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It’s simple, if a restaurant adds something to the bill I did not agree to beforehand I’ll never eat there again.
If a restaurant adds something to the bill I didn’t agree to beforehand, I’m not paying.
That would be consequent, but usually it’s not worth the trouble.
I’d rather leave with 20 quid less than wasting 30 min of my time.
Oh. It wouldn’t take me nearly 30 minutes. It would be less than 5 total minutes.
How about just leaving the correct amount of cash on the table and walking away without saying a word.
So your time must be worth 40/hour or more to make it not worth the trouble?
Not OP but my nerves are definitely worth more than 20 bucks.
Mine too. I have the nerve to tell them to fuck off with their bullshit.
It’s a risk reward analysis and not strictly a 1:1 hour pay relation. No one guarantees you any positive outcome here.
Best case I get the fee removed after a short conversation.
Worst case, I have to engage in a long drawn argument still having to pay full afterwards.
Or anything in between, such as still having to pay full, but they’ll make this clearer in their menu.
best case was a simple mistake and I just have to ask politely. This can be considered very unlikely in this case because the recipient has a dedicated section for the fee, indicating that they’re not going to make any change to the bill. So the risk reward is highly leaning towards the worst case as the expected outcome.
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Surprise surprise, People attempt illegal things all the time
My time is worth way more than 40/h when I’m out with friends trying to have a good time. I’m never going to the restaurant again and that’s it.
That’s like $80k a year. Not that much.
I have never eaten at a restaurant that did not disclose a mandatory gratuity ahead of time, but I suppose it could happen.
That’s wonderful for you, but it does happen.
Went out to a pizza place the other night. Thought it was a brewery (one of my favorite local brews, actually), and had been there before and enjoyed flights from them…only to find out the place was a joint between the brewmaster and the restaurateur. Brewmaster took his share, his recipes, and dipped a couple days prior.
Anyways while the food was pretty good, I mostly went for the beer and that’s a big part of why I won’t go back (they only had a couple cans from the brewery left and nothing on tap, only some other regional breweries).
But the other part is that my wife put a tip down on the slip for our party of four (us and two kids) and asked me to doublecheck her math. I thought it seemed high and it turned out they already put a tip on the bill. For a party of four. Never saw that before.
Yea they better have this charge displayed very well on the menu
The service charge is not a tip or gratuity, and is an added fee controlled by the restaurant that helps subsidize the staff wages so that management doesn’t have to while still seeming to have reasonable prices on the menu. Also, management takes a cut as it subsidizes their wages too.
Edit: I get why this upsets some people, but the downvote button is not a disagree button. I merely restated the restaurant’s explanation in plain language. I’m not agreeing with it…
If you charge me for service, I’m not paying extra for service.
Call it what it is - a junk fee so they can make their prices look lower than they are. I wouldn’t go to this restaurant a second time.
By tradition, the service charge is supposed to be paid to the staff. Therefore, it’s not customary to tip when you’re assessed a service charge, although many restaurants choose to ask for a tip anyway.
If you work in a restaurant that charges a service charge but pockets it… you’re being robbed.
Unfortunately, this isn’t true anymore. At least in PA.
34 Pa. Code 231.114. Service charges.
§ 231.114 b
The notice required by subsection (a) must state that the administrative charge is for administration of the banquet, special function or package deal and does not include a tip to be distributed to the employees who provided service to the guests.
If this restaurant was passing the entire service charge to its waitstaff, it would be advantageous to call it a gratuity and exempt it from sales and income tax. The IRS does not tax tips/gratuities as income.
By charging (state) sales tax on the service fee, they also have to declare it as revenue, which increases their income and thus their income tax. They have to pay a portion of that service fee in income tax, so they aren’t going to be passing the full amount to their waitstaff. The restaurant will be keeping the bulk of that service fee.
Heck, I wouldn’t even pay this restaurant the first time. I’m out. You ain’t making me pay extra after the fact.
The cost of food in American restaurants includes service charger. It just not itemized. Waiters do have salaries, so it comes from somewhere.
That’s my point. This restaurant is try to bait and switch their customers by giving a misleading food price and adding a service charge. It is like a cell phone company adding garbage fees.
As for my initial comment - if you add a percentage for service, that ends my obligation to tip.
Ah! I see. You were talking exclusively about not coming back into US restaurant, not restaurant in general anywhere in the world. It was not clear for me.
Hey, look at our cheap food!
Oh, btw, we didn’t tell you, but it’s actually 18% more expensive than the prices on the menu.
Also, it’s $10 extra for the plates and silverware.
And we also charge you for eating in as well, that’s another $10.
And if you don’t tip on top of that, we get really angry.
Please leave a 5 star review!
And we also charge you for eating in as well, that’s another $10.
Some areas actually have different pricing for eating in vs taking out, as it’s treated differently by the tax laws. Some areas also tax differently based on if it’s cold or hot/cooked food, so a toasted sandwich costs a bit more than an untoasted one. Very small differences, though.
Yeah, my post was a bit of hyperbole, but I’ve been to a fancy restaurant a while ago, where they did make you pay for cutlery and also for the table separately.
But they didn’t have a take-away option.
I was talking about service charge, not tips.
American waiters get paid, Parisian ones do it for the pleasure of serving their fellow man.
The problem is, this is still decietful. If this is an issue then the correct move would be to make every item on the menu 18% more expensive as a base. Because now, they still get to say “oh well our prices are still low come eat here and get “X item” for “Y price” but that’s not true anymore because of the service charge. It’s just a way to keep menu items lower in price but increase the price at the end.
Sounds like it does much the same thing as tipping then, right? But then the receipt says you should pay the service charge and a tip on top 🤔
I’m not American so maybe someone can explain this to me, haha…
I’m an American, and I can’t explain this to you. If I saw this on a receipt, I would write down on it that I’m tipping $0 because of the service fee and to consider the fee my tip.
If you live in a place where this is becoming the norm, that’s exactly what you do.
A far more above board and less vibes-based way to pay.
It doesn’t make sense to any sane person. But basically:
The restaurant feels that costs have increased and in order to remain profitable they must raise prices. Instead of raising prices on the menu, take the canoli as an example, from $11 to $13, they decided to add it after the calculation.
This means the customer may go out with an idea of what they would like to spend (maybe it’s a special treat for them) orders based on the menu, figures tip and tax… Expects to be out for $100… But surprise! You owe a fucking service charge.
Now-- I’m not into this particular restaurant’s finances. Let’s be generous and assume they need to charge more to break even. This is the shady (and should be illegal) way to do this. They should instead raise prices and be honest with the customer what they feel they need to charge.
Except you’re wrong. It is a tip because the tip is the service charge. The tip specifically is “we pay them less than minimum wage and your tip covered the rest of their service cost”. A tip AND a service charge, especially a service charge not levied because there were X+ people at the table, is double dipping on the tip. Both fees are for the same thing. Either increase prices or increase the tip(or pay your workers fairly and don’t expect me to subsidized the rest with these secret fees). Make them upfront and honest. This isn’t. This is a perfect invitation to say “you already charged me for the service, so no tip is needed, because that’s what it is for”.
The tip specifically is "we pay them less than minimum wage
Not everywhere. Some areas don’t allow wages that are lower than minimum wage for tipped jobs. The area I live in in California is around $17-18/hr minimum wage regardless of if the job is tipped or not.
Except you’re wrong. Service charges are not considered tips under FLSA rules within the US. Many states and local jurisdictions have special rules for tipped wages, how they’re taxed and those taxes are collected, and service charges are not included in that definition.
https://www.dov.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
Nice reading comprehension. The TIP is a service charge. You got that backwards buddy. So a service charge and a tip is service charge x2. Or you’re admitting that a tip is only for “above and beyond thanks”, in which case it’s not mandatory and this is again a scam.
You might want to read it again
Service Charges: A compulsory charge for service, for example, 15 percent of the bill, is not considered a tip under the FLSA. Sums distributed to employees from service charges are not tips, but may be used to satisfy the employer’s minimum wage and overtime pay obligations under the FLSA.
A place implementing a service charge cannot classify it as a tip, even if it’s 100% passed onto the employee… a mandatory charge is not a tip, even if the restaurant encourages you to treat it that way. Certain states and jurisdictions tax tips differently than regular wages, and service charges are wages, not tips.
A tip is money paid directly to the worker providing the service. The restaurant can’t keep any part of it. They are not taxed on it, either as sales tax or income tax. That money is only counted as income to the worker.
This service fee was subject to sales tax. It will also be subject to income tax by the restaurant. The restaurant gets to keep as much of it as they want.
“Mandatory gratuities” are tips that the restaurant obligates the customer pay to the waitstaff. Where these are charged, you are not allowed to stiff the waitstaff. The restaurant cannot keep any part of that gratuity.
Tips/gratuities and service fees are not the same thing at all.
I’m not talking the law, I’m talking what the tip actually is in practice. It’s the service charge. You’re paying for the server to serve you. The tip isn’t for the food. It for the server serving. Just because you’ve been conned and guilted into accepting this as normal doesn’t make it right. And just because it’s taxed doesn’t mean it’s still not extra income to the resturaunt. Would it be ok if I mugged you but paid taxes on the money and gave it a cutesy name?
A “tip” is for the server serving.
A “mandatory gratuity” is for the server serving.
A “service fee” is for the restaurant existing. Service fees do not go directly to the staff. The restaurant keeps most of that service fee.
I mentioned taxes not to suggest that the practice is legitimate, but to demonstrate that the money is income to the restaurant. Tips are not income to the restaurant. Tips are income only to the staff.
I acknowledge that there is no significant distinction to the customer between a tip and a service fee, but there is a highly relevant distinction between the two for the restaurant and the server. The service fee this restaurant is charging is money stolen from its staff.
This restaurant could support its workers by adding a mandatory gratuity to the bill, in which case I would agree that no tips should be paid. But a service charge is not a tip. A service charge is not a gratuity. A service charge is not paid to the servers. A service charge is kept by the restaurant.
If they charged a mandatory gratuity, I would agree with you. An 18% mandatory gratuity is an 18% tip to the waitstaff; you are not expected to pay an additional tip on top of that.
A tip is money directly to the waitstaff. The restaurant can’t touch it. The restaurant is not charged sales tax nor income tax on money collected as tips. When they collect a gratuity, it goes directly to the staff.
This “service fee” was taxed. It did not go directly to the waitstaff; it was recorded as sales revenue, and thus income to the restaurant. The restaurant is being taxed on it before any of it gets to the staff. They would only do that if they are keeping a part of it, which they could not do if it was considered a “tip” or “gratuity”.
Charging a “service fee” is a legal way for the restaurant to steal tips from employees, while making you think they are paying it to their staff.
Most likely, they pay minimum tipped wage plus $1/hr. They are making $3.13/hr plus tips instead of $2.13/hr plus tips. That extra $1 is the higher “base wage” they are talking about.
About $0.75 of that $17.22 service fee goes toward increasing the “base wage”, with the rest counted as income to the restaurant.
This is not the perfect opportunity to say “you already charged me for the service”. This is the perfect opportunity to name and shame this scumbag restaurant for its shitty business practices, and never eat their again.
that helps subsidize the staff wages
Allegedly
But If that’s the reality, I feel no need to add a tip.
They probably pay $1/hr over minimum tipped wages. About $0.75 of that $17.22 fee goes to paying that increased wage, and the rest is pocketed.
If they wanted to subsidize worker wages, they would include a mandatory gratuity rather than a service fee. Gratuities are passed directly to workers.
This is truly scummy behavior.
subsidize the staff wages so that management doesn’t have to
Yeah that’s a pretty shit reason to levy this fee unsuspectingly.
In Australia this would be illegal drip pricing. JUST INCLUDE EVERYTHING IN THE PRICE OF THE FOOD! Is it so hard?
Absolutely wild you also don’t add tax in the price in the US.
Is it too much to ask to just be told the price upfront on the menu?
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The downvote button is a lazy disagree button, but people is also dumb.
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It’s cuz they’re too chicken shit to actually raise the menu price. So they can blame the government or the workers instead of taking responsibility for paying their staff shit wages forever
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“no one wants to work anymore” says restaurant owner who won’t pay a living wage even after jacking up service fees.
Yeah if I hear a word about my decision to include the service fees in the tip, that’s the last time the restaurant will see my business.
Paying for servers based off of the price of the food just doesn’t make sense to me. If I order a super expensive caviar and super expensive bottle of wine the staff would be paid more than another server with large party that only orders inexpensive drinks. The second server would be paid less for doing more work.
I think they should just be paid a decent wage for doing their job well despite what the customer decided to order.
On a side note if the server has to do something like prepare a salad table side or flambé a dessert they should get a bonus for doing that.
I worked as a server at olive garden many years ago. They famously had their soup, salad, and breadsticks deal for like $6 something. People would run us ragged getting more of each thing. And we’d be lucky to get a $1 or 2 because the price was so low, but it was vastly more work than regular food.
I think they should just be paid a decent wage for doing their job well despite what the customer decided to order
Where I live, there’s no separate minimum wage for tipped positions. It’s the same as the regular minimum wage. Even so, it’s still customary to tip, but just for some jobs. It’s never made sense to me that it’s customary to tip a Doordash driver but not a casual FedEx or UPS employee when the latter likely has more work to do and stricter deadlines to do it.
not a casual FedEx or UPS employee
Do you want corporate efforts to reduce delivery driver wages and processes to demand you pay their wages through delivery tips? Because I am sure are ready to go on this endeavor as soon as you want.
As far as I know, some of the casual/seasonal drivers (extra delivery drivers for holiday deliveries) don’t get paid much more than minimum wage. I’m not talking about the unionized employees.
My overall point was that there’s many jobs that get paid minimum wage, so why are only some of them tipped? It would be more consistent to either be all tipped, or not tipped.
It’s not going to the server, not unless the city has a minimum wage, or something. But any thing over that is 100% going to managment’s coffers.
ALL cities in all states have a minimum wage for all workers. By federal law
Yes. But some cities (or states, even,) specify another-higher minimum.
Since you want to be pedantic… most cities don’t have a minimum wage established; deferring instead to federal or state law.
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What percentage tip results in negative money?
It’s a tip pool. So for instance I serve a meal to a couple. The meal is $50. They tip 10%. That split means I pay (for instance) the bartender out of the $5 tip $2.50. If I get another table that orders drinks and tips nothing I end up splitting nothing. But if I work with 4 other back of house people and they each get an equal percentage of that $5 then I get a dollar. But then that dollar is taxed because tips are taxed. If the company has a policy for shares tips pooling I could legitimately make $100 in tips and not receive $100 in tips. Technically that would be receiving negative tips because what is earned vs what is paid out is so drastically different.
In addition I’ve experienced back of house workers (cooks) getting paid out of the tip pool but the brunt of tax on the tips is not paid by them. This is absolutely tax fraud. But I’d also argue that tip pools are a form of wage theft and companies that engage in one are way more likely to engage in the other.
That isn’t negative tips. The lowest you can make in tips is $0. Even when tip pooling, the lowest you can make is $0, which requires no tips what so ever to have been given. There is no 100% tax rate, and you are at no point ever paying into the tip pool out of your own pocket.
I understand what you’re saying. But for a person who is now down from $5 to $2.50 to a $100 that is then taxed you’re effectively making less money than you earned. That’s why you can have negative net even while making take home pay.
But think about what might happen if the bill is paid incorrectly in cash. The company will absolutely take cash tips to compensate in the event that you or someone else messed up when counting the cash or giving change or whatever. With tip pools it’s unlikely. But it has happened.
Wait, you’re taxed on money you didn’t earn?
Apparently Federal Law sort invalidates the legality of a tip pool altogether because the tip only counts as a tip if the person who tips determines who the tip is given to and how much and it’s non compulsory. But a lot of places ignore that as well.
https://www.nolo.com/legal-encyclopedia/state-laws-tipped-employees.html
It’s technically tax fraud, but yes. You could be. Back of house staff can include managers, cooks and dish washers, and even the hostess. Those people aren’t paid the $2.75 to $3.75 that the wait staff are paid. They’re considered hourly employees and they fall under different pay requirements under the law. A business that doesn’t augment the amount of pay for wait staff not making the federal minimum wage ($7.25) an hour in tips, that business is committing wage theft. To then be paying non-wait staff out of the wait staff tips is illegal as part of the wage theft. But since the company is already committing wage theft there’s no reason not to commit tax fraud to cover up the wage theft.
I don’t think you know how numbers work. Why would they be paying coworkers out of a tip that never existed?
18% service charge and then still ask for tips? Fuck all of this, this is a scam and refuse to pay this shit.
Based on the bottom of the receipt i would have said to the server something like “great, it says right here no need to tip”
What a lovely way to ensure that your customers will never return.
How about just raising prices since it is a cost of running the business.
Exactly, it’s a linear extra cost so just bump all the prices that much.
But if you tell the customer how much things cost they won’t buy as much.
It’s just layer upon layer of dishonesty. The only time businesses get honest is when the government forces them to.
In a vacuum that would be fine. But in the current culture that likely wouldn’t overcome the tipping standard/culture and may just drive customers away thinking the prices are too high. Unless you have a huge blatant no tipping sign all over the place.
This isn’t too indigestible as it stands provided the wait staff understand they are likely to only get a tip for excellent service.
But to do this on top of an 11 dollar cannoli. That’s a bit different too. I hope it was like a dozen cannolis.
That sounds just like tipping, but with more steps. And also the resteraunt skimming a chunk of it too I’m sure. 18% service fee so we can pay 8% higher wages.
That sounds just like tipping, but with more steps
That sounds like the exact same amount of steps as tipping.
LOL
This is probably a hotel or resort. $4 cookie and $6 oj are the giveaways .
$11 cannoli etc.
Why have a service fee at all then?
Just raise the prices and use the extra income to pay the employees better if that’s really your intention.
People won’t get upset about the tip on top of it if you don’t already have a “service charge” sectioned off in the receipt.
It’s so that they can deceitfully advertise prices which are lower than the real price.
I believe this is totally illegal in the EU (because they’re obligated to list prices and all charges, fully, upfront and that even includes taxes) but I guess that in the US there are States were it’s either not illegal or has never been challenge in court.
I had a service charge like that added in Rome once. It is most likely illegal, but Rome is a pretty lawless place as it is where everybody tries to scam you all the time, so I didn’t bother spending time arguing it and getting all worked up about a couple of euros during my holiday, just avoided the place thereafter. I know that’s probably what they’re counting on …
Oh yeah, I live in Portugal and here too foreign tourists are natural targets for scammy shit. It’s not too much but there are certainly bad actors who will take advantage of people who don’t speak the local language and don’t know their rights.
However I suspect it’s a lot worse when some kinds of scams are actually legal.
Oh yes, the “coperto” or cover charge. Restaurants that are worth going to will tell you upfront about whether they charge you that and how much. Tourist traps will just put a small sign somewhere on the premises that informs you of their ass-pull fee.
I went to a small café in Venice and had a cup of coffee for 4€. They charged me a fixed 14€ coperto.
Coperto is perfectly legal and the norm everywhere. It would be clearly mentioned on the menu, typically at the bottom of every page and it is around a couple bucks per person. It’s for the bread and bread sticks you get on the table, water and electricity to wash cutlery and plates you use, and to pay for serving stuff and rent. Why not included in the price of that pizza you might ask? Because I might order that pizza to take away and not use all of the above.
Some touristy places take advantage of it, doesn’t make sense for a coffee in Venice (though I’m not surprised). A couple of bucks that op was charged at a restaurant in Rome on the other hand, 100% expected everywhere in Italy.
Source, am from there.
So that shit is actually legal in Italy?
In that case I was totaly wrong on my belief on it not being legal in the EU.
I just read about coperto here, and I don’t think that was it. I’m pretty sure it said “Servizio” on the bill, and it was a percentage on top of the price of what we ordered.
In my country (in the EU) usually if a service charge is added on top of the order, it’s because that particular place doesn’t accept tips.
That would be illegal in the EU country where I live (Belgium). Here the rule is that the advertised price must always include any mandatory charges, like VAT and service charges, so that advertised price = price the consumer would have to pay.
Source: https://economie.fgov.be/nl/themas/verkoop/prijsbeleid/prijsaanduiding
Translation:
Price indication
Companies offering goods or services must indicate the price in writing in a legible, visible and unambiguous manner.
The price is the total price to be paid by the consumer, including VAT and all other taxes or services that the consumer is obliged to pay extra. These prices are stated at least in euros.
That would be illegal in the EU country where I live (Belgium).
Further evidence that America isn’t a legal country.
I the s legal most places in the US, some big cities like New York City have outlawed it.
Look at how the tips were calculated. They were based on a bill of $95.65, the price of the meal before the service fee.
This service fee allowed them to increase the price of the meal by 18% without increasing the calculated tip by 18%.
They are stiffing their employees.
Just raise the prices
They’re already selling lemonade for $6. The sky is clearly the limit.
Possibly illegal, depending on your local laws.
If it is legal, contact your congressman (local, state, national) because it sure as hell needs to be illegal.
Very unlikely. There’s a statement at the bottom that explains what the fee is. There’s a QR code at the top for more information, which OP cut off.
I doubt they went through the effort of updating their POS system, providing links to info on the receipt, and chose not to post a sign or put a note on the menu. Everywhere I have been with a service fee like this posts it, which would negate any legal issue.
Caveat emptor.
It’s illegal if the fact that a service fee would be added wasn’t shared before ordering (on the menu / by the waiter /…)
Possibly. Local laws vary heavily, and could limit hidden fees like these. If the franchise is in one of these places, but the parent chain is not, it could easily be implemented despite being illegal. It’s a similar case if the local operator didn’t have the required notices in the required way, since it would be done separately. Not necessarily out of malice, but a ton of places simply do not run a tight ship. The receipt is absolutely not the place these notices are required; that’s just a convenience.
It’s also possible that the POS has a bunch of options that can easily be set by management without involving lawyers. A required tip (often for large groups, but not always) is an easy use case for this. So are the various messages, including the tipping scale, or adding a promotional QR code (e.g. scan the code to fill out a survey and get $5 off your next visit)
In any event, I stand behind my advice- check if it’s illegal, and push to make it illegal.
So you carefully included every possible level of US government, but still forgot about the entire rest of the world.
First, many places have a local, state, and national government. Particularly the ones that use dollars and expect an additional tip, as shown on the receipt.
Stop trying to be offended at everything.
My country, which has dollars and expects tips, doesn’t. And this read like it was addressing unexpected fees at restaurants in general.
Stop pretending Americans don’t do this constantly. Everyone who’s not American is very familiar with it, and honestly it’s understandable with how big and self-contained that country is. I might not even have commented if it wasn’t for the remarkable thoroughness short of that detail.
I presume you’re in Canada. Aside from calling them provinces, and possibly having a different name for your legislative representatives, are you saying you DON’T have a local, state, and national government where my advice would be relevant?
No, you’re advice was great. I just found the phrasing weird enough to point out. Sorry if it came across as angry.
The rest of the world doesn’t exist, it’s just a scam made up by the passport cartel to fleece you of your money every few years.
Can confirm, I’m just standing in a blank white space. It’s weird I get wifi.
Do a search for the Tianamen Square massacre. You’ll at least know if you’re Chinese white space or non Chinese white space
Oh no, it’s turning black. Chairman forgive me!
Let’s see… dollar sign? Well that cuts out a lot of the world. Written in English, so that leaves about 3 countries. Australia doesn’t have a tipping culture the same way we do in North America so that leaves either Canada or the US, in which case you can replace state with province and cover your bases.
Percentages on the tip are lower than US tip amounts. So I would guess not US, though this would obviously happen in the states.
Do other countries itemize tax separately? I thought the US was alone on that.
Also, 9.5% is in line with sales tax in a few US states, as is calling it tax instead of VAT (or similar)
Idunno. don’t remember what they do in Canada.
Good catch, I didn’t even notice the percentages. I did look at the date but of course the meal was purchased on the one day this month where that’s not helpful
Don’t forget New Zealand. They do tip down under, but it sounds like they don’t recommend tips the same way.
Yeah, sure, the jist applies everywhere. OP could have saved words just saying “representitives”. That’s the part that was interesting, and now people are big butthurt I pointed it out.
I mentioned all 3 because people (at least around me) tend to forget the first 2, despite those being much easier to make these types of changes.
Looks at a picture of a receipt that is almost certainly from the US:
What about the rest of the world?!
It looks exactly like a receipt that could be here, too. As has been repeatedly pointed out to me, there’s only 2 to 4 countries this could apply to, but you’ll excuse me for expecting the same thing as always was happening.
Basically, they just raised their prices by 18% and blamed it on the greedy, useless employees. I don’t know why businesses bother selflessly “creating jobs” if they are so much trouble. Shouldn’t those be the first things to cut to make their business more efficient under capitalism? Stop doing charity work and run the business yourself.
Probably better than expecting customers to tip voluntarily
Oh wait, they do that too
I hope their customers are exclusively people who support the the below minimum wage for servers law.
Basically, they just raised their prices by 18% and blamed it on the greedy, useless employees.
No, it’s worse than that.
Look at how the tips are calculated. They use the base bill of 95.60, not the bill after the service charge has been applied.
If they rolled an 18% increase into their prices, the calculated tip would also rise 18%. But it didn’t.
So in addition to effectively raising their prices and blaming their employees for it, they are also stiffing their employees by low-balling their tip calculations.
Actually, what I’m saying was that there shouldn’t be a need for a tip at all. That 18% service charge is for services rendered outside of the production of the product, meaning the server, cashier, etc. In most countries that’s rolled into the cost of the product, not a separate charge. In the US, that’s paid for through tips instead. What they’re doing is trying to double dip. They want to keep the money that normally would go to paying the service staff a wage without raising advertised prices and also have a separate tip to actually pay them.
This is a classic bait and switch where advertised price is not what you actually pay. Doesn’t matter if they put a little sign to cover their legal obligations, it’s still disingenuous to advertise one price and charge another. Tipping and taxes are common knowledge in the US as being added on after, but a service charge in addition to tipping is not and most people will assume that the service charge is a tip and won’t also tip whereas it doesn’t go directly to the service staff like a tip does. So likely in this place, the service staff just gets their $2.13/hr or whatever the tipped minimum is there, and a few dollars here and there in actual tips but doesn’t get any of that 18% unless tips don’t cover the required hourly $5.12 tip credit.
So they need to choose. Raise your prices for more profit and keep tipping, raise your prices to pay your service staff and do away with tipping, or keep your prices lower and risk tipping not covering the minimum wage tip credit.
Oh boy, the unlawfulness of USA. This would be clearly illegal in EU, as misleading pricing.
Even if stated there’s an 18% extra fee, I’m pretty sure it would be illegal to state prices exclusively without it.
I would simply refuse to pay that fee if it was here, and report them to authorities.I don’t think so, as long as the fee is made clear before getting the bill (e.g. indicated on the menus and signs outside). It’s definitely legal in Europe, assuming you were warned beforehand. It’s very common in some European countries (while entirely nonexistent in others).
In countries where tipping isn’t traditionally acceptable (like in places where it’s associated with bribing), service surcharge often replace the tipping. Charging a service surcharge and then suggesting a tip is ridiculous though.
I simply wouldn’t tip after that surcharge, but then again I’m European.
In America, the restaurant would have to post this on the menu. Thus we have fine-print on our menus. God bless the USA.
It’s nice to hear the EU doesn’t let that crap slide.
There is no “EU” culture about any of this. Every country has its own culture and acceptable ideas. All I know is that you have to be made aware of any surcharges before they’re applied, but I’m pretty sure things work exactly the same in America.
I wouldn’t be surprised if you’d find random hospitality surcharges when you walk into a random restaurant in Amsterdam or Paris. What are you going to do, sue the restaurant? Call the cops? As much as I like living here, it’s not like this is some kind of utopia where scummy businesses don’t exist and where the government always enforces customer protection laws everywhere.
Scummy businesses sure exist but you would never see this in Amsterdam or Paris. I’m pretty sure there are laws that whatever price is shown is the final price.
You’re probably right. But judging from other comments in sounded like a small note on the front cover of a menu saying ‘there will be a flat rate surcharge’ would not be adequate.
Obviously, this is a horrible way for me to collect legal advice, but would a fine-print note on a menu fly? (interpret ‘fly’ however, I’m clearly naïve here.)
Where is this common? I know you often see it in scummy tourist traps, but besides that I’ve not seen something like it.
Where is this common?
I believe you most often see this in scummy tourist traps.
I’ve only come across it in ex-Soviet European countries, but every country is different of course. Tourist traps also like adding fees and surcharges but I don’t think they do it for the same reason.
I remember something about tipping bring associated with bribes getting mentioned in a documentary I watched years ago, but i can’t even begin to remember what documentary that was, let alone find a link to it.
Increase the price of everything and pay a life supporting amount of money per hour of work. No tipping, no more service charge.
This service charge is literally the same but blaming the employees.
This is at least more honest.
Not if you made decisions based on the price on the menu. It’s designed so menu prices look low.
If I can’t afford without the service charge, I can’t afford it with the service charge. Either way I’m lying to myself to justify it. Either the meal is worth it or it isn’t.
I would simply not go to that restaurant anymore and very plainly let them know why. This is greed and I will not reward it.
Much like when I place a to go order and go pick up the order and the POS (point of sale not piece of shit if you’re wondering) system pops up that tip screen. You didn’t do anything worthy of a tip so I will not be tipping you. Now if for example when I get there they apply some discount I wasn’t aware of that makes my bill cheaper, I’ll tip for that. Throw in some extra cheese sauce, tip. Anything above and beyond, tip. Just ring me up and hand me my food, yeah no tip.
It’s this (the service charge) or they raise prices across the menu. Some people prefer this, some people prefer the added cost baked in.
Personally I think the service charge is a little deceptive because you are hit with an unexpected expense at the end of your meal. Even if they’re very up front about the charge most people won’t be automatically calculating the 18% extra on whatever they’re spending, they’re just going to look at the price on the menu.
Some people prefer this
Citation needed.
I think those people own restaurants
They have raise prices across the menu, by 18% to be more specific.
Segregating the price increase as “service fee” is only so that they can deceitfully advertise their prices a lower than they really are, a form of Consumer Fraud (I believe this one is a form of Bait & Switch)
Not quite. A $100 meal would have a routine 15%, $15 tip. Increase the price 18%, and a $118 meal would have an expected 15%, $17.70 tip.
Look at the tip calculations on this receipt: they are based on the price of the meal before the service fee. If this restaurant sold a $118 meal, it’s expected 15% tip would be $15, not $17.70.
They are stealing $2.70 from staff on every $100 check.
Look at the calculated tips. They are based on $95.60, the price of the meal before the 18% service charge.
If they raise their prices by 18%, they would have to raise their tip calculation by 18%.
They are stiffing their employees.
You realize that giving you 5% off so you will tip 15% is still greed though right? The greed is always there, it’s just your perception of how it’s delivered. We expect a little foreplay with our greed.
I didn’t say I was giving them 15%. I give 18% for full service. But a buck or two for something like this.
I don’t return to restaurants that pull this bullshit. Raise your menu prices to provide a living wage or take a hit to your profits.
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Or, you know maybe the owner could live without a 5th cottage possibly?? naaaaaaa
Are restaurants just poorly managed, or is there another reason why they can’t pay their employees a living wage when their markup is like 400-1000%?
Restaurants have notoriously thin margins. I’m not defending this bill, and there are definitely awful practices out there, but it ain’t easy. Even a $34 dollar steak only kind of covers all the ancillary costs that make it happen.
The biggest issue with the crunch we have going on is that food (prepared or otherwise) should be way more expensive, and that shouldn’t be an issue because most people should be making way more money. All of those should/shouldn’ts got way out of whack over the course of decades, and the circus only continued because people found crappy ways to keep it going.
It’s a lot of industries. Construction is a great example. The developers make money. The material vendors make money. The builders make money. The sub contractors who actually put the parts together get haggled on invoices and take the lower amount because they have payroll to make and equipment loans to pay. Loans that are happily given out because the equipment can be easily repossessed.
It’s a very good thing everything is correcting, but it’s going to be an ugly process as workers get their due and pass the burden on to the small business owners.
Sounds like sit down restaurant menus should reflect the actual costs including waitstaff then like any fast food place is able to do.
Wait staff with tips get more than fast food restaurant employees though
That’s a great argument for the manager/owner to do a shit job
Restaurants have notoriously thin margins.
Help me understand.
Assuming restaurants have the same overhead as any other business: rent, staff, insurance, maybe equipment (manufacturing, etc.), what else?
They don’t have expenses like vehicles, tariffs on imported goods, the cost to fly staff out for conferences, tech costs, and so on.
The only difference is the product they bring in, and the product they put out.
As a consumer, who doesn’t get the benefit of industry discounts or high-volume prices, making food is really inexpensive.
When I see a restaurant, for example, selling pasta with marinara sauce for $15-20 a plate, I’m curious to know why they have to beg to cover costs. You can make the same dish for a family of four for under $3, and save $100 you’d spend getting the same dish at a restaurant.
So, again, if the cost of ingredients allows for such a significant markup, well beyond what most other businesses are able to get away with, why are restaurants having to charge “service fees” on top of tips?
It’s the behind the scenes that cause a lot of the markup. There might be only two or three food service providers in your area. Food Service Company A has the same prices as Food Service Company B and C. There is no real competition to force prices down for restaurants.
If you are a franchise restaurant, you have to pay franchise fees, buy your all products from the franchise, work within the certain parameters, etc. There is no real way to find ways to drive down prices since your prices are set by the franchise through the prices of the product, corporate oversight, etc.
Great points!
So I’m stretching it a bit because at the end of the day this really does apply to more than restaurants, but the other commenter had it right.
Things like rent, insurance, etc go into the cost for well above the plate. So the ingredients are one thing, but you have to make up the cost of rent, paying the staff when there’s low customer volume, all the insane amount of costs that go into running a business. That server has to make up for the cost of printing menus and delivering them by mail.
None of this is the servers fault, who should get a fair wage, but it all adds up in a way that makes it hard for the owner. In fact, the person who sold them the grills, refrigerators, and all the other equipment, knows exactly and empirically how hard it is and sets their prices accordingly.
And it’s not like that company’s delivery drivers, techs, and fabrication workers also don’t deserve a wage. Or the Tyson folks that are plucking the chicken delivered.
The issue is, at the end of the day, those companies probably should be less profitable. But instead of accepting that, we put all of the companies that make all the stuff that run that restaurant into bigger companies that are now part of mutual funds, and they sell it out knowing they can grab it back if it goes under.
So you might be able to get away with making a few plates and some money, but trying turning it into something that will let you pay your rent and put your kids into a school. “Bob’s Burgers” is pretty true to life.
This is how to tell someone you haven’t checked grocery prices lately without actually telling them you haven’t checked grocery prices lately. A box of mediocre pasta alone is going to cost you $1.75. A jar of Preggo will run you another 2.50. So 4.25 for an I hate life spaghetti and marinara meal.
The sauce they make probably doesn’t come out of a jar of reconstituted tomato paste and dried seasonings either.
If you buy decent ingredients you are looking at $3 for the pasta and $9 for the sauce. Or $12 for an “ok for a home cook” spaghetti meal with no protein.
Restaurant serving sizes (for better or worse) are usually 2x+ larger than you would serve at home. Rent isn’t free for the restaurant either. Or labor. Or utilities. Or equipment. Etc. General rule of thumb is that a restaurant needs to charge 3x raw food costs to cover expenses.
So your I hate life pasta would need to be priced at $6.50 and your ok for home but not something I would be happy with getting at a restaurant pasta would need to be priced at $18.
This is how to tell someone you haven’t checked grocery prices lately without actually telling them you haven’t checked grocery prices lately.
I’m going to assume you don’t cook at home.
No restaurant worth eating at buys packaged pasta, or packaged bread/buns, or canned sauce.
Flour is cheap, like really cheap. If a restaurant is buying real ingredients, then they are spending pennies and charging tens of dollars.
Restaurant serving sizes (for better or worse) are usually 2x+ larger than you would serve at home.
I highly disagree. I’ve never left a restaurant “full”, even after spending enough to buy a months worth of real food ingredients.
Rent isn’t free for the restaurant either. Or labor. Or utilities. Or equipment. Etc. General rule of thumb is that a restaurant needs to charge 3x raw food costs to cover expenses.
This I agree with. Is rent, labor, equipment at a restaurant significantly more than other places of work? Paying min wage doesn’t exactly eat through your margins.
I worked at a pizza shop way back ages ago (early 2000’s), but I think the formula is generally the same. Food costs they would shoot for 33%, labor ended up being around 33%, the rest was overhead for the facility (rent, AC, etc) and profit.
I think that’s actually a pretty fair amount of profit in that. But that was almost 20 years ago. I feel like the formula is likely similar though.
So way late, but no that’s shifted a lot. This is anecdotal but does speak to a lot of industries: my understanding is that pizza shops now live or die by cheese prices.
Labor, while fluctuating, doesn’t move a ton month to month. Dairy can.
That’s like I said anecdotal, but broadly, real-estate, equipment purchase/finacince has all been so hyper optimized it squeezes the business owners out.
It doesn’t matter the market. PIZZAOVEN-XL will sell it to you, let you leverage payments against your home equity, grab it back and resell it. They can deal with the cash flow issue. They are “assembled in America”. They don’t care if you go out of business. They’ll do it again for the same person that moves into the same space trying to do the. Exact. Same. Thing.
And I’m not trying to draw a blanket statement across all industries. I’m just saying the wheels that make every industry move are smarter and literally longer lived than anyone starting out, and there’s a reason “John deer” and “John deer finance” are seperate companies.
Cheap sub contractors need so much constant control to make sure things are delivered on spec that it is almost like it costs more than to hire the more expensive company with a reputation for solid work
Saw exactly this when I was doing commissioning for a large municipality. No matter how tight the specs were, some of these knuckleheads would do it their own way and get mad when we forced them to do it right.
Some of them would just claim bankruptcy if the mistake was big enough.
Pro-tip, friends: don’t pick the lowest cost of construction bids, I guaran-fucking-tee it’ll cost you more than you saved. And, anyone who says they “meet code” is really saying they do the bare minimum required.
Completely fuck this shit.
$16.25 for a kids size pasta dish?
I feel like I have seen multiple receipts from this same place, likely posted by the same person, because I remember noting $16 Kids Shells on some other thread months ago.
Seems odd. They should really stop going.
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The $5.00 glass of lemonade is ridiculous. Water and a small scoop of powdered flavoring/sweetener costs them about a quarter.
