Tip already included but bad service - what to do?
 

I looked through the tipping thread but could no find anything regarding this situation, so please forgive me if it was somewhere else and I did not find it.

So, recently I went to a restaurant with a few friends and had a unpleasant experience. The restaurant, of course, included a tip of 18% in the bill automatically as were a party of 6. But the service was rude and not very attentive, ergo absolutely not worth the 18% - we chose to give less and it got very unfriendly.

Here's my question: What would you do? In general, I find it too proactive to include the tip rightaway, but as long as the service is fine thats OK for me. But what if the service is not worth the amount the restaurant puts on the bill?

In another matter, I am never sure in the US (I moved here recently) if I am supposed to tip based on the pre-tax or post-tax amount. Also, at one restaurant, they added the tip automatically and then put tax on it - is that legal?

They can not force the tip on you. Tell them that you want it removed. If need be, speak to a manager, and let them know about the quality of service you received.

Tradition says that the percentage tip should be based on the pre-tax amount. People are free to base on the post-tax amount, of course.

Here is an example of a tipping card published by tipping.org - note the words at the bottom of the second side of the card:

http://www.tipping.org/tipcardslarge.html

Yes, it's true that wait staff in U.S. restaurants are paid less than minimum wage.

And yes, it's true that tipping is generally voluntary in most U.S. restaurants and that the standard tends to be 15%.

On the other hand, if a restaurant indicates in its menu that the check for parties of more than x will be increased by a tip or "service charge" of x%, it could certainly be argued that the prior disclosure of the tip or service charge obligates the customers to pay the additional charge.

IMHO if the service sucks, have them remove the tip. They don't usually call it a service charge, which I think might get sticky. They almost always call it a 'gratuity'. Whatever they wish to call it, however, I would put up a fuss if the service was bad enough.

On the second part of your question, you are right in that it is not correct to calculate tax on the tip.

I hate the mandatory tip for large groups, but I see the reason for it. Years ago, when I was a waiter, I remember how things went. Large groups almost always 'forgot' to tip, or left something like $5.00. And imagine trying to serve many people all at the same time! It basically takes the whole staff to coordinate it. Six isn't such a problem, but what if there's 15 diners?

How about talking to the manager in a non-confrontational way? Tell him/her how badly things went. The damage is already done, so why not negotiate for a round of desserts? Or a round of drinks?

Depending on the tax rate where you live, it can be really easy to calculate the tip. Here in NYC, the tax is more or less 8.5%. Leaving double the tax as a tip becomes 17% on the before tax total.

An interesting development is San Francisco restaurants adding $1.00/check toward health insurance for their employees. How do you feel about that?

What next? Holiday pay? That is ridiculous.

Stupid. To me, it's the same as fuel surcharges from years past - absolutely no reason an basic operating expense of the company cannot be factored into what they charge for their product.

Also, where's the fairness if I pay a dollar because I'm eating alone, yet come in as a group, and each of those people is paying pennies.

Jeff

In many cases it is common for thge menu to clearly state something like "18% service charge for parties of 6 or more".

In that case, they may well be able to force you to pay the service charge.

As others have said, best approach in this kind of situation is to discuss with the manager in a non-confrontational way.

In the case of San Francisco, this is comparable with adding on tax, or a rental car company adding on a facility cahrge imposed on them by the airport, and not equivalent to energy surcharges.

Reagrdless of whether or not you agree with the San Francisco ordinance, it is quite proper for businesses to show customers the costs that they (consumers) are paying for unfunded government mandates; voters should have visibility of the costs of what their lawmakers do - whether they agree with them or oppose them. It's called transparency.

We have spoken with the manager on several occasions and told them the service was unacceptable and didn't see why we should be required to pay 18% extra, and in every case they have adjusted it once we explained the problems to them.

They want to know, they want to provide good service. I think many times with large parties the waitstaff doesn't feel they need to work for their tip, as most people just pay whatever they put on the bill.

I calculate the tip pretax. Indeed many of the double or triple the tax to estimate the tip in this area (triple the tax in Connecticut for example would be 18%, based on pretax amount, double in Manhattan would be 16.75%) and that is based pretax.

In most states, pay less than the minimum wage is allowed for those receiving tips, although in many states the employer is require to make up the difference between base pay and minimum wage if the employee's tips aren't enough to do so.

However, this isn't true across the entire US. In Minnesota, for instance, there is no 'tip exception' to the minimum wage. I think I have seen that one or two other states also don't allow less than the minimum wage to be paid to tipped employees.

Wirelessly posted (Palm TX: Mozilla/4.0 (compatible; MSIE 6.0; Windows 98; PalmSource/Palm-D050; Blazer/4.3) 16;320x448)

Huh...? No way I buy that wait staff are paid less than the min wage. Laws in the US are taken seriously.... wouldnt an establishment lose their license if busted.,?

The minimum wage that wait staff are paid is, IIRC, $2.89/hr. Tips are expected to bring their average hourly to the Federal/State regular minimum wage.

...and in the great majority of cases to well above it. Indeed, it would be perverse to require the full minimum base pay for those who had substantial tip income - as it would in effect be defining a much higher minimum wage for some workers than for others.

Gaucho

Actually some states allow payment of less than minimum wage as the tips are imputed income to bring the overall wage over the minimum.

Favorite audit victims on federal tax audits are waitpersons (we must be PC) who do not declare enough tip income.

Our laws are as screwy as yours and they are different in all 50 states.

As mentioned in my post, some states in the USA don't allow payment of less than the minimum wage, but most do.

Here's an example from the state of Maine (link):

What is the minimum wage?
Beginning October 1, 2008 the minimum wage in Maine is $7.25 per hour. Maine does not have a training wage or subminimum wage for students. Tipped service employees can be paid one-half the minimum hourly wage. However, if this rate plus tips does not average at least the minimum wage, the employer must pay the difference.

Another example (link):
What is the minimum wage in Massachusetts?

The minimum wage in Massachusetts is currently $8.00 an hour for most employees. For service employees, like waitstaff, who receive tips of more than $20.00 per month as part of their compensation, the minimum wage is $2.63 an hour.

So what's the difference between requiring health care payment for workers, or social security tax? Should there now be a visible 6.25% (?) SS tax added to all checks because employers need to pay that for all employees? Every bill I've every seen lists city & state (were applicable) sales tax, but I've never seen a listing for business tax, real estate tax, insurance (also required by law, but still the business's obligation). There are also probably annual licenses that need to be renewed, 'mandated' by a gov't agency (local, state, federal) but almost certainly unfunded by the gov't.

It's an actual ordinance that diners have to pay $1 toward the waiter's health care? Since when is promoting tip inflation any government's business?

If this is true, I'd simply calculate the tip on the bill and take a credit for the health care charge.

Just to clarify, there is a federal minimum wage, with a reduced level of $2.13 an hour for tipped employees, with the previously mentioned caveat that with tips, the income has to be at least the standard min wage. Although in theory, employers could pay the reduced wage to other tipped employees, it is mainly restaurant wait staff who get paid at that level.

In addition, many, but not all, states have additional minimum wage laws. See here for more details.

It's usually written into the applicable tax code whether the tax must be listed separately. For example, the state rental car tax as well as the $4.81-per-day Consolidated Facility Charge are actually codified in Alaska state statutes that they must be itemized separately on customer's bills (the state put the money up for the new rental car facility in ANC). On the other hand, the 11.11% concession recovery fee that covers the 10% airport concession fee the airport imposes on its concessionaires (including rental car companies) is not required to be itemized separately, though it is universally imposed by all airport rental agencies in ANC (whoever didn't list it would be at a disadvantage when customers check rates, because they'd have to charge a higher daily rate to get the same income and customers would be turned off by such). But be careful when arguing that fees shouldn't be listed separately, as in many cases, laws, statutes, codes, and even lease agreements can stipulate they must be.

To the OP: I'd definitely complain and be surprised if that didn't result at least in a round of drinks on the house.

I also hate subsidizing the salary and supporting the slave industry. I much prefer an approach where waitstaff has an ordinary contract with a regular salary (at or above minimum wage), good benefits (most of all health insurance as accidents are frequent in that industry) and generally fair conditions. This cost must be factored into the cost of the actual product. An extra service charge is not permissible in my eyes.

I think tax should be figured into the final price, too. It makes calculation much easier. It is also fairer to the customer because he/she will see what is to pay, instead of being duped into a scheme where a meal looks like it costs $30 but in reality will cost $38 when all is figured in.

Based on that, I will gladly give a tip or at least round up the bill, if I found the service satisfactory or even excellent.

Till

wouldn't it just be easier if employers actually paid their staff a decent salary, then this ridiculous tips farce could stop. We should tip if we want, not because we have to.

Not an easy lot...
 

Interestingly, most people in the back have no benefits, either. And they get scant attention from the OSHA-types for the hazards they are always (...standing up) near. A friend's son is a sous chef, wrists perpetually burned and scarred. He's been doing it for about five years. $40,000, and no bennies. In one of the big-name Boston restos, the second that he's worked in where it's the same. Because they can. Because - even good - restaurant talent in all positions is easy to come by.

Back to regular programming, I usually tip 15% and round up to the next dollar. Or 20% and rounded if the service has been stellar, including wrapping doggie bags for several people. Actually, it's win-win. I don't begrudge the extra few cents, and later I can quickly scan my cc statement and know if there's been any funny business.

Those accidents would already be covered by state-mandated workers' comp insurance.

A while ago, a friend hosted a business dinner at a restaurant that included an automatic tip/service charge, since the group was more than 6 people. My friend said the service was terrible, and rude.

Not wanting to cause a scene, he paid the bill as presented, and later on simply disputed the charge with his credit card company. Amazingly, the tip/service charge was removed, based on his account of bad service.

Whenever I don't think the service deserves the auto.tip amount I let know the manager before paying. Sometimes they remove it from the bill and sometimes they argue that it's mandatory.

When the tip can "not" be removed, I simply pay it and mark the place with an X.

No, it isn't $1/check, it's a percentage of the total most places. We paid a mandatory 3.5% surcharge at one upper end place recently. Personally, I find tacking it on separately both deceitful and annoying; it is a part of the cost of doing business for a restaurant in SF under the new law, and should be included in the price listed on the menu.

Why should it be included in the price? Taxes aren't. Either way, you're going to get a higher bill than simply the menu item prices. I suppose you could try and estimate it into menu prices, but you're gonna have to guess and it might make the prices look funny. Why do all that when listing it out separately makes it so much simpler?

It's an extra, San Francisco specific expense. While many businesses were for it, many more were not. Even if it's not required by law to be listed out separately, I have no problems with restaurants who do. Like a PP said, it's transparency.

Customers are gonna pay it anyways. What difference does it make to you whether it's built into menu prices or listed separately? It's basic economics that as you raise prices, demand goes down. Why make it any harder on the restaurants than it is? Let's not ignore the common knowledge that most people are affected by price and react when prices get raised. Higher prices don't hurt as bad when it comes out as fees/taxes out the back end. As consumers, it is annoying, but this isn't nearly to the degree that hotels/car rental agencies do it.

By listing it separately, the restaurant puts it out there. If you're all for it, you'll gladly pay it. If you're against it, it's a reminder that it's there and maybe you'll help small businesses try and get it repealed.

And for the person who asked about social security, it's totally different. SS is a federal thing. Every employer/employee pays it. This is a special SF thing. Like hotel are car rental fees, it's specific to this particular locale.

Can you name another type of business that bills customers directly for employee benefits? Is it on the itemized sticker on your car window? Maybe on the invoice for your new computer?

Taxes are also predictable within a civic entity, this health benefits charge is not. Apparently how much the customer directly pays is set by the individual restaurants and can range from $0 up to 4% of the bill.

Americans are getting hit with deceptive pricing in many ways these days, be it airline ads, rental car rates or SF menus. I think the price we are shown should be as close to the total as possible, with the exception of fees or taxes mandated by law to be shown separately.

That's cuz it's not mandated anywhere but San Francisco. It's a pretty hot button topic.

If we all get universal health care, I'm pretty sure they'll stop line iteming it. As it is, I see it as a their way of protesting/highlighting the issue.

It goes back to the transparency thing. This is a pretty unique issue IMO. It's similar to various fees and stuff, but not exactly. I'm sure everyone's premiums are different, unlike some hotel tax.

No. This gets me fired up. It's a brutal way of bashing waitstaff, who are hapless.

The tipping custom exists because it's a custom (inertia - in the U.S.) and is based in the philosophy that if it's separate, better service results. Win for the customer, win for the restaurant, supposedly a win for the waitstaff.

Putting the waitstaff's benefits out on the cuff is just cruel. It's in the vein of The Powers That Be in the auto industry floating the idea in the media - talk radio etc. - that $1,500 ($3,500?) of every car sold goes to employee health care. There the game and dynamics might be different -- e.g., it's part of negotiation leverage between management and the union. But college student restaurant servers?

Give.Me.A.Break.

They get health care benefits now. This is a major victory for them versus in any other city.

You have to look at the REALLY big picture. There's a reason I kept mentioning only small businesses and not specifically restaurants in general. Large corp restaurants likely already offer benefits or could absorb the cost of providing it. It's the small mom and pops that can't. Also, there's rent control in this City. This means newer businesses are at a severe disadvantage compared to older ones. It's not so simple as seeing all the cheap/bad ones go out of business and having good ones who incorporate higher prices and benefits moving in. The new ones still have to compete with the prices of the older stores, yet have dramatically higher costs. I know a few families who started businesses in SF and what the owners ended up taking home was scarily small in many cases. The risks and hurdles of running a restaurant in SF are much higher than in many other cities. When they fail, sorry, but ALL the employees lose their jobs too. They can't all be fancy places with high prices providing larger profit margins.

I'm not sure how many members on this board can see that. Majority seem to be frequent flyers which I'm gonna assume means they're not running small mom & pop retail establishments.

No, I don't have to look at the big picture when I'm dining out. There is a time and place for everything, and having someone else's political strategy [Gavin for Governor] shoved in my face when I dine out is the wrong time and wrong place for it. Universal health care, which I favor, is an important topic that should not be trivialized by making it a restaurant line item charge and doing so only offends the middle-of-road'ers who might otherwise favor it.

Just because people don't agree with you doesn't mean they are incapable of understanding the issue. (bolding mine)

And now off to OMNI...

I don't have a dog in that fight, but, if anything, it would seem that every check showing the charge is a dig against the mayor if he instituted the health benefits for employees (as well as against the health benefits).

Adding tip to bill
 

I was add a hotel restaurant on Miami Beach and they added automatically added a 18 per cent tip to the bill. How common is this, I have not seen this in some time.

I see it for groups of six or eight but it is posted on the menu.

You often see it for large groups.

I find it offensive.

Was it a large group? Many restaurants do this for parties of, for example, six or more. It should be stated on the menu if this is the practice. Otherwise, you can insist that it be taken off the bill and tip as you consider appropriate.

There are a very few places in the U.S. where it's not uncommon for restaurants to automatically add the tip to the bill, independently of the number of diners. I've had this happen in Miami Beach, too, so it's possible that this is one of those places.

1. Most restaurants which cater to groups add a gratuity at a specific size such as 6 or 8 people. It's generally made clear at the time the reservation is made and is noted on the menu. This leaves people who don't like it, free to dine elsewhere. Same sort of things with split checks (one check per party, up to the host to pay or collect).

2. Rarely and typically only in locations which cater largely to people from countries where it's the custom to include "service" in the final bill, have I seen restaurants do it to all checks. Miami is one of those areas. It's not that the visitors are cheap, it's just that they are used to service being included, so they leave a very small tip for great service and that leaves the staff screw*d.