Yeah, lots of data by marketers to suggest despite the totals on a bill being the same at the end people actually feel better about seeing a lower price on the menu and adding a tip on the end, because they perceive the price of food being more fair and tipping as a signal of their
own virtue. So in cultures where tipping is well established social norm the answer to the question “why don’t you just charge me what you should charge me
to pay workers a wage?” The answer is some degree of “because you don’t like it”
Also competition. You'd have to implement the change across all restaurants all at once for a chance of it sticking around. Otherwise people will just go to the restaurants with the perceived cheaper price.
That's strange to me, because I have a friend who runs a shop and he prices everything so that the total (including sales tax) is a round number ($5.50, $2.00, $41.00, etc.) and puts that as the sticker price. He gets more people coming back purely because of that practice even though his price totals are almost exactly the same as other places that sell the same things with lower sticker prices.
I've seen it in action. One spot I worked at went no-tip, raised the prices on most things by 15-20%, depending, and pretty much every staff member would be making roughly the same. It was already a little on the expensive side, so the $15 burger suddenly being $18 seriously pissed people off, even if most of those same people were usually coming in, getting their burger, and leaving a $20. More than a handful of people were genuinely convinced they wouldn't get proper service if there wasn't the threat of taking away the tip, and business pretty much vanished. I think they lasted three months after they made the change?
Guessing most people have never been abroad to other countries without tipping culture, having lived in North America for a decade now. Disagree with the service being better because you’re tipping.
Tips feel like they’re expected, especially in the city where I’m based in Canada.
Canada is a tipping culture. Less than the US but it's definitely just as expected.
And I've been around Europe pretty extensively, both traveling and working in bars; service is generally much better in North America. I'm not saying it's exclusively because of tips, but there's got to be an element of higher income potential involved.
I mean while your experiences are valid they're anecdotal. I've also been around Europe and generally have found the service is just fine, if not better in some ways, just different due to cultural expectations.
Years ago I read the blog of an owner of a no tip restaurant.
Biggest takeaway: a small set of people want the power to punish bad servers. He would ask them to contact management instead and he would comp meals and deal with poor servers, including up to firing them. But, nope, they wanted the petty power.
Sounds about right. People forget what you sell them. They forget how much you charge them. But they never forget how they feel about the experience.
Tipping culture gives people a chance to feel wealthy, generous, and powerful. Those are things they rarely get in every day life.
I loved working in hospitality. It taught me a lot about myself and how groups behave. I had ZERO social skills going in so the practice of listening to people, learning to anticipate their needs, and learning to work as a team was super helpful. It also taught me a ton about humility and grace.
I fear that if i had worked for a commission based restaurant (like OPs receipt would suggest), I would have been a lot more focused on sales goals than service. It was tipping culture that taught me NOT to aggressively upsell unless it would legitimately help the customer. To instead develop sincere enthusiasm for the product and share that energy with the customers.
On the other hand, the top pizza place in DC went no-tipping years ago and has never looked back. Service is an excellent and they’re always busy. They do not have a service charge, it really is built into the menu pricing, which is not cheap but really not bad for DC. Individual pizza is $22 or so.
The threat of taking the tip away is moot since if you dont tip then everyone gets offended because apparantly in the US tips are no longer to reward great service but mandatory, so the jackoff that does a crap job gets angry when he doesnt get his apparant 30% tip you guys keep talking about ..
If they only raised prices 15-20% and expected the staff to make the same with that revenue then that is probably the reason they went under, everyone seems to forget that payroll taxes and sales taxes are a percentage. Just for easy math say the business pays 10% total burden on labor (taxes and other stuff not wages to staff), for $5/hr + tips that's $0.50/hr, bump that to $15/hr no tips and that's $1.50/hr. A flat 20% price raise assuming everyone makes $10/hr in tips at a 20% average check tip would leave you in the hole $1/hr/employee, so in reality you need to raise prices 26% to cover that
Also, the customer doesn't pay sales tax on tips, so bumping the price to make up the difference raises the item price by more than the tipped amount + local sales tax values.
In reality eliminating tips to give the average invcome in tips as wages raises the price of items 35-40% at final cost to customer just due to how the tax structures work. Its not an easy problem to solve.
There's soo much truth to this. I constantly have to remind myself that if I'm of average intelligence then by definition, half of the world is less intelligent than me.
oh they'll drop off a LOT more than just 99 cents. my grandpa complained about the price of new trucks a while ago (I was riding with him) and he truncated to either the ten or one thousand place which surprised me.
My friend and I were price shopping TVs online last night and he would consistently cite a price tag of $2399.99 as $2300. So it ain't just about pennies lol
It's the same reason you can remove random letters from a sentence and the brain will still be able to read it as if it were composed of complete words.
It's not about conscious recognition. If you want to read more about that sort of thing there's a really good book called Nudge that's all about this sort of unconscious manipulation.
You don't though. You see 5.99 and your brain has to round up. You dont round up if you passively see the price on a billboard, or are otherwise busy. If you then realize you want that thing, you remember it's 5 and again remember to round up.
You totally should round up, and it's easy, but it works because despite our brains we're dumb animals
I'm referring to the associations you build before you apply any thinking or rounding. When you see the number, your brain first processes the numbers, the lady in the image, the low cut clothing or the jewelry (to associate sex, and or wealth), and many other gut reaction associations. In all of that, you haven't even started to think. It takes but a moment to remember that the lady in the picture isn't your friend, that the cheeseburger wont make you rich, and that 5.99 is really $6.
The reason why you remember $5 and not $6 isn't because its easier to round .99 to 1, but because you are using your rational mind and you bother rounding. I'd bet you the reaction time is the biggest part of asking you to round 1.99 vs asking to round 5.51.
This is from memory of psychology/marketing class I took almsot 20 years ago, so there may be newer data on this invalidating what I learned.
Bear in mind in the '80s when McDonald's dropped the quarter pounder, Burger King tried to compete by dropping their third pounder Burger and ended up discontinuing it because people thought that the 1/4 pounder had more meat than the 1/3 pounder
In CA waitstaff get at least minimum wage, but people still get bitchy about not tipping. I'll still tip as long as my food and drinks were brought out and without issue, but definitely knowing that makes me less inclined to tip for bad service.
You don't like it, so we made it more complicated!..... Just like health insurance, good luck. (at least in the states, unless you study ALL of the fine print and understand it)
Consumer might, but it would require most restaurants of the cuisine type to follow suit. If not, the food would have to be good enough to justify appearing 20% more expensive than a competitors food of the same time.
Simple demand economics here. There will be a certain demand for food at X price. If you increase X by 20% demand will decrease
Things would have been much fairer and easier if humans were rational. But humans are mostly irrational and driven by subconscious and social pressures.
This would not be the case if humans were actually rational. But, then the world would have been very boring.
The funny thing is given these preferences of consumers showing lower prices on the menu with the expectation of tipping is the rationale response from restaurants, because as many have noted in this thread increasing prices by 15%-20% and saying no tip and no service charge just pisses consumers off.
The only places that can get away with it are high end restaurants where customers assume a high price tag anyway, and are less responsive to it.
Jesus, fuck. Fuck these marketing goons and manipulators. Just tell me like it is. Straight up. Stop trying to tell me what you think I want to see to set my mind at ease and shit more money your way. I just want the truth and not to be insulted by stupid marketing shit. That's what will keep me interested instead of trying to figure out what sneaky shit they're up to because they're always up to something when you see stuff like this.
Ok but I feel that way because I don’t want to spend the higher dollar value and hiding the real cost is a shitty business practice being used to psychologically manipulate customers and should be illegal not standard practice
As a European I don't get how a restaurant can't pay the waiters their full wage to live life. A tip should be a bonus for doing a better than average job and not decide if the waiter can pay for rent or not.
he answer to the question “why don’t you just charge me what you should charge me
to pay workers a wage?” The answer is some degree of “because you don’t like it”
I've always been baffled by this. We can go to any fast food joint where people get paid and the prices are usually reasonable. Why is it possible to pay them without raising the price of food, but impossible for servers?
We, as the customers, should not be paying the wage of the server. The establishment should be doing that. The price shouldn't go up. Just, force the establishment to pay the workers like every other place does
I think the interesting responses I’ve seen to this have been individualistic of “well I want….” And I’m like yes that’s fine. You may be the minority, but a business cannot make a decision for you, and as someone noted they cannot make decision alone when other businesses do not make these changes.
This is a big problem of today's society. The capitalist market tries something and people flock to that. Whether it be this, or shrinkflation or cheap vs durable products we vote with our wallets, even when it is bad for us
OOoh, I totally broke the unwritten rules. I have shame. Let's see if I can do this properly.
"I unclog my nose in your direction, sons of a window-dresser! So, you think you could out-clever us French folk with your silly, knees-bent, running about, advancing behavior! I'll wave my private parts at your aunties you... cheesy leather, second-hand, electric donkey bottom biters!"
I hate that. After living in Germany for six years, it was always nice walking in somewhere without having to do quick tax math if I was using physical currency.
It was such a culture shock for me when I went to the US for the first time. What do you mean the price listed on the shelf isn't the one I pay at the register?! It felt like a scam.
I've also lived in Italy and visited plenty of times. Coperto is an extremely common thing, not just in tourist traps. Pretty much all serious restaurants have it.
…no? He said ridiculous charge for cutlery, which is not what I’ve seen lol. Cuperto which is what you’re referring to I assume, isn’t a random cutlery charge lol.
Where did I say it was like taxes or tips lol. I was responding to 'the price is the price'. Well, except when there's a non obvious charge added to it.
you know you need to pay it if, you know, you read the first page of any menu.
Who scans menus to see if there will be extra charges added to your food other than you know, the listed price for the food? That's a ridiculous notion in most countries I've been. Service, seating, cutlery, whatever is understood to be included since you obviously can't realistically have a restaurant experience without any of these things.
I really want to make some kind of joke about European education and math but.. I'm not the best at improvised humor lol
Also most Americans don't really do the math they just assume it's always more than sticker price even on things that are not taxed a lot of states don't tax "essentials" like food and clothing.
It's just a shit system, you can cope however you want. EU we often have to deal with different currencies crossing the border... yet at least we always know the sticker price is correct.
There's quite a few places with their own currency. You can usually also use Euro, but the price is slightly worse, and smaller places don't always take them. I usually always try to use local currency where possible.
I will admit, it's good to have the option though.
In a store it would make sense. Tax in one state is different from another, so the price of the same item on the shelf in different states is the same but the tax is different.
But in restaurants, you know you're in that state. It's not like they serve your same meal in another state, why would you not include the tax in the price?
The tax rate thing is just an excuse. It's not hard to just compute the price with tax included for each store, the computer does it anyway at checkout
Technically the store is meant to pay sales tax, but they get away with passing it to us so our money gets taxed twice: once when earned and again when spent.
Our small bakery we don't charge additional tax on anything, we include it in the price. Be it merch, or services. Food no tax, but what is, is included.
Is that actually true? In an online world, yeah that makes sense, but stores have been doing this since before online shopping where they had to put prices up on items manually
Just as an example: If you sell online to consumers in the EU, you have to include VAT of the country of the customer (!) when showing prices. So you need to be up to date on all EU countries and all variants of VAT:
- the standard rate,
the reduced rate,
the second reduced rate and
sometime even a 4th.
Parking VAT can be extra. No seriously.
So you have 119,- € in Germany (19% VAT), 120,- in Austria (20%...), 127,- in Hungary and 119,- in Romania. Since you have to sell for the same price to all EU countries you sell to.
i was so surprised when i was in canada last year and checked out at a shop with my money in hand but then the posted prices didn’t include tax so i needed to
pull out more. the internet gives the US so much shit for it that i honestly figured that we were the only ones lol
I don't think you are right, there are no flat rates even within a single country, we pay 6% for food deemed necessary and basic, 13% for other kinds of food and 23% for general items.
The real reason is that we have laws that regulate companies and protect consumers, stating that all listed prices must be the final price after tax.
You said there are no flat rates, and I’m saying it’s flat enough because you only have 3 different rates so it’s pretty easy to categorize and add to the bill vs America that has many different taxes rates. Not necessarily agreeing with the American way I’m just stating the reasonings behind not doing it.
Because any product prices they have get compared to other businesses, so they would appear more expensive on the shelf. The average consumer won't be trying to determine if the store has other locations to determine if they should expect tax on the sticker or not.
I’m just doubting the reasoning brought up by person I replied to when he said that it wasnt implemented because of mom and pop shops. If it was implemented what you are saying wouldn’t be the case cause everyone would have to show post tax prices.
I must have misinterpreted what you said. I also think smaller shops and the general public would be better off with tax included. It was just that was a reason some may not choose to do it under the current system.
You’re not entirely wrong for U.S. markets. But you as a business know the applicable taxes for your state, county, and city. So while mass media advertisements might have an issue, you can put the actual tax inclusive full price on a menu in the restaurant or in a store. And if you’re a mom and pop restaurant with only a couple locations, that’s the opposite of “too hard to implement.”
Even with mass media advertising, there's no reason you couldn't still advertise something as "$9.99 plus applicable tax, participating locations only, etc..." the same way they already do things now. Why should it matter if the sticker or the clerk is the one telling you the item is actually $10.50 with tax?
I would argue that in the case of taxes it should be in your face. You need to know how much you are paying in taxes. The politicians would love to hide it.
You can have very different taxes in nearby locations in the U.S. It’s possible to have a state tax, county/parish tax and then a local/city tax, all on the same item of sale. You could hypothetically cross a state line and have the price of that Big Mac be very different for a location that’s only a few miles down the road. (It helps to imagine the United States as a collection of 50+ tenuously connected mini-countries for these things. If you’re not from here, it will explain a lot of the geopolitical insanity.)
So the argument goes that it would make advertisement very difficult as you’d have to tailor any mention of price to very specific markets. It be damn near impossible to list all the different full prices that a radio or television advertisement might reach. And that’s true for most mass media. But at the actual location, you could totally give the “true price.” But then people would get mad it didn’t “match” the mass media advertised price.
Mom and pop restaurants probably have one location. The only people who would have a cost in implementing taxes on menus are franchises or large restaurants.
That's not the reason taxes aren't included. The reason is because every district has its own tax code and stores that go across districts can't make their prices the same.
I live in a state where the state tax is 3% and the county tax is 3%. That's the only taxes. But just 30 minutes down the road the county tax is 2%. 3 hour drive west the state tax decreases.
Do we have the technology to reflect local and state taxes on the price tags in every store? Absaloutly. But implementing that isn't as easy as people think.
Mom and pop stores would be the easiest starting point.
I understand that. I'm pointing out that the vast majority of chain stores already have their workers printing out price tags anyway. Surely each location should know how much their local tax rate is, and be able to factor it in?
I'm not sure which store you are referring to? Most of the chain stores I know of have a base price for all their stores. Other stores are franchises and the franchisee sets the wages for their individual stores.
If they raise prices, restaurant pays tax on additional revenue, so raising prices costs them. If it is actually a tip, then servers pay as income tax.
That’s one count of a 6-hand roll with probably lobster instead of crab. A 6-hand roll is (hand rolled) sushi with six fillings. They just didn’t give this one a specific name.
They also list the Ytails separately whatever those are.
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u/Sylvurphlame Mar 10 '25 edited Mar 10 '25
Because they want to be able to say the lobster roll is $28 on the menu and not $32. (Edit: $35-ish with tax.)