Do Your Guests Feel Scammed by an Automatic Gratuity?

A recent LA Weekly blog called out our industry for how we handle automatic gratuities. 

The post used the word “scam” to describe how it feels for a guest to be charged an automatic gratuity and not be informed it had been included. 

The unfortunate truth is, many of us allow servers to add those gratuities with no real policy in place to protect the guest from adding a second gratuity unwittingly. There’s no clearer case for putting the guest first. The most efficacious way to eliminate this issue is to implement a policy es to guide the application of automatic service charges.

To that end, we offer you five methods of ensuring a guest is never surprised by the presence of an automatic service charge. 

Inform large party reservations

Being proactive allows the guest to make an informed decision. If they don’t prefer a restaurant that adds an automatic service charge for a party of their size, they can then go elsewhere. What they can’t do is accuse your restaurant of hiding something. You can make it an automatic part of your reservation process and nip confusion in the bud.

Post your service charge policy on your menu

You might be surprised how few operators take this crucial step in communicating when a service charge is applied. There are two obvious motivations for insuring your policy is easily accessed by guests. 

The first is, again, a proactive step. Informing a large party that an automatic service charge will be applied to their guest check ensures they aren’t surprised unless they want to be. The second is responsive. When a guest complains you can point to the menu and explain that you took pains to inform them by including it right on your menu.

Inform & highlight the service charge

What have you got to hide? By circling the service charge on the check and orally informing the guest that gratuity is included, you create a transparency that guests will appreciate. If you leave the automatic charge unmarked and unannounced, you run the risk of the guest overlooking it and including a traditional tip. 

Are the few dollars a server gains on that mistake worth the incredibly negative impression you may leave if a guest realizes later what happened? NO! Take this out of the hands of your servers. Make it your policy to both mark/highlight an automatic service charge, as well as informing the person who receives the check directly. If your business reputation means anything to you, this will be an obvious choice.

Write on credit card slip “Service Inc”

This is the last opportunity to ensure that the guest is aware that the service is included on their check. We know in many cases, guests hear what they want, but adding this notation to the credit card slip all but eliminates that concern. If they don’t notice it there, they need to look at themselves for any frustration they experienced.

Require a manager approval to add a service charge

This may sound extreme, but if you want to fix this issue and advocate for your guests, you should at least consider it. To start, it alerts the on-duty manager that a service charge is being applied. It also reminds the server that you are serious about implementing a policy that doesn’t punish the guest for bringing a large party to your location.