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U.S. Opinions: Chicago

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‘Automatic gratuity’ is not a tip

From an editorial published in the Chicago Tribune on Tuesday:

“Automatic gratuity.” Isn’t that an oxymoron?

We’re talking about the 18 percent (or more) that many restaurants tack on to the bill for large dining parties, usually six people or more.

Instead of presenting the check for the meal and letting the diners decide how generously to reward the service, the house adds a flat charge. Of course you can pay more – and who hasn’t done so, by accident? – but you can’t pay less.

That practice might be on its way out. Starting in January, the IRS will regard those payments as wages, not tips, which could lead to higher payroll taxes for the restaurants. Darden Restaurants, owner of chains including Red Lobster, Olive Garden and LongHorn Steakhouse, has dropped the automatic charges at 100 of its restaurants and may phase them out altogether. Others will surely follow. Good riddance.

Even if you generally tip more than 18 percent, automatic gratuities can’t help but rub you the wrong way. Tipping is supposed to be discretionary – nay, voluntary. Some customers have even sued, saying it’s not up to a restaurant to say how big the tip should be.

People who work for tips (and their bosses) say the charges are just meant to make sure the workers are fairly compensated. Waitresses, bartenders and busboys rely on tips to supplement their less-than-minimum wages.

Most customers get that.

An automatic gratuity is not a tip, though. It’s a service charge. And often a big one.

Yes, large parties are a lot of work. A big table can keep several servers scrambling.

But from a customer’s perspective, a predetermined tip is mighty presumptuous. A server who doesn’t have to earn his or her tips has little incentive to try, and the customer has no choice but to pay a premium anyway.

Superior service ought to be in the eye – and the pocketbook – of the beholder.

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