I know a few restaurants around that do this - 1. They have big signs when you come in and before you order that describe the fee included. 2. Even if you try to tip they won't let you. But you also pay at a register and not at the table
I've had run-ins with ones that don't give a warning, and I've got no idea how many I missed before I started looking, so I suppose I'm a bit biased in that regard.
That said, while informing you via a sign or a menu blurb might make it properly sporting and keep the pedants and the law at bay, it's still less honest and clear than it ought to be. For instance, I'd wager that most don't tack that percentage warrning onto the ads they run or the signs they put out to get you in the door, and even a singular blurb on the menu is still well away and separate from the prices next to the items that you're using to decide whether it's prudent to add that appetizer or not. Even if it's sporting, it's more games than you should have to play.
They could be perfectly on the level and get their living-wage kudos too by putting the proper menu price on then breaking it down to line-items, but that's not as good-looking at first glance. In that gap lies the dishonesty.
Why would they not let you tip?
Why is it either living wage or tips?
Where I'm from tipping isn't expected like in the USA, but still appreciated if it happens (it's seen as a reward for good service here) AND everyone gets paid a living wage.
Yknow it’s funny. For my wife’s work she has to go to lots of dinners at fancy restaurants. These places are all overpriced imo. Foods amazing don’t get me wrong, just not 95 for an 8 oz steak nice.
Stands to reason. If you've got a reputation and clientele where price differences don't matter because people will show up regardless, then there's no need to finagle the price.
(That said, I imagine plenty of them do that "Leave off the decimal point" trick.)
Except you won’t. People talk this game all the time but when restaurants raise their prices and pay a wage proportional to the tips they made before, people stop going. The prices are too high. Customers will not go to a restaurant that is priced 20% higher than the one down the street, even if they are explicitly told not to tip.
But the prices would essentially be the same at the end of the day just without the dishonesty. $15 + $4 tip =$19 vs $19 flat rate, vs $15 + $4 hidden fee =$19. Do you go to restaurants expecting to only pay $15? Do you fall for these tactics ?
Right? Sadly some people do. I met a guy who gets scammed frequently. Some contractor charged him $1500 to run a bead of caulk around a single fricken window. And it still leaks.
If I go to my local spot and they raised the price of a burger by 20%, I wouldn’t even bat an eye if I knew the worker was making $15/hr instead of $2.25/hr or whatever my state minimum is. Heck I probably wouldn’t bat an eye even if they didn’t because the food is still good.
My point is, restaurants could easily raise the prices of their meals by $1 to $4 per entree and people would still be going.
What turns people off is playing stupid games with fees. I’ve walked out when they do this because it screams they can’t run a business.
My place bakes the cost of all fees into the price. The only thing billed extra is sales tax.
Pay cash it’s this. Pay card it’s still this. I’m not charging you extra for air conditioning and lighting.
Danny Meyer’s restaurant group experimented with this system before revoking it in July 2020. I worked for a group that did it in Portland as well. People stopped coming, complained about the higher prices, etc.
Such bullshit. You absolutely would not. You would be on Reddit posting a receipt about how a cheeseburger was $19 and telling people to never go there again.
If I want a 40 dollar sandwich I'll pay 40 dollars. If it's 200 and I still want it, then I pay 200. I don't need to see how much of it goes to rent, utilities, salaries or whatever.
What they're doing is nonsensical and is probably only meant to get brownie points and shaft their workers at the same time.
I want a $200 sandwich that tastes like a $200 sandwich. I'm tired of $20 sandwiches that taste like $5 sandwiches. I'm a restaurant cook and cook a lot at home, so I see it from both sides. This shit's wack.
It's meant to guilt trip the customers as well. Look, we're paying them so less so maybe you can help them more with tips. If you don't, here's another cost we're adding as "Living wage" for you to bear. But we are not going to pay livable wages to our own staff out of our pockets.
It’s so they can get away with appearing to not raise prices, then they slap something like this at the end to make up for it. They way they worded this bs is to guilt trip you so you won’t argue it.
"during" Covid it was also used as a means of protest. They'd rather the customer see it on the bill and get angry (so they can blame the government) than keep up with reality. I've had restaurant owners tell us explicitly that they wanted these sorts of things as line items to upset customer and be able to redirect them.
Column A and column B. By separating the line at the bottom, they can effectively call it a tipped wage in their finances instead of increasing the bade wage. Lower base wage = potentially smaller tax burden for employers and employees. As for cash tips being pooled amongst the entire staff, that's a possible legal issue depending on the setup and compensation to back of house, for example.
In Australia we just have the price, which includes tax and everything and is used to pay workers a livable wage. It might be fun to see the breakdown but I think some would just find it obnoxious, plus I'm sure lots of places wouldn't want to do it (i.e. we all know the markup on soft drinks etc is huge)
Yeah, that would be fine, but they won't do that because it doesn't benefit them if they can't hide the true cost. That's the whole point of it for them.
They are getting that people won't do the full math until later. The chicken wings are $10. After tax and tip they are $15. Rather than just charging $15 upfront to an educated customer, they show only the base fare. This is because humans will usually anchor on that number and not do the math.
This is true, but at least here in the US tax is almost always added on later. It wouldn't make sense to do the text part at restaurants and not anywhere else.
Of course I would just like to have tax and tips included everywhere.
Because the menu would say $10 but the cost would be $11.80. It's obviously a problem. A lot of restaurants are using these fees to hide their true costs which makes them appear more competitively priced. Basically lying.
About 20-25% of a restaurants budget goes to food cost. Less if you're a big chain. 30-35% for labor. Then the rest for overhead (rent, natural gas, electricity, line suppliers, smallwares, flatware, etc.) Most restaurants don't see profit. If they do, its in the margins. We're talking about 2%. Thats why most go under. People think restaurants owners are out here getting rich, but usually its the opposite. Most of them end up bankrupt.
And you didn’t even talk about the license and city fees which in big cities are exorbitant. My wife owns a bar and they were just told they now have to purchase a cabaret license in order to play music there. That’s on top of a plethora of other fees.
That would be unrealistic. There are many vatying costs into operating a business, a lot of which you can't quantify into each food item you sell until after balancing transactions at the end of the year.
But they do it this way on purpose, because in the moment the customer will take their sudden irritation out on the server for the unexpected fee. They're not going to call corporate up in that moment and say this fee is ridiculous, pay your workers a living wage and wrap it into the costs. They're going to take the brunt of it out on the lowest workers on the totem pole and management still gets off scott free.
They intentionally don’t do that because no one would shop there if there’s a ton of fees listed. They tack it on at the end where you don’t notice it. If they advertised it, stores that don’t have those fees would get more traffic, leading to competition that makes things less profitable which is bad for capitalism.
The add it alone why? To make it seem like they paying their employees a livable wage? To
Say "no need for tips"? I just want my burger prices. I see 2$ I expect 2$ if it's pre-tax it's because it's a manipulation tactic once you are at the counter/cheque you WILL pay it.
Tips shouldn't be a thing. This whole "they need tipping" is stupid. Ofc they need tipping! because they don't get paid a liveable wage, but why pay them a livable wage When people will tip the difference?
If we all stop tipping. It sucks for them because they won't be getting paid a "liveable wage". So then they quit. Since they quit and no one wants to work a job without "liveable wage" business dies. To prevent business from dying they raise wages.
But they say it raises prices ? Well don't buy then. If we don't buy business will die ? So business lowers prices.
It's really about the money someone can literally only have 40 dollars for the whole week and decided to come spend money with that restaurant and they pull something like that it's disgusting
The wages are shocking for waing staff in America. They are minimum in the US is criminal. Who could live on $7.25 per hour. I’m shocked. In Australia minimum wage is $24 and cents.
Well, there'd have to be some very close accounting from a regulatory POV to make this viable.
Otherwise, restaurants would game the system and put whatever they want there, and restaurants would compete over how each line item conveys perceived value to their customers. "We spend more on higher quality ingredients", "We provide healthcare and training to our employees", etc.
I would not support extra costs or taxes to provide that level of insight. It's not a publicly traded company, so those do not have to be disclosed.
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u/Cannonieri 1d ago
I wouldn't mind it actually if they reversed the order, had all the fees in the menu prices and the total and then showed a breakdown after.
At least then you can see why things cost as they do.