5 ms·

If there is a flat 18% service charge, why not just add 18% to the base prices and get rid of the service charge? Or does a restaurant have to 'hide' these cost

If there is a flat 18% service charge, why not just add 18% to the base prices and get rid of the service charge? Or does a restaurant have to 'hide' these costs as an added percentage in order to make their prices seem reasonable?

jessriedel 13y ago
If tipping weren't customary, then I'd agree with you that the service charge is just an obnoxious way to hide the true price (a la ticketmaster). But in US restaurants, the diner's expectation is that they will pay 15-20% on top of the listed prices for the tip. So long as the no-tipping policy and 18% surcharge is made clear on the menu, I don't see a problem with this.
- DanielStraight 13y ago
  Agreed. If I didn't see a service charge, I would assume that I was supposed to tip. If my tip was then refused, I would just be confused and make them explain the whole system. Easier to just say that service is a fixed percent charge and meet expectations.
dfxm12 13y ago
Or does a restaurant have to 'hide' these costs as an added percentage in order to make their prices seem reasonable? You hit the nail on the head here. Some places "hide" this charge better than others. I once had another patron at a place let me know that my check already included tip so I wouldn't double tip, as my check just had a total on it. It wasn't itemized at all. That seemed pretty dishonest to me.
- agf 13y ago
  I have a friend who worked at a chain restaurant where they circled the total on the receipt with a black sharpie. It was the standard practice of all the servers there to make sure the circle went through the item showing the included gratuity for parties of six or more. Apparently, as a result, they'd get double tipped for large parties about 50% of the time.
  - gohrt 13y ago
    I would love to see that story hit the local news or a racketeering suit.
- ahultgren 13y ago
  You saw the exact price beforehand in the menu, it's the same on the bill, you seemed to be ready to pay even more, and they told you you don't have to pay more. How is that dishonest?
  - dfxm12 13y ago
    You misunderstand. The prices listed on the menu did not include the automatic gratuity. Even if I added everything in my head, there's still other fees not included like tax. I didn't think twice about it because I've been to this place before & they didn't have an auto grat. They tried to sneak it in under the radar after years of operating without it. Also, as I said, the "they" in this situation was another patron, not a worker at the restaurant.
yungchin 13y ago
I always assumed that only the servers and not the business owe income tax over this part of the bill. Also, don't credit card companies waive fees over tips? edit: hmmm, it seems the latter isn't even close to true!

jessriedel 13y ago

If tipping weren't customary, then I'd agree with you that the service charge is just an obnoxious way to hide the true price (a la ticketmaster). But in US restaurants, the diner's expectation is that they will pay 15-20% on top of the listed prices for the tip. So long as the no-tipping policy and 18% surcharge is made clear on the menu, I don't see a problem with this.

DanielStraight 13y ago
Agreed. If I didn't see a service charge, I would assume that I was supposed to tip. If my tip was then refused, I would just be confused and make them explain the whole system. Easier to just say that service is a fixed percent charge and meet expectations.

dfxm12 13y ago

Or does a restaurant have to 'hide' these costs as an added percentage in order to make their prices seem reasonable? You hit the nail on the head here. Some places "hide" this charge better than others. I once had another patron at a place let me know that my check already included tip so I wouldn't double tip, as my check just had a total on it. It wasn't itemized at all. That seemed pretty dishonest to me.

agf 13y ago
I have a friend who worked at a chain restaurant where they circled the total on the receipt with a black sharpie. It was the standard practice of all the servers there to make sure the circle went through the item showing the included gratuity for parties of six or more. Apparently, as a result, they'd get double tipped for large parties about 50% of the time.
- gohrt 13y ago
  I would love to see that story hit the local news or a racketeering suit.
ahultgren 13y ago
You saw the exact price beforehand in the menu, it's the same on the bill, you seemed to be ready to pay even more, and they told you you don't have to pay more. How is that dishonest?
- dfxm12 13y ago
  You misunderstand. The prices listed on the menu did not include the automatic gratuity. Even if I added everything in my head, there's still other fees not included like tax. I didn't think twice about it because I've been to this place before & they didn't have an auto grat. They tried to sneak it in under the radar after years of operating without it. Also, as I said, the "they" in this situation was another patron, not a worker at the restaurant.

yungchin 13y ago

I always assumed that only the servers and not the business owe income tax over this part of the bill. Also, don't credit card companies waive fees over tips? edit: hmmm, it seems the latter isn't even close to true!