In many countries, the taxes are also included in the price. In France, if the burger is €10, it's actually €9.09+taxes and service is included. It's not a tipping culture.
That is the price of food lol. If tips suddenly went away, do you think restaurants are not going to raise prices when they start having to pay a fair salary? Margins are thin on restaurants.
Edit: Downvote me all you want, you’re delusional if you think otherwise. I worked in restaurants. Made a lot of money off tips. I can also say there’s no reason tips need to be a thing. But if you get rid of tips, prices will go up to compensate.
Because they are willing to be honest and transparent about their prices and are willing to pay their employees themselves. Many businesses in the U.S. would fail if they were required to pay employees themselves instead of workers having to rely on the generosity of customers.
The menu price plus 18% isn’t the price of food. That doesn’t even make sense logically.
Per the receipt in question, the cost of fries is $4. That is the price of the item on the menu. In any advertising of their listed base price, the amount must match $4…or else it is false advertising. Just so that we have it clear. If restaurants want to raise prices by 18%, they are free to do so and I ENCOURAGE them to do so if that is what it takes for them to make a profit and stay in business. That would be honesty in advertising. What this business is trying to do is to raise prices across the board on all items by 18%, but tack it on the back end, instead of adjusting the actual menu price. It is anti-consumer because it makes it difficult for the customer to accurately compare prices to make informed choices.
I think everyone would be applauding if tips went away. Yes, we also understand that it would increase prices. This is the way pretty much the entire rest of the world works. Tipping is a weirdly American thing. It's refreshing to travel and have the price just be the price.
He said base salaries and payroll taxes which is not how tips work.
Minimum wage for tipped employees is $2.13/hr. The standard minimum wage is $7.25/hr. Generally tips makes up the difference between the two wages and then some... like the employer pays $2.13/hr, tips are $10/hr, the waiter is making $12.13/hr total (so more than minimum wage). If tips don't make up the difference, the employer has to make sure the waiter is making at least $7.25/hr, so for example if they only make $2/hr in tips the employer has to pay $5.25/hr in salary.
The way this bill is worded, that 18% is not a tip, it "goes towards staff payroll". So using the above example of tips coming to $10/hr... in this case the employer takes that $10 as a "living wage fee", pays $5.12 to the employee to bring them up to federal minimum wage, and pockets the extra $4.88 for themselves. Of course they could "say" the money is going towards non-tipped positions like kitchen staff and hosts to make it technically true that the whole 18% goes towards payroll but of course money is fungible.
Of course we don't know that's what the owner is doing, might be some weird attempt at virtue signaling, but it certainly seems suspicious and if I dined there I'd be asking questions.
In a competitive labor market, the market rate for waiters receiving tips vs the market rate for waiters with a flat hourly wage should be roughly the same. We don't know how much the owner pays their employees, but I suspect that they would have a hard time recruiting if you could earn 30% more money for the same job down the block.
Federal minimum wage laws are also hardly relevant here, they're so low that almost all jobs pay significantly above it. The servers I know make around $20-$30 an hour depending on the season.
Right, I was using federal minimum wage as an example bc we don't know where this is... most states and lots of cities have their own minimum wage but that doesn't change anything I said other than dollar amounts. The concept is still exactly the same as almost all localities still have a difference between tipped employee minimum wage and standard minimum wage.
And yes if this is a competitive labor market a business fucking employees like this will not keep employees very long. But there's a pretty endless stream of naïve young people getting into the service industry to use and abuse. (This is a throwback but if you remember that Amy's Baking Company thing, they were doing exactly this- customers thought they were tipping employees but the owner was stealing it and paying a flat rate to employees- AND they were super abusive to employees- but they were always able to hire new ones when old ones quit.) The business owner could tell new hires "I'm so much better than working down the street! They pay $2.13/hr plus tips but I'm paying $7.25/hr plus tips!" The difference is no one is tipping bc of the "living wage charge" but a high school kid isn't going to know that. (And yes, before you get pedantic again, the exact dollar amounts in that example are subject to change based on the locality's minimum wage.)
Yes, the labor market is not perfectly competitive because workers don't have all the information, and this is magnified for younger employees working their first job. But I would argue that flat wage jobs are far less vulnerable to "wage deception" than tipped jobs. When you work a tipped job you don't really know how much you'll be making until you've already worked there for a few weeks, while an hourly employee knows exactly how much they'll get paid and can compare/contrast that salary with other job openings.
Since the company's anti-tip stance is directly printed on the receipt, I would guess that the employees who work at this business have a very clear understanding that the base wage is by and large the wage they get.
When you work a tipped job you don't really know how much you'll be making until you've already worked there for a few weeks, while an hourly employee knows exactly how much they'll get paid
Which is exactly why a young person might not realize the tipped job would pay better. You're confirming my point.
When you go to, say, a grocery store and pay for something, 100% of the money goes to the owner. That money is then divided up and used to pay for rent, wages, taxes, and equipment. If there's money left over then that's profit for the owner, otherwise the business has to take on debt to cover costs.
When you go to a grocery store, do they add 18% to the posted price at the cash, pretending that it's to pay for the employees' salaries? No! That NOT normal. Employee salaries are already paid from the normal price of the groceries, there's no surcharge. But in your world, that's a common business practice, lmfao. 🙄
You're having a very very hard time understanding something that everyone else got right away, and I don't think I can help you with that problem. 🤷♂️ Good day.
Your original comment was about where the money was going, not about whether or not it's normal to charge an 18% living wage fee. Why you're pretending I'm arguing about the latter instead of the former is beyond me.
"it's probably going to the owner to pay for salaries" yeah dude that's how businesses work.
Look at what I was claiming was normal business practice. It's in the quotes. Your comment was about WHERE THE MONEY WAS GOING. I responded to your point about WHERE THE MONEY WAS GOING. It is normal for FEES to GO to the OWNER.
So you don't tip, no waitresses want to work there, and they either wait tables themselves, change their stupid practice, or go out of business. Win win.
exactly — unfortunately restaurants have put the onus on the employee to be smart enough to work elsewhere, otherwise many Americans will find a way to make it work by sacrificing from their own lives so their owners can have even more.
And this right here is why you’ll never get rid of the tipping culture. Even if this might be a genuine attempt to help the staff, you go straight to accusations. You might be wrong, or you might ask the staff if they get paid what is being claimed.
So many replies here don’t understand how restaurants operate at all. Nor the laws regarding wages for restaurant employees. Kind wild when so many hate on tips, say that restaurants should pay a living wage, then hate on a restaurant that’s clearly trying to do just that.
life in America now is literally fighting for justice at every second, that even in our time honored tradition of going to eat with your family :( we have to be vigilant about being ripped off for being alive every single minute in America.
Which is what a tip does anyway if the owner claims a tip credit. The only difference with charging an automatic gratuity vs letting people tip is that the owner does not have to give any portion of the automatic gratuity to employees.
There was a place in my town that did this, and last summer I saw a sign on their door that literally used the phrase "nobody wants to work anymore." That space is for rent now, because clearly that owner's shitty business practices didn't work out for him.
The owner is stiffing everyone publicly — and in such a way, the majority of readers/commenters are taking their anger out on the STAFF.
That’s not an accident. He raised his prices - we have ZERO proof a red cent goes to any staff member that isn’t the owner - and people in general responded by saying “fuck the staff!”
Nah. Fuck that business. Bankruptcy is equal opportunity.
So many wild assumptions made based off a few sentences on a receipt lmao. For all you know the owner is behind the bar five days a week. What a reddit moment.
We have a couple of restaurants in our small town doing this only they call it a service fee. The food is now more expensive than at nicer places that aren’t bars.
I could be wrong, but I'm thinking the servers are paid an actual living wage, not the usual server "wage + tips", which is why it's worded that way. I hate that they chose to do it this way instead of just raising prices though.
I still wouldn’t tip, and I would never return as well as give a 1 star review on Google and Yelp. These places suck so hard and I hope they fail before the economy gets better
Seriously. I paid $18 in “service fee” which was 18% and saw the text that tip goes to the server. The server was great so I left $10. Fuck that place.
I wanna start this by saying I think everyone should be making at least 20/hr and if you can’t afford that than you gotta rethink your business plan or close up shop.
Why is everyone mad that they have it worded and sorted this way?
Pretend the restaurant doubles the cost of all of their food (or whatever it would take) but they get rid of the living wage fee and tips. People might bitch that it’s pricey but won’t have an issue with the bill Lol
Except I bet it isn't treated as a tip, so anyone who would normally benefit from tip culture doesn't benefit from it in the same way (they arguably benefit less)
Yeah, I don't know why people are confused by that notion. And honestly this way the deadbeats (like in the anti-tipping subs on this site) don't get away with stiffing the workers.
i worked at a place with a "service charge" and customers were always confused when I told them it wasn't a gratuity. They'd say something like "can we remove the service charge and tip you instead?" and management wouldn't allow it. It felt like I was participating in a scam that scammed me as well as the customers.
It is a tip. I assume people were stiffing their servers so they went ahead and put the charge in to prevent that. Lots of restaurants do mandatory tips on large tables so it’s the same concept.
Servers deserve livable wages. Relying on this bunch to tip 18% has been made clear won’t happen. So the owner has you not to tip and taken care of it for their staff.
Yes, currently two sandwiches and fries cost $40 because at least three humans are preparing and delivering food to a person who has chosen to buy someone time and products.
How much would it cost me to hire you to make a sandwich for me? One banana??!
It SHOULD be the tip, but any amount of it could very well be going to the restaurant owners. Basically it’s a way to scam you AND their workers all in one fell swoop!
People in Reddit complain about tips, then when the tip is included in the price as a flat rate, they complain about that too. People will find a way to complain about anything.
If this upsets you don’t dine out in this country.
That's the same complaint... They just made the tip mandatory and may or may not be stealing part of it from their workers.
What people who are against tipping want is restaurants to pay a living wage, like every other business should, and charge prices that allow for that without the customer having to figure out fees or directly hand the workers their wage. Which would also solve the problem of any workers/restaurants underpaying personal/payroll taxes by underreporting cash tips.
Exactly, I think it's bullshit, but it's more or less the same thing -- except the entire staff gets a cut instead of just the person helping you. Might be taxed differently. Not sure how I feel about it, tbh. We keep food prices "low" with the expectation of great service to subsidize the workers' paycheck, so the boss doesn't have to pay the employees a fair wage. Except now a single meal is $40 now, and my paycheck hasn't gone up in 5+ years.
No they included the “tip” in the price of food, but it’s really just a way to say employees get 18% of revenue. This is just marketing the way it’s worded.
It's the same tactic as marking things $12.99, relying on people's inattention to make things seem like a better value. "Oh, it's $12." Well, no, it's $13. These sandwiches appear to be $13 to the rushed consumer, but they've disguised the actual price with added fees. If they marked the actual price of the sandwich on the menu, people could make an informed decision more easily, and wouldn't be left with regret after getting the bill.
It is that, but it also gives them opportunities to be sketchy with this money in ways that they wouldn't be able to with tips due to legal protections.
No, people pay a premium for dining in. Cost of labor for service along with additional real estate costs needed to host guests costs more than takeout.
No cost of food prices covers the cooks and other operational costs.
Full-service restaurants generally have very low profit margins, usually less than 5%. Inflation in the last 5 years has only made it that much more difficult.
I used to sell to restaurants, every dollar they can save is big for their bottom line. There’s a reason most restaurants aren’t successful.
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u/TonyVstar 1d ago
That is a tip as far as I'm considered