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!
Tags:Tipping Money Restaurants Personal Finance
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