Screw That: Automatic Gratuity in Restaurants

Posted in Screw This

Welcome to a new column on Fly&Dine called Screw That, in which I identify something terrible in the world of food and/or travel and tell you why it’s so terrible. Think of it like therapy for all of us. First up: the awful trend of tacking on automatic gratuity in restaurants.

American tipping culture is out of control.” I wrote that sentence back in July in response to a hotly anticipated restaurant that opened in LA over the summer which decided to charge an automatic 18% gratuity on every check, whether you liked your service or not. I was outraged then and I’m even more outraged now because what seemed like an uncomfortable anomaly appears to be on its way to the mainstream.

Yesterday, I ate at two different restaurants and both forced me to tip my server. It’s not that I wouldn’t have tipped them on my own. I absolutely would have and probably for more than the 18% I was charged. The biggest issue I have is that the choice was taken out of my hands.

Tipping at restaurants in the US is unlike anywhere else in the world. We tip for everything just because we see a tip jar or a tip line on a credit card slip. Buy a coffee, tip. Get a shuttle ride, tip. Pay someone to clean your house, tip. How did this happen? I’ve written about tipping quite a bit and it’s become so ingrained in our culture that we barely even question it anymore. Our meals end up costing 120% of what they should and we blindly add the money in and go about our business. I used to be one of those servers that benefited from the generosity of my tipping customers, but now I have to say that we’ve reached a new boundary line on the tipping frontier and I’m worried that there’s no going back.

Automatic gratuity is not only insulting to me as a diner. It’s insulting as a contributing member of the American economy. Why do restaurants and other service industries feel that the customer is responsible for paying the employees? Why are restaurant owners exempt from paying their employees a living wage? Why do we, as paying customers, let it happen?

There’s another issue at play here and it’s about transparency. When we were handed the check, our server didn’t mention anything about the service charge included. There wasn’t anything on the check that mentioned it either (some restaurants choose to stamp the check or circle the gratuity line if they’ve automatically included a charge). In fact, the only warning was a small line on the menu written in a fairly tiny font. At least an hour went by in between the last time I saw my menu and the time the check came. I didn’t remember the miniscule auto gratuity clause at all and, in fact, the check was split three ways so all I saw was my credit card receipt with an empty tip line waiting to be filled in. Had my girlfriend not asked how much I was going to tip, I highly doubt I would have even questioned why each of our bills was so high but her question made me look at the original itemized bill. There I found the culprit: an 18% surcharge already added in.

Without checking, our server would have made roughly 38% of our bill as a tip and I don’t think his neglecting to mention the included gratuity was an oversight. This is the same dude who tried to foist an $8 bottle of water on me by asking “Would you like sparkling water or still? Or a bottle of each?” Anyone that phrases things so as to leave out the option of free tap water most likely has no qualms about collecting a double tip, too.

When I saw the included gratuity, I felt bamboozled. Luckily, I caught it before paying for my lack of close reading. Other people haven’t been so lucky. From a recent Yelp review:

About that check – I only noticed after I had tipped and signed (and I tipped 20% because even if the service is so-so, in the US this is how servers make money – I’m not heartless) that the check already included an 18% service charge. There was no mention of this on the menu that I saw, and I guess I just didn’t take note on the check until after I left.

While there actually is mention on the menu, it’s very small. I think it’s the restaurant’s responsibility to inform its customers about the charge when the bill is delivered. Either that or remove the tip line from credit card receipts. Without doing one or the other, the whole thing comes off as shady and profiteering.

I’d like to imagine a future where American restaurant workers are paid an ample wage like their European counterparts. I’d like to imagine a future where my tipping is appreciated and respected instead of forced upon me. I’d like to imagine a future where I don’t have to read my final bill as closely as I do my business contracts. Until then, I say this:

Automatic gratuity? Screw that.

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  1. There is virtually no American style tipping in Europe but it is most assuredly “included’/”forced upon you” in the cost f the food. So that makes it pretty automatic in my book.
    At least in the States you have the option of not tipping if the service/food is bad enough.

    • Agreed that the European style includes costs like tip in your food price, but that’s really how most of the rest of the American economy works, too. At a store, you’re not just paying a price for the product. You’re also paying for the rent/utilities/labor cost/marketing/etc. but it’s included in the cost of the product because the owner is recouping their costs. Deviating from that system when it comes to restaurants creates this whole other system that puts the onus on the customer instead of the owner and I’m against it.

  2. I always include a tip, with a minimum of 10%. Even if the service was truly horrible, I might talk to the manager, but still leave a tip

    If service was good but not spectacular, then 15%. If truly great service 20-25%. If a place is charging 18% automatic gratuity, the service should be pretty good!

    Was charged automatic 18% tip at a Chinese restaurant in Honolulu a few years back. Service at most Chinese restaurants are minimal, and this one was no exception. No mention of this on the windows/menu etc. Only when check was dropped off did the waiter said. “Tip included.”

    Did some research and there something about tax laws being different for tipped employees in Hawaii. Don’t recall details but something to do with either a tax credit for employer or employee…but the basic story is that tipped employees has to make at least 10% tip to “break even.” And because many Asian tourists in Hawaii are from countries that do not have a tipping custom, restaurants will selectively add this mandatory tip to bills of Asian customers (I am Chinese but grew up in the states).

  3. @SP
    At least they are honest enough to tell you that the tip is included. I’ve been to a couple of places where they not only silently included a service charge on the check, but there is also a separate line for gratuity. You would easily miss the service charge and unintentionally double tip them. I’ve also had a foreign friend who did not realize that the service charge is the actual tip.

  4. This is why I generally avoid restaurants that either aren’t quick food truck, or upscale tasting menu style restaurants where the food is an experience. All that mid-range crap that’s neither cheap nor good can be better cooked at home.

  5. My recent tipping dilemma was with room service at DoubleTree in Key west, They added a 20% “surcharge”, of which they said “part” went to the server. If you don’t know how much of the server gets how do you know how ,much, if any, that you want to tip?

    • I hear that, Carl. Delivery is tough because so many places (hotels/pizzerias/etc.) charge delivery fees that may or may not go to the driver. It’s a tough call.

  6. I hate hate hate the american tipping culture. I much rather have the restauranteur pay fair wages to waitstaff, as is done in many countries. The idea that waitstaff need to be subservient to me and I give them a tip is abominable. A tip should be a little change, as in Europe but not at the preposterous 20 and even 30% levels that are creeping up in places.

    Why can’t waitstaff be paid fair wages and, if that means higher prices on the menu, so be it. I rather take that than have to factor in inviting the waiter to dinner when placing the order.

    I think the argument about rewarding good/bad service is bunk. Waitstaff can get easily screwed that way if there was a mistake in the kitchen that is out of their control. I’ve gotten lousy and good service in all kinds of tipping restaurants and service charge establishments in Europe. Lashing it out on the waitstaff when something goes wrong by not leaving a tip is passive aggressive and instead, if you got something to complain about, get the manager.

    Just my $0.02. I sure hope we don’t start seeing tip jars in blogs.

    • If restaurants start paying the service wages they will raise the price of their food to cover the wages. By the way all restaurants pay more than minimum wage for the bussers and bar tenders. It’s only the waiters that get $2.15 a hour. Restaurants in Europe build the cost of the labor into the price of food you pay. At least in the United States you can have control over paying for bad service.

  7. Report the restaurant to the IRS. The IRS will then consider the “tip” as income for the restaurant regardless of it being passed on the the wait staff or not.

  8. Read up on Jay Porter’s blog if you’ve got the time:

    It’s a fascinating read about how and why moving his restaurant to fixed (mandatory) service charge allowed him to improve service. Also he posits that our assumption that we have control over a waiter’s service via our tips is by and large nothing more than an illusion. Granted it’s only ONE restaurateur’s experience so take it for what it’s worth.

  9. I worked as a waitress for a few years so unless anything really annoying takes place I am a good tipper. I HATE places that include the tip, I would leave more but if you include 18% automatically that is all you are going to get from me.
    And this tipping everywhere is out of control! I bought a small cup of fro-yo from a local shop, I filled my cup and I put on toppings. Then the kid who I paid asked me to put in a tip amount with my payment amount on the ipad. That would be $0 kid. Guess where I have not been back to….

  10. We just returned from three weeks in Japan where there is absolutely no tipping (it is considered insulting) and rarely a service charge (which is then minimal). The service was uniformly excellent from luxe restaurants to inexpensive “meat on a stick” joints. Presumably the servers are paid a fair wage and expected to do a good job,

  11. As a server when they took away auto grat i lost about 6k in 1 year. I have people on $100 checks think that tipping $10 is a good tip and also large parties like 10 18 or 19 year olds that come in and split the check and maybe 1 person tip $5 if I’m lucky. I wish we had auto grat for situations like these….

    When we did have auto grat I would not say anything when I dropped the check but if there was a tip added when I picked up the check I would let the customer know that Gratuity was already included, most of the time they would let me keep it for being honest but the company I worked for had us ask the customer to initial next to the tip to make sure they understood that the tip was on top of the Auto Grat.

  12. So out of hand. Ten percent back in the day turned into fifteen. Now these crybabies want twenty and twenty five. I leave fifteen if service is acceptable. Less if not. Nothing at bars. Too much markup to claim they can’t pay a fair wage to a bartender whose job is way easier than a waitress.

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