9 ms·

This is an odd title. The article gives an interesting explanation for why, theoretically, a restaurant would choose to go with a service charge rather than a

This is an odd title. The article gives an interesting explanation for why, theoretically, a restaurant would choose to go with a service charge rather than a tip-based system, but doesn't contain many observations from the now-tipless restaurant. The whole idea of mandatory "service charges," or "fees," in any business, is kind of bizarre. It seems strange that we've accepted that certain types of businesses (airlines, hotels, ticket brokers, in some cases restaurants) should list prices that differ significantly from the actual price charged. There does seem to be some backlash against this practice: Kayak, Hipmunk, and many other travel sites now list the full price of airline tickets (though, often, not hotel rooms, with their "facility charges," whatever those are). And today I noticed that StubHub now shows prices inclusive of all fees. I understand why a business would like to list prices that are 30% lower than what the customer actually pays, but it seems a little odd that we're all OK with it.

mikeash 13y ago
I agree, it's crazy. Seems like a slam-dunk case of false advertising if you say something costs $X and then you actually charge $Y. If a restaurant wants to charge more so they can pay their staff a wage that doesn't require them to live off tips, then great! I'm all for it. But then they need to list their higher charges, not just tack on an extra 18% (or whatever) on top of what they advertise.
- venomsnake 13y ago
  When I have been in that kinds of restaurants (not in the US) there is always stated on the menu that X% are added. But since we in Europe are used to being advertised pre-VAT prices I suppose it is not a big deal for us. Also I have seen wine/birthday cake charges - the establishment allows you to bring your bottles of wine if you pay X EUR per bottle, same with the cake.
  - masklinn 13y ago
    > But since we in Europe are used to being advertised pre-VAT prices I suppose it is not a big deal for us. Wait, what? In most of europe, all prices listed must be VAT-included, unless they're specifically business-targeted. I'm pretty sure VAT-excluded advertisement would be fraudulent there. Prices are often noted as both VAT-included and VAT-excluded at the point of sale, but the most prominent one is VAT-included.
- smackfu 13y ago
  >Seems like a slam-dunk case of false advertising if you say something costs $X and then you actually charge $Y. The key is that they don't charge you $Y. They charge you $X and then give you a blank line to choose to pay more. Of course, there is pressure to tip, but if you choose to not tip, the restaurant can't come after you for that money.
  - mikeash 13y ago
    We are discussing situations where the establishment adds a "service charge" or similar to the bill, not a blank tip line.
    - smackfu 13y ago
      Oops. Well, in that case, I don't see a lot of service fees at restaurants that don't have a notice of it on the menu ("18% for groups over 6"), which I would assume covers them.
      - jmharvey 13y ago
        This article is about service fees at restaurants
DanielStraight 13y ago
Relevant to note that almost no American businesses include sales tax in their listed prices either. (Though it's required in some countries [at least in some circumstances].)
- JanezStupar 13y ago
  Yes as an European I find it really odd how Americans get to put up with consumer abuse, just because "this is the way things work". And this is the country where supposedly everything is done in the name of consumer. And listing taxless prices and hiding the cost of service from me by expecting me to tip waiters. This is also the reason why I find this article distasteful. So if you are really that sure about your position, why the hell don't you raise your prices 20% or even 30% for that matter. And when people ask you why are you so expensive, you can tell them that you pay your people fairly.
  - masklinn 13y ago
    > And when people ask you why are you so expensive, you can tell them that you pay your people fairly. Or they can see the notes about "no tipping" and "service charge: included in prices"
    - deleted 13y ago
      [deleted]
  - doktrin 13y ago
    > This is also the reason why I find this article distasteful. So if you are really that sure about your position, why the hell don't you raise your prices 20% or even 30% for that matter Unless they have forged a particularly tight bond with the community, simply raising prices is a sure fire way to lose potential customers. Tipping is so ingrained in American restaurant culture that everyone assumes it to be in place. Unless they have a gigantic sign that flashes "NO TIPPING" in neon colors, you can bet that anyone scanning their menu will just assume it's a really expensive restaurant.
nonchalance 13y ago
What are your thoughts about restaurants that charge service fees for parties of X or more (usually X = 6 although I've seen higher)?
HelloMcFly 13y ago
Airlines, at least, are now required to advertise the final price.

mikeash 13y ago

I agree, it's crazy. Seems like a slam-dunk case of false advertising if you say something costs $X and then you actually charge $Y. If a restaurant wants to charge more so they can pay their staff a wage that doesn't require them to live off tips, then great! I'm all for it. But then they need to list their higher charges, not just tack on an extra 18% (or whatever) on top of what they advertise.

venomsnake 13y ago
When I have been in that kinds of restaurants (not in the US) there is always stated on the menu that X% are added. But since we in Europe are used to being advertised pre-VAT prices I suppose it is not a big deal for us. Also I have seen wine/birthday cake charges - the establishment allows you to bring your bottles of wine if you pay X EUR per bottle, same with the cake.
- masklinn 13y ago
  > But since we in Europe are used to being advertised pre-VAT prices I suppose it is not a big deal for us. Wait, what? In most of europe, all prices listed must be VAT-included, unless they're specifically business-targeted. I'm pretty sure VAT-excluded advertisement would be fraudulent there. Prices are often noted as both VAT-included and VAT-excluded at the point of sale, but the most prominent one is VAT-included.
smackfu 13y ago
>Seems like a slam-dunk case of false advertising if you say something costs $X and then you actually charge $Y. The key is that they don't charge you $Y. They charge you $X and then give you a blank line to choose to pay more. Of course, there is pressure to tip, but if you choose to not tip, the restaurant can't come after you for that money.
- mikeash 13y ago
  We are discussing situations where the establishment adds a "service charge" or similar to the bill, not a blank tip line.
  - smackfu 13y ago
    Oops. Well, in that case, I don't see a lot of service fees at restaurants that don't have a notice of it on the menu ("18% for groups over 6"), which I would assume covers them.
    - jmharvey 13y ago
      This article is about service fees at restaurants

DanielStraight 13y ago

Relevant to note that almost no American businesses include sales tax in their listed prices either. (Though it's required in some countries [at least in some circumstances].)

JanezStupar 13y ago
Yes as an European I find it really odd how Americans get to put up with consumer abuse, just because "this is the way things work". And this is the country where supposedly everything is done in the name of consumer. And listing taxless prices and hiding the cost of service from me by expecting me to tip waiters. This is also the reason why I find this article distasteful. So if you are really that sure about your position, why the hell don't you raise your prices 20% or even 30% for that matter. And when people ask you why are you so expensive, you can tell them that you pay your people fairly.
- masklinn 13y ago
  > And when people ask you why are you so expensive, you can tell them that you pay your people fairly. Or they can see the notes about "no tipping" and "service charge: included in prices"
  - deleted 13y ago
    [deleted]
- doktrin 13y ago
  > This is also the reason why I find this article distasteful. So if you are really that sure about your position, why the hell don't you raise your prices 20% or even 30% for that matter Unless they have forged a particularly tight bond with the community, simply raising prices is a sure fire way to lose potential customers. Tipping is so ingrained in American restaurant culture that everyone assumes it to be in place. Unless they have a gigantic sign that flashes "NO TIPPING" in neon colors, you can bet that anyone scanning their menu will just assume it's a really expensive restaurant.

nonchalance 13y ago

What are your thoughts about restaurants that charge service fees for parties of X or more (usually X = 6 although I've seen higher)?

HelloMcFly 13y ago

Airlines, at least, are now required to advertise the final price.