UnderCover Waitress: Tip on Discounted Meal

Tuesday, December 13, 2011

Tip on Discounted Meal

Question and Answer:


What is an appropriate tip on a discounted meal?


There is understandable confusion regarding what to tip on a discounted meal. Industry standard is that diners tip based on the pre-discount amount.

For example, let's say you go out to dinner with a friend. You order two salads, $5 each. Two entrees are $15 each, and you order a bottle of wine for $10. Your bill is $50 and the service was great so you tip $10 (which is 20%.)

But wait! When you were sat, you showed the hostess your 2-for-1 entree coupon. So, one $15 entree is taken off your bill. Your bill is $35. 20% of $35 is only $6.50.

Why tip $10 if the bill was only $35?

* The waitress still did the work that would normally earn her $10.

* The waitress did not offer a discount for the service; the restaurant offered a discount on food.

* The customer still saved money with the coupon. The total, including tip, was $45 with coupon or $60 without.

* If waitresses had to take a hit every time the owner offered a coupon, nobody would want to work shifts during the time coupons were valid.

Some restaurant owners protect the servers by adding an automatic gratuity to the bill when a coupon is used. An "auto-grat," as it is called, is often 18% or 15% of the pre-discount meal. Customers may provide additional tip for the server if they so choose.

The auto-grat is added to coupon bills to protect the server's income. Auto-grats should not be confused with service charges. Service charges go to the restaurant owner; auto-grats are paid to the waitress.

Hope my explanation clarifies the situation. Happy dining!

And remember: Don't forget to Ask the Waitress! :-)

14 comments :

  1. We recently ate at a restaurant where the manager comped an entree and dessert for something that was not the server's fault. I added in the price of both and tipped on that basis. Personally, I think he was too quick to comp, but he insisted and I didn't want to argue.

    I never use coupons at restaurants and am always a bit miffed at friends who do and then tip on the bill rather than the full price. I live by a saying I heard a long time ago: "If you can't afford the tip, you can't afford the meal." I wish more people would.

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  2. Waitresses everywhere thank you for that. :-)

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  3. I'll start by saying that I think not tipping or low tipping is a no-no. I live in the UK where waiters/waitresses get at least a minimum wage but still tip around 10% (unless service was really bad).

    And I agree that if a coupon reduces the prices dramatically then it's good to tip more than the 20% if you'll otherwise be leaving a low value tip.

    However, isn't the "The waitress still did the same work" argument one that could backfire? Couldn't a customer then say "Well, I know I got a $100 bottle of wine but the waitress would have done the same work if I'd only ordered a $30 bottle so why give $20 just for the 20% of the wine cost?". The same thing could be said if you got steak rather than a cheaper pasta dish etc.

    Maybe tips could be based on number of courses/drinks served rather than $ value?

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  4. @IainM, you bring up salient points. There is much debate here in the states about our own tipping policies, and I must start writing about that more.

    Interesting, I was in London for awhile in 1989. I was young, afraid of being seen as "the ugly American" and unsure what to do about tipping. When I tried to tip a waiter he seemed offended. In his case, I hadn't noticed that a gratuity was included on bill. I stopped trying to tip in the UK because of that experience; I didn't want to offend. I sincerely hope I didn't stiff anybody.

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  5. The proper amt to tip is the % of the ORIGINAL price, not the % of the DISCOUNTED price. Duh!

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  6. Just curious what your views on tipping during happy hour are. When I go out for happy hour, I would NEVER tip based on the discounted amount. If I got 2 drinks and 2 meals for $20, I'm not going to give the server $4. Happy Hour at my restaurant is always a pain because we do more work for less pay. People tend to be more demanding, need more things boxed up, order more food items, drink through water faster, and demand faster service... yet tip poorly. I know it's the crowd that it brings in, but geez, the customer is already getting a great deal, the LEAST they can do is take care of the server.

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    1. I'll bet people order more food than they plan to eat during happy hour, and that is why you have more to box up? It would make sense if the food is discounted.

      Happy Hour customers should certainly be tipping at least based on what the food would have cost at full price. Is the full price and discount on the check? Or just the happy hour price? It really helps to have a full price, then the discount, then the actual price listed on the check so people can calculate the tip.

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    2. If happy hour has its own menu, then yes, the server may be screwed. Some of us wouldn't dream of not tipping well for good service regardless of the great deal we just got. Others, not so much. It's the luck of the draw.

      Wonder if an automatic gratuity can be added, per company policy, to all happy hour checks. This policy would have to be printed on the menus. Maybe just fifteen percent, then let customers add more if they wish?

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    3. Yes, people usually order more food because it's cheaper. Unfortunately, it's just the discounted price on the bill.

      Our Happy Hour includes more than half of our appetizers, pizzas, sliders, and most of our alcohol. It's not uncommon for them to order $100 worth of food, pay $50, then tip $5. More work, less pay.

      We do auto grat on parties of 8+, but it's on the Happy Hour prices. On a table of 12 where you could typically make $20-30, you make 10-15 during happy hour. It sucks.

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    4. So, the restaurant owner makes money but the servers make less. It would seem appropriate to offer happy hour wait staff an incentive for working the "poor shift." Something like $6 or $7 an hour instead of tipped employee minimum wage.

      I can hear all of the conservative "don't hurt the job creators" screaming that the restaurant owner can't afford that! But I know what many restaurant owners drive. There is wealth, and it is not trickling down.

      Anyway, an incentive, an auto-grat on all happy hour checks, or a bill with the full amount and the discounted amount printed clearly for the customer's info. would help solve some of the problems. I understand your point, dks64, that an auto-grat on discounted prices doesn't help much.

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    5. I live in California though, I make minimum wage in addition to tips. The only day of the week we don't have happy hour is Saturday, so we all pretty much just have to deal with it. I know that the owners of the restaurant I work for are super wealthy, I wish they would at least provide free food or require less of a tip out (35% almost every shift). I do like my job a lot, so I'm not mad about it, just a little irritated.

      I love the idea of the full amount and discounted amount on the bill, I think that would help.

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    6. dks64: I am about to log off, but at your convenience if you want to give me a shout via contact under cover or my email (blogger profile) I would be curious to know your impressions on whether or how tipping attitudes change in states with no tip credit. (<- My longest sentence, ever!)

      In the meantime, have a Happy Fourth of July! :-)

      Best,
      UCW

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    7. Hi UCW,

      I'll e-mail you soon, probably tomorrow. I worked last night and now I'm working this morning (running off 5 hours of sleep). Yay for restaurant hours :P

      dks64

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    8. ROFL -- hope it was all worth it.

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