We went to a Chinese restaurant recently that featured a special holiday dinner for 10 for $99, exclusive of tax and tips. But when we called to confirm our reservations, they said they would add a 10 percent tip to our bill, based on the regular $180 price. Is this a correct way of charging people? I thought tips were supposed to be based on service anyway. ‘Mandatory’ tips should
be in advertised priceThe state's Unfair and Deceptive Practices law doesn't cover tips, but "we do ask that if there is a mandatory service charge, that appropriate disclosures be made at any time you are quoted the advertised price," said Jo Ann Uchida, director of the state Office of Consumer Protection.
In your case, you should have been told about the mandatory 10 percent tip at "the initial contact," if not in the actual advertisement, she said. That way, you can decide to choose another restaurant, she said.
You mentioned that it was too late for you to change plans at the time of confirmation.
As to how much of a tip is tacked on, "a restaurant can establish what they want to," Uchida said. "It's discretionary. It's different if they're calculating general excise tax. Then it's not appropriate (to base it on the higher price)."
Hawaii Restaurant Association president Kathy Masunaga said it's standard practice for restaurants to add on a service charge for groups of diners, generally 15 percent.
She said she never heard of the mandatory tip added to the regular price, but noted that when people use special discount cards, they're "asked to please tip at the regular price."
(The 10 percent of $180 charge comes out close to 15 percent of $99, roughly $18 vs $15.)
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