How to Avoid Accidental Overtipping

Are you overtipping when you go out to eat? When the bill comes, you'll get an itemized list of everything you ordered, the subtotal, tax, and grand total. When you hand over your credit card to pay, however, that itemized bill disappears and you're returned a signature slip with only the grand total. Most people then end up basing their tip on this amount.

But wait! You're supposed to base your tip on the subtotal! While I can't prove it, my guess is that while restaurants know this, it isn't in their best interest to keep that subtotal in front of your eyes when you're figuring out the tip--so they deliberately don't. There's no other good reason (that I know of) to not return the itemized bill to you along with the credit card slip.

In order to avoid accidental overtipping, you have a couple of options:
1. Pay in cash, so that you don't lose sight of the subtotal when figuring your tip.
2. Figure out the tip before you hand over your credit card (what I plan to start doing).
3. Become a math whiz, so that you can compute and subtract the tax from your grand total when you are presented with the signature slip.

I'm not saying that you shouldn't tip extra well for good service if you so desire. I just want you to know that you may be getting suckered into tipping more than you need to or want to by this common restaurant practice. Just the other night I ended up overtipping $3 (and the service was mediocre at best).

If you eat out once a week, overtipping by even $1 per meal will add up significantly over the course of a year. $52 can buy me enough groceries to last a week and a half!

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5 comments:

RectilinearPropagation said...

Apparently, I've been overtipping every time I tip. :(

In addition to the subtotal problem, some places add the gratuity to your bill. I went to a restaurant once and it was on the reciept after I paid. Unfortunately, I didn't notice this until after I'd given the waitress a tip in cash.

Hossofcourse said...

You might want to separate out the wine/drinks too. It's customary to tip 10-15% on wine/drinks -- while 15-20% is appropriate on food. I mark this on the receipt so the waiter knows what I did -- if I use a sommelier, I indicate the amount he/she should receive

Tactical said...

While you are both technically correct, I would not worry abotu this until the total cost of the meal starts gtting above $70 or so. If the whole thing only cost $20 then maybe you should just give the waiter that extra little bit by tipping on the tax. As others hav noted, if you are concerned about spending $1 too much on a restaurant meal, then maybe you should not be eating out at all.

Two Pennies Earned said...

Tactical, you may have misunderstood me. I'm not advocating stiffing hardworking restaurant staff--I've had my share of low wage jobs, and I know that tips can make a huge difference in take-home pay. I'm simply advocating making an informed decision about tipping and pointing out that a common restaurant practice is somewhat deceptive to diners.

Anonymous said...

Aw, I am not going to begrudge the waiter a little extra money that comes from computing the tip with the tax included.

What I am more concerned about is not me being overly generous, but waiters and waitresses coming to expect, even demand it. Just a few years ago, everyone recognized that 15% was the standard tip for someone who did their job adequately, with upwards to 20% for better than average service. Now there are many waiters insisting that 20% is the MINIMUM you should ever tip a waiter. Here is one waitress who says this in her blog:

http://aserversthoughts.wordpress.com/2008/09/23/15-is-archaic-i-have-bills-too-20-is-the-minimum/

She partly bases her claim on the ludicrous argument that due to inflation the percentage should go up: “Seriously, times change, inflation rises and people need to keep up to date.”

Of course, using inflation to justify increasing the percentage waiters are tipped is fatally flawed; inflation increases the price of most common commodities, including foodstuffs, which requires restaurants to increase their prices. Even if people continue tipping at 15%, since this 15% is a percentage of the menu prices, which keep up with inflation, a waiter’s income will automatically keep up with inflation.

What's funny is after she demands a minimum of 20%, in her very next blog entry she mocks people who ask her opinion on menu items:

http://aserversthoughts.wordpress.com/2008/09/24/seriouslymake-up-your-mind/

You think she'd welcome the opportunity to recommend something good so they'd want to give her a good tip. I think her frustration with getting less tips than she wants comes not from cheapskate diners but because her customers aren't tipping her well because she is surly and lazy.

I think a lot of waiters have developed a sense of entitlement to 20% as the new 15%.