At East Coast Aero Club if we posted prices for our aircraft and then charged customers an additional 21 percent “service fee” or “administrative fee” they would presumably be upset. In fact I wonder if it would violate some sort of regulation either federal or state. Yet restaurants are supposedly trending in this direction. This New York Times article says that, in our new Obamawage era, tips are being eliminated in favor of mandatory-for-all-customers 18-21-percent fees added onto the menu prices. U.S. merchants have gotten away with this practice with respect to sales tax, unlike their European and Asian counterparts. But can they actually do this for a fee that is charged to every customer and that they always collect?
Could I run a restaurant and advertise that pizza is $2, the cost of the ingredients, but then have some fine print at the bottom of the menu saying that customers must also pay a 500 percent “prep and service fee”? If not, how is it legal to do the same thing with a smaller fee percentage?
You don’t seem to get out much. As you mentioned this has been going on in the US with respect to sales taxes for what seems like forever, but increasingly whenever I buy something, other than booze and really basic household items, I’m surprised if there are not assorted hidden fees, mandatory upgrades, and service charges attached. I’ve found it is good practice to mentally price things at 125$ of the advertised price.
But the voluntary-but not really tip is a US thing. In other countries its standard to put service charges on the bill, or actually have the restaurant owners pay the entire wages of their employees and raise prices if needed to cover this.
Phil asks if he could run a restaurant with prices accompanied by some fine print of a 500% “prep and service fee” surcharge.
Presumably, yes. Whether you’d have any returning customers is another matter.
That said, the truly-medieval American practice of restaurant prices PLUS obligatory tips to servers is unbecoming to the latters’ dignity, and generally baffling to Europeans, to say the least (which is why we don’t tip). The up-front stated extra 21% charge of any meal’s nominal price is a step in the right direction, but oh-so-convoluted in terms of consumer comprehension, cowardly, and ultimately self-defeating. It’s capitalism at its worst, trying to appear cheaper than it really is.
If people vote with their dollars, the restaurants won’t get away with it. I guess you could refuse to pay more than the advertised price, and take it to court to resolve it.
I think that as a practical matter, if a restaurant wants to do away with tipping, they have to do it this way as a matter of perception. Customers are (a) used to paying an approximately 18% or more tip to begin with and (b) used to seeing menu prices without the tip. So if restaurant A says that its entrees are $28 (not including service – leave a tip) and rest B says our entrees are $34 (service included) they will be perceived as charging more even though they aren’t. But if B says their entree is also $28 but with an asterisk saying a 21% fee will be added, they won’t be perceived as being overpriced.
What is terrible is when the restaurant adds an 18% (or more fee) (some restaurants have been doing this for parties of 6 or more for years now) and doesn’t make it clear that they have done so – when this happens, it always seems to me that they are hoping you will not notice and double tip (esp. since the credit card receipt still has a line for tip).
“An entree for $28″… what is it, a gold-plated shrimp salad?
And then the main course, a steak the size of Texas for $65, no doubt.
People willing to pay such prices for PO$H SUSTENANCE deserve to be fleeced.
Meanwhile, in Europe, the environmentalist lefty UK hack George Montbiot has just demonstrated on primetime BBC Newsnight programme REASONS WHY (“meat is meat & shouldn’t be wasted”) and how to prepare roadkill squirrels[*] – complete with skinning & beheading the carcass with a mid-sized hatchet ON CAMERA. Come to think of, guinea pigs are common household food fare in the poorer regions of South America, so why not here.
[^*] of which there is an abundance in the UK, alongside badgers (and both species are periodically culled)
The cruise ship industry has been doing this for years. When you book a cruise trip, you are given your total cost up front and billed for it. But wait, when you leave your cruise, the night before you get the bill itemized and there you will see mandatory tip of $20 per person per night. This can add up quickly if you are a family of 4 or more: an extra cost you were never told about up front or charged up front.
This was a big surprise to me on my first (and last) cruise vacation.
PS: I learned after the fact that you can up / down the mandatory tip on your last night. But it takes a lot of effort to down it or bring it to $0.
From the American perspective, customer service in Continental Europe leaves much to be desired, but to be honest, I’d much rather have the 21% service fee included than to deal with the tipping game in the States.
First of all, the constant interruptions during your meal every 10 mins. Is everything OK? Do you need a refill? Please, if I need anything I will call you over, let me enjoy my meal in peace. And stop trying to make the bill go up. Also the urgency to move people out of the table is annoying. In Vienna, and most of Europe, you can buy a single coffee at a cafe and sit there for hours if you like.
What can be annoying in Europe is if you are on a tight schedule and need to leave, at some places if the service is bad, it can take a while to pay the bill. But this only happens when the place is understaffed.
It depends on your philosophy, if I go out for a meal at a restaurant I go there to relax and enjoy the food and time. Sometimes I see people treat the wait staff a bit rudely. It’s like having a new boss every table.
@ George A.: out of curiosity, what would have happened had you refused to pay up the hitherto-undisclosed obligatory “hospitality” surcharge… would they prevent you from disembarking (in effect make you a hostage)?
@ GermanL.: let’s not overgeneralize… there are good waiters & bad waiters everywhere (the bad waiters’ function is to prevent obnoxious guests etc from returning). Rule of thumb seems to be, if you’re known to the staff/ big spender/ tipper, you’ll be met with less intrusive/ better service. No establishment wants to look empty, therefore, outside the rush/ lunch hours, (in Europe as a rule) one gets to “roost” in a caff in the “dead hours” even on a couple of coffees. However, in my limited experience, there a vast difference in how Americans & Continentals treat a restaurant visit: for the latter it’s primarily a place to feed ourselves outside of home/ the local, a meeting place with occasional guests. For “the Yanks,” it’s more of showing off/ treat own guests & being treated—both culinarily & Downton-Abbey-wise. Generally speaking ;-))
One aspect where the US is way ahead of the rest of the world is the art of making things appearing to cost less than they do. It is absolutely ridiculous and offensive not to display prices without taxes. When it comes to hotels there are also extras like resort fees that defy any logic (other than greed). But of course the most obnoxious are restaurants. I think including the tip in the price is a good start, and being applied everywhere levels the playing field so a given restaurant can’t appear to look cheaper by not including the tip (or an extra “prep and service fee”).
Also, the way the sales tax is applied benefits everyone but the consumer. In restaurants, we are supposed to tip over the whole amount, therefore we are paying 15-20% of the sales tax itself (presumably this is to reward the waiter’s ability in hiding the tax from us). Another example is buying a car battery. You pay the amount plus some state recovery fee (given back when you return the old battery). The sales tax is charged on the total (battery + fee). You return the old battery and you are reimbursed only for the fee, not the taxes on the fee. The merchant pockets the difference.
@ianf : Americans have a problem with French, and do not realise that “entrée” means the entrance plate (served before the main meal). Perhaps to sound fancy, restaurants have adopted the puzzling choice of naming their main meals “entrées”, while the first plate is called “appetizer”.
Ian F. – sorry I was speaking Amurican and I forgot that this blog has a global (for all I know, interplanetary) audience. As Tiago says, somehow in Amurica the entree is the principal plate (main course).
Rental cars, anyone?
I lived in New Zealand for 6 months with European-style no tipping restaurants.
Service ranged from not-so-good to pretty terrible, even in expensive restaurants. It helped me appreciate a tipping system back here in the US much more.
Wait a second… I distinctly remember every flight school in California tacking on a “Fuel Surcharge” to their posted “wet” rates (circa 2008). (also, don’t get me started on so called “resort charges”)
@ Sam “Service ranged from not-so-good to pretty terrible, even in expensive NZ restaurants.
Clearly, you chose wrong places to visit. Always have a backup strategy for eating out: when ordering inquire how long it may take. If they can’t say, or it’s >30 min, leave. Else, if the “entrée” is not arriving within 5 minutes of stated “time window,” get up, pay for the water etc., and leave. They’ll ask you to stay, offer complimentary house wine, etc. Mention Yelp or Tripadvisor in passing within the earshot of the maitre d’/ equiv. Tell all your friends. Go to a fancy pizza place, they’re pretty predictable for time, quality, and filling (if kosher is your bag, have a list of Kosher Pizzerias in your pocket ;-)).
@ Izzie L.
If these your American main courses were renamed “entrées” (of a common Anglo-French etymological root after all), what “followup,” or by whom, were these “semantically upending” restaurant owners thinking of… Diamond Jim Brady?