pinniped

Agreed...that's incredibly insulting, and I very rarely go back to restaurants that slide the tip onto the bill instead of letting me set the amount. Granted, when they do it once I usually just pay it, but I make note and do not return.

I've never heard this before, not even in all of the threads here about tipping in cash potentially facilitates criminal tax evasion. Are waiters automatically withheld 15% of their total "handle" for the evening? If that happens, I can see cases where you work a shift and then owe the restaurant money, since your base pay is nominal and most of your take-home is in tips. (Say, you had a night where a huge table tipped you in cash.)

In short, I *don't* think this is how it really works, but I've never worked as a waiter so I don't really know.

CJKatl

Let's say a waiter sells $1k of food/drink during the shift. At the end of the night, the waiter will claim his tips. If at the end of the year, less than (depending on some factors) 13-15% is declared, there will be problems.

I posted this recently... when I was in college I worked at the American Cafe in Georgetown, DC. For a period prior to my being there the IRS determined not enough was withheld. They came in and met with staff telling them how much each owed. One waitress, Dorinda, had end of night receipts from every shift showing she had declared everything. Nobody else did, so they owed. After that, I always kept my receipt at the end of the night. Now there is computerized ordering that tracks this so there isn't even an opportunity to fudge.

Bottom line: your expensive wine is being included in the waiter's taxable amount, as is anything your order. Not leaving a tip costs a server because the server is still paying tax. That is how it works.

clarkef

Wouldn't the computerized tracking of orders resolve this problem? I assume that most people who make large purchases use credit cards. Besides, legally speaking, the IRS applies a rebuttable presumption that a server makes X% in tips. However, your colleague Dorinda successfully rebutted the presumption with her receipts.

Bottom line, be like Dorinda.

CJKatl

Yes, computerized systems have made reporting more accurate, but it's still based on sales. In other words, the server is now certainly paying the tax on the wine sale even if there is no tip left on a credit card charge. The assumption would be the tip was made in cash. The rebuttal is based on the sales, not on saying you didn't get a tip. That would be impossible to prove. BTW, the wiggle room is if the server gets 20% on a cc he might get a little tax free income on a cash tip later because his reported tips are a little over.

BTW, I always followed Dorinda's lead. Of course she was a minor character in my life who would likely be surprised to find out she had this influence I still remember 30+ years later. A movie filmed near the restaurant. The person who was supposed to handle a task for the move didn't show up. It is what she did professionally, had the right certifications and was hired at the last minute. Every so often, I will see her name on movie credits or look her up in IMDB. She is alive, well and still working in the film industry.

JackE

If a server is being charged tax on income that wasn't received, then the wrongdoer is not the customer who undertips, it's the tax code that overcharges.

I will also point out that if a server does his or her job so badly that wages and tips don't even cover the tax, then losing money on a shift is the best thing that can happen for all concerned. Thankfully, I'm sure that's very rare.

CJKatl

If you don't think the service is worth a tip, that is your prerogative, of course. That is a far cry from ordering an $80 bottle of wine knowing you aren't going to tip therefore making the waiter have to cover the cost of not being tipped. The latter is not the waiter's doing. Choosing to make a working person pay for your having an expensive bottle of wine is wrong. You can blame the IRS system, but that won't change the waiter having to pay tax on the sale.

And yes, I've done the non-tip before when the waitress was bad at every turn. For those in ATL, it was Taco Mac in Decatur. Disaster after disaster, several of which were the waitress' fault. (Waiting ten minutes after the apps were dropped for utensils, asking for mayo four times and it never came, never getting drink/water refills, waiting thirty minutes for apps when we told her we were in a rush and having entrees show up a minute later, getting an order wrong, there was a label on the inside bottom of the nachos dish which someone ate before realizing, etc.) What got her a zero tip was when we complained to the manager she came over to the table and said, "But at least the service was good, right?" The response was honest, if a little pointed, ending with, "This is not the right job for you." We got some things taken off the bill and a gift certificate. When the regional manager called, I told him the restaurant used to be great for what it was, about ten years earlier, but it was horrible now. Turns out he had been the manager back then and already knew and had plans to fix things.

ohmark

OT: Just out of curiosity, checked the Yelp page for that location. 12 of 23 reviews on the first page were 1 or 2 stars. Will stick with Pittypat's Porch. Or maybe even the Varsity, not.

1973 Ford Pinto

That's ... what they're doing, isn't it? You just got through saying that the approach of rolling this cost into the menu price failed. So they're doing it a different way. And you're... insulted?

s0ssos

So that reiterates be like Dorinda. Conscientiousness pays off

sethb

Doesn't the IRS actually look at the amount of tips on receipts, rather than apply a percentage to the sales? I thought the standard was to calculate the average tip percentage on credit-card slips, and apply that to cash sales (possibly with some adjustment for $0 tips).

So tipping $5 on a $80 bottle of wine gets the waiter known income of that $5, and it lowers his overall percentage for cash tips.

sdsearch

Well, I did say "I was over-billed by hundreds of dollars" for clarification, didn't I?

There are different conventions in different circles. X is super-unspecific. N is often used when you need more than one unspecific digit, but you need to distinguish between different unspecific digits, as in "I should have been charged $N,000, but I was charged $M,000,000 instead." I'm more used to the latter situation, which is why I used N out of habit. If you instead say "I should been charged $X,000, but I was charged $X,000,000 instead", it implies to some people that X is the same both cases, but to other people it doesn't.

Points Scrounger

I understand about the conventions now that it has been explained.

CJKatl

Two different things: All tips on credit cards are reported, but if the restaurant does not report 13-15% of sales in tips the restaurant will be red flagged and it will be assumed the restaurant is underreporting. Sales is used to calculate the threshold for reporting, not tips on receipts. The assumption is cash was received if the cc receipt shows no tip

Nowadays tips on receipts often exceed 15% of restaurant sales, so many restaurants meet the threshold on cc tips alone, although even in that case if there are no additional tips reported on cash sales the restaurant might be red flagged by the IRS.

Restaurant managers are usually diligent in making sure the restaurant is meeting reporting requirements. It's a big deal in that industry because the restaurant can wind up having to cover a shortfall.

JackE

What got rolled into the menu price, and failed, was not back of the house services, but the servers. People prefer to make their own decisions about how much to tip. Who would have ever thought successful people like to think for themselves??!! Apparently they do.

As to back-of-the-house, what makes a chef different from the person who dry cleans clothes, or stocks grocery shelves or types a deposition? Do you really want to see every single transaction come with a special service charge? That should be about as popular as Vegas resort fees and electricity surcharges.

And note that I took special insult at the part where the high-end restaurant helpfully informed it's [soon-to-be-ex-] customers that they could speak up and decline the surcharge. It's so much fun to do that, especially when you're part of a large group of people!

1973 Ford Pinto

lol

like they were physically preventing you from tipping more?