> The law, Senate Bill 478, set to go into effect on July 1, prohibits the use of “drip pricing, a practice in which companies advertise only a portion of what a customer would actually pay for a certain product or service,”
> a 5% or 6% SF Health Care Security Ordinance surcharge ... also charge customers a 20% service fee that goes to employees in lieu of the traditional tipping system.
What's next. A fee for soap used to clean dishes? A fee for a customer's share rent? A fee for providing a bathroom? A fee for vegetables?
It's dishonesty. Charge customers what they need to pay. Put this on a price.
> “You can’t just jack up prices,” he said. “People are going to get sticker shock. Now a dish that was $20 before will be $26. People will notice that.”
“Oh no, I can’t lie to customers anymore. My business will be ruined!”
'
Some restaurants, like China Live, also charge customers a 20% service fee that goes to employees in lieu of the traditional tipping system.
...
“You can’t just jack up prices,” he said. “People are going to get sticker shock. Now a dish that was $20 before will be $26. People will notice that.”
'
How is compensation based on the total price functionally different than a commission?
The only time I got paid per interaction with a customer it was called commission. The rest was base pay just for being there doing my job or bonus for meeting some goal in aggregate.
The way the “rest of the world” does it is exactly what I described. They just charge enough to pay the employees an acceptable wage as the base rate.
Weird conclusion to draw in the absence of information but ok.
I was selling TVs and lawn mowers at Sears. I had a base hourly rate then received commission for the items I sold. These were called commissions because they were an incentive created by the company, not the customer. I received very few (but not zero, think “carried item to the customer’s car”) tips from customers, which are not commissions because they are customer driven incentives.
Tips: optional and set by the customer. Typically unknown until after the interaction.
Commission: pre-defined incentive for performing a specific action. Set by the company.
Wages: pre-defined, but not a function of any specific action.
By definition you can’t make tips part of wages. You can tell customers not to tip, increase prices, and pay employees commission, but that’s also not a tip. Or you can tell customers not to tip, increase prices, and increase wages but that’s also not a tip.
Front of house staff in a restaurant aren't doing sales as the majority of their activities. They're customer service. That's why it's not a commission.
Is it your assertion that retail sales does not involve customer service? Do you tip receptionists? Do you believe food service does not involve sales?
A tip is a gratuity. It comes from the customer as a thank you. A proportional incentive from the employer is called a commission.
No, of course not. They should be paid a reasonable wage for doing a job the same as everyone else. And it shouldn’t be called a “tip”, because it isn’t, because it doesn’t come at the customer’s discretion.
I wonder if this article is ragebait but I do feel kinda irked when I read things like this.
Coming from a place where the price you see is the price you pay (i.e. most of the world), the US surprised me with the taxes on checkout, then the business's fees, then the waiter tips, then the fucking "valet" who block off the parking lot and gave me no option but to use their "valet" service. By the time I finish paying everything, it could cost double or more what I was seeing on the menu.
I am surprised these things are treated as normal.
> I am surprised these things are treated as normal.
Most Americans have never lived, or significantly traveled, in a country other than their own.
So they naturally treat every aspect of American culture as "the only possible way."
It's really a shame. America has many great things. And in some areas, e.g. how prices are displayed, and healthcare, we could definitely learn from others.
In the UK, we have had creeping adoption of US style tipping … 10-15 years ago, 5% cash tip was middle of the range to quite generous. Now 12.5% “discretionary” service charge is added to the card payment and you are made to feel like a pariah if you question this. It is a hidden price hike to the restaurant and doubtful the wait staff see more than a fraction. A dark pattern.
It's such a scam. Many places with valet will have valet-only parking lots. Often, they will have them in locations where self park garages are too far away to be practical. (I'll still park at those garages, though; I'd rather walk than use valet.)
Some valets will drive your car recklessly to a parking spot and change your power seat configuration. Valets with tight lots will double or triple park cars, so you'll need to wait for them to Tetris your car out of wherever they parked it. If you're picking up your car at an off-peak time and they only have one attendant, you're waiting at least ten minutes if there are others in queue.
"Free" valet; paid valet; doesn't matter. They all suck!
The surge of "junk pricing" has changed at least my US travel behaviour significantly. Used to heavily use Lyft, AirBnB, Uber Eats - now its hotel, car rental and grocery shops.
Several hotels I've stayed in recently charged an "amenities" fee. When I asked what amenities one said it was for the free wifi and use of the lounge.
The restaurants may respond with anger, but I think many of the customers will respond with relief and happiness at the law (I would be in this latter group).
First it was "no one wants to work (for sub-livable wages) anymore", now it'll be "no one wants to be surprised by extra charges anymore". What is the world coming to?
> Aside from its potential impact on employee retention, the ban on restaurant surcharges would force him to increase menu prices, he said, which would negatively impact business.
I don't follow this reasoning. You move x dollars from one line to another on the receipt, but the customer still pays the same amount. I could understand if your competitors were able to hide the true price from the menu and you couldn't, but the law levels the playing field for everyone. As for employee retention, nothing is stopping you from compensating a portion of the sales. That would be the same as tipping out from a mandatory service charge, only it would happen internally instead of on the customer's receipt.
33 comments
[ 5.1 ms ] story [ 51.1 ms ] thread> a 5% or 6% SF Health Care Security Ordinance surcharge ... also charge customers a 20% service fee that goes to employees in lieu of the traditional tipping system.
What's next. A fee for soap used to clean dishes? A fee for a customer's share rent? A fee for providing a bathroom? A fee for vegetables?
It's dishonesty. Charge customers what they need to pay. Put this on a price.
Of course they are. Wouldn't it be simply awful if they had to advertise their actual full price, just like restaurants they deliver from?
"Competition is for losers."
“Oh no, I can’t lie to customers anymore. My business will be ruined!”
' Some restaurants, like China Live, also charge customers a 20% service fee that goes to employees in lieu of the traditional tipping system.
...
“You can’t just jack up prices,” he said. “People are going to get sticker shock. Now a dish that was $20 before will be $26. People will notice that.” '
Hmmm. $201.2= $24, not $26.
I guess only some* people will notice...
Next: get rid of tipping, or to be more precise, include the tip in the price.
An included tip would incentivize getting customers out the door to get new butts in the seats and collect more included tips.
If business owners want to incentivize their workers to do a good job the knob they have available is the base wage.
Nope. It's called having a standard job, with standard pay. It's not sales, it's customer service. They're different things.
And the rest of the world does it fairly well, with far better outcomes than the US system.
The only time I got paid per interaction with a customer it was called commission. The rest was base pay just for being there doing my job or bonus for meeting some goal in aggregate.
The way the “rest of the world” does it is exactly what I described. They just charge enough to pay the employees an acceptable wage as the base rate.
Sounds like you were being taken advantage of. That's without knowing the details of the situation though. :(
I was selling TVs and lawn mowers at Sears. I had a base hourly rate then received commission for the items I sold. These were called commissions because they were an incentive created by the company, not the customer. I received very few (but not zero, think “carried item to the customer’s car”) tips from customers, which are not commissions because they are customer driven incentives.
Tips: optional and set by the customer. Typically unknown until after the interaction.
Commission: pre-defined incentive for performing a specific action. Set by the company.
Wages: pre-defined, but not a function of any specific action.
By definition you can’t make tips part of wages. You can tell customers not to tip, increase prices, and pay employees commission, but that’s also not a tip. Or you can tell customers not to tip, increase prices, and increase wages but that’s also not a tip.
That's sales, thus the commission.
Front of house staff in a restaurant aren't doing sales as the majority of their activities. They're customer service. That's why it's not a commission.
A tip is a gratuity. It comes from the customer as a thank you. A proportional incentive from the employer is called a commission.
So, is it your assertion that front of house McDonalds staff should get a commission on their "sales" instead of being paid a better hourly wage?
Faster service with honest pricing? Sounds good to me.
Coming from a place where the price you see is the price you pay (i.e. most of the world), the US surprised me with the taxes on checkout, then the business's fees, then the waiter tips, then the fucking "valet" who block off the parking lot and gave me no option but to use their "valet" service. By the time I finish paying everything, it could cost double or more what I was seeing on the menu.
I am surprised these things are treated as normal.
Most Americans have never lived, or significantly traveled, in a country other than their own.
So they naturally treat every aspect of American culture as "the only possible way."
It's really a shame. America has many great things. And in some areas, e.g. how prices are displayed, and healthcare, we could definitely learn from others.
I also stopped going to places where it's expected to tip, like sit-down restaurants.
I still go to diner-style places and franchises, in my country there's no tipping bs going on in those kind of places.
It's such a scam. Many places with valet will have valet-only parking lots. Often, they will have them in locations where self park garages are too far away to be practical. (I'll still park at those garages, though; I'd rather walk than use valet.)
Some valets will drive your car recklessly to a parking spot and change your power seat configuration. Valets with tight lots will double or triple park cars, so you'll need to wait for them to Tetris your car out of wherever they parked it. If you're picking up your car at an off-peak time and they only have one attendant, you're waiting at least ten minutes if there are others in queue.
"Free" valet; paid valet; doesn't matter. They all suck!
It’s bad that it won’t apply to doordash & c (why?) btw, I hope it’s just a matter of time.
Right, they will notice when ordering not when receiving their bill.
This is also good for places that rent out stuff, but have a fine print like 'mandatory refuel fee of $x'.
If it's mandatory it should be part of the price.
Bring this to AZ please.
First it was "no one wants to work (for sub-livable wages) anymore", now it'll be "no one wants to be surprised by extra charges anymore". What is the world coming to?
I don't follow this reasoning. You move x dollars from one line to another on the receipt, but the customer still pays the same amount. I could understand if your competitors were able to hide the true price from the menu and you couldn't, but the law levels the playing field for everyone. As for employee retention, nothing is stopping you from compensating a portion of the sales. That would be the same as tipping out from a mandatory service charge, only it would happen internally instead of on the customer's receipt.