japanese as far as the locals and the government are concerned.
It's kind of reductionist to take that environment and that culture and just default to "giving the white guy the expensive menu is racism." You'd have to do that to probably 1500 people before you hit the person who has actually immigrated as opposed to a tourist.
Betting it’s based on stereotypical appearance and language, not checking IDs.
A more charitable approach might be to charge an extra fee for foreign credit cards - that way you get to effectively upcharge tourists, while encouraging conversion to and payment by local currency, additionally saving yourself transaction fees in the process.