How servers get paid in the United States is something that many people disagree with. Rather than being paid a living wage, they often have to rely on tips provided by customers in order to get by. Many restaurants either automatically add a gratuity or provide suggested tips amounts on the bottom of the bill, usually somewhere around the 20% mark. So if your bill is $20, a $4 gratuity is standard. The majority of restaurant-goers simply select one of these options without giving it a second glance. In 2017, however, Cheesecake Factory customers filed a lawsuit against the chain after they realized the restaurant was calculating tips based on the total bill, rather than each individual’s portion. (1)
The Lawsuit Against How The Cheesecake Factory Calculated Tips
In 2017, Marcel Goldman went out for dinner with friends at the Cheesecake Factory. At the end of the meal, just as many groups do when dining out at a restaurant, they split the bill. Each member of the party was to pay for what they ate individually. When he went to pay his portion of the bill, he selected one of the suggested gratuities and continued with his night. Later, however, he took a second look at the bill, when he realized that the tip seemed unusually high – almost double the standard percentage for a gratuity.
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Goldman’s portion of the bill totaled $38.50. The suggested tip amounts, however, were between $11.50 and $16.94 (supposedly 15 to 20 percent of the bill). Some quick math, however, reveals that these suggestions are actually between 30 and 44 percent of his individual bill. The Cheesecake factory had calculated the suggested gratuities based on the total bill of his party, rather than his personal bill.
The lawyers helping Goldman with the lawsuit found that The Cheesecake Factory had been doing this for at least the previous four years. The goal was to have the restaurant chain refund all customers they overcharged during the tipping process during that time.
“Consumers should be aware,” Goldman’s attorney Julian Hammond said. “Why are we left to our own devices to do arithmetic acrobatics when the suggested gratuity represented is not true? The mathematic calculation is misleading. It must end; it needs to change.” (2)
Watch those #deceptive @Cheesecake factory receipts, their suggested gratuity is based on post tax amount. #Fail pic.twitter.com/av1DleOroV
— Harvey Brofman (@hbrofman) August 30, 2015
The Cheesecake Factory’s Response
As one might expect, the company denied any wrongdoing and forcefully pushed back against the accusations being leveled.
“All gratuity amounts listed on our guest checks are suggestions only. Guests are free to tip as they please. We believe our guests appreciate service provided by our hardworking staff and tip accordingly.” the company said in a statement. (3)
It is unclear as to what the outcome of this lawsuit was. That being said, it is a good reminder for all of us not to rely on the automatic calculations done by the restaurants but rather to calculate tips ourselves.
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Sources
- Consumer Reports
- “Why You Should Look Twice At The “Suggested Gratuity” On Your Restaurant Bill.” Buzzfeed News. Venessa Wong. August 11, 2017.
- “Cheesecake Factory Customers Say They Were Duped Into Leaving Big Tips.” Consumer Reports. Ashlee Kieler. August 11, 2017.