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January 12, 2009

What happens when you leave your credit card at a bar?

The short answer: Bad things happen.

Every time I've heard of someone leaving their credit card at a bar, I hear about how the bar itself tacks on a massive fee.

It could be as much as 20 percent, or even 50 percent, depending on the bar.

But is this fair? I mean, is it really that inconvenient for bartenders/managers to have to deal with? And is it really necessary for them to charge such a large fee?

I'd like to hear from bar owners and patrons who have been in this situation before, just because I don't know that much about it.

Personally, I don't think I've ever left a credit card at a bar overnight. but I know a lot of people do.

In fact, I'd like to share a story with you. Ian, a friend of a friend, left his card at Brewer's Art this past weekend ...

Here is the tale, in his words:

Friday night I went to Brewer's Art, started a tab, had a few beers and absent-mindedly walked out without settling my tab. I realized I had forgotten to settle up when I got home, but I thought no matter, they have my card, they can get their money if necessary.

Saturday, when I went back around 8 p.m. to pay and get my card back, I was told a manager would have to come down and they were really busy. I can't really be more specific but the barman was being sort of surly with me, after standing around like a chump for about 15 minutes I told the guy it didn't matter and I would come back tomorrow - the barman grunted.

The next day I went back just after they opened at 5pm, the bar was empty and this time a manager did come down with my card. "We expect a tip" he said as he handed over the slip for me to sign.

I don't know quite what I did to deserve to be treated like a [bad word]. I mean people must do this from time to time, I wasn't malicious and the inconvenience to the bar must have been pretty minimal.

Whadayya think?

(AP photo)


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Posted by Sam Sessa at 11:51 AM | | Comments (54)
Categories: Bars & Clubs
        

Comments

I've left my card at Brewers Art overnight before and they didn't give me a problem about it at all. I explained, smiled, and apologized; the bartender smiled back and handed me my card from the register.

I of course didn't wait 24 hours and then try to retrieve it at 8pm on a Saturday when they were likely extremely busy...

I've also never heard of anyone being charged a fee for this. Maybe it depends on the person.

I don't want to badmouth the Brewer's Art, but there is just no excuse for that. I've been on both sides of this. Years ago I was a bartender at the Club Charles, and people would pretty regularly forget and walk out. They would usually come back within a few days and settle up. After all, we had their credit card. Treat them well, and most of them did leave a nice tip. About a year ago I left my card at Darker than Blue. The next morning I walked in, and they had the card waiting for me at the host's station up front, and they recognized me and immediately pulled it out. Treat your customers well, they come back. Treat them like thieves, and you may never see them again.

I have been known to leave my card at bars and have never had a problem. Most places i have found the practice is to throw on a 10-15% tip and run the card. I have never been charged any fee or anything. I actually end up feeling bad because i usually tip 20%, so i end up giving them the added 10% when i pick up my card.

I have personally left my card at brewer's before and never had a problem, but I can see how when they get busy it might turn into an issue.

I've never had a fee charged to my card and I've left it at a bar twice now on accident. I know that when I was a bartender, it was annoying mainly because the tip you give most likely won't end up in the right hands if you do it days later. Some bars will automatically charged 20% tip if the card is left and I kind of agree with it. If I leave my card somewhere it's my own dumb fault and I would want the bartenders to get the tip they deserve regardless.

I've done it once or twice...I don't have a problem with them tacking on 18 or 20% as auto-gratuity. That ensures the bartender who worked that night gets the cash, and not the Sunday afternoon guy.

Only problem I have and its never happened to me, but some bars (especially in NYC) have a tendency to 'add' drinks and then slap on the gratuity. That ain't cool.

Here' the problem folks, depending on the point-of-sale system, we can't close our daily register without processing all open tabs.

Therefore, if you leave your card and vacate the bar, we can't close the shift, and nobody can be paid that night.

Moreover, the left cards must be stored in the house safe, which usually can only be opened by one or two people. Therefore, when you come back to collect your card, it should be during office hours, not when the bar is full of people and busy.

At my bars, I have always had a policy that abandoned cards can only be retrieved during office hours, and all tabs left open are subject to 25% gratuity.

On average, 10-15 people would leave their cards on a busy night. They would all come back on the next busy night to retrieve their cards and close their tab. My manager would spend most of his shift escorting people up to the office, opening the safe, and closing out tabs, which severely impacted his ability to manage the bar.

Your best bet, don't leave your card at a bar. If you do, blame yourself, not the bar. Call the bar and ask when the best time of day is to retrieve your card.

Now, in order for a bar to automatically charge you for gratuity, their policy must be posted or printed on the menu. When you place an order with your server, you are entering into a contract, and their policy is part of the terms and conditions of that contract.


I think it's perfectly fair for them to expect a tip - regardless of whether they bluntly come out and say so. They've safeguarded your credit card account from potentially much greater damage than if someone had walked out with it. You haven't dealt with headaches until you realize your card's been stolen or your account compromised.

In any case, the first thing you should do if you can't easily track back the card to the place you left it (say you visited neighboring establishments that night) is to immediately call your credit card company to alert them that the card has been lost and potentially stolen. They'll put a freeze on all charges to the account and send you new card with a new account number to you.

Sorry for everyone who thinks it's not a big deal, but it is.

Mark is correct, and I think that all bars should have a stated policy that says, if you leave here without closing your tab, we will charge you a 25% convenience fee for doing it for you.

As a former bartender and bar manager, this was always one of my biggest pet peeves! Saturday and Sunday were always days for the drunken fools who left their cards at the bar to come back and while I understand giving good service, more times than not the yahoos who left their cards the night before were not our favorite people!

The bartenders who did the work the previous evening didn't get to add those to their tips and I always had to fudge numbers at the end of the night for the 10-12 open tabs that I had.

And let's not forget about the idiots who know that their card is not valid, but leave it anyway on the hopes of having a night of free drinking. That happened usually two or three times a weekend. Now, this is about 10 years ago, so it might be possible that bars can run cards to make sure that they are valid before starting a tab.

The only time I think it is okay for you to walk out on a tab is if it is at your neighborhood bar that you go to more than once a week. They know you there, they know you'll be back and they know they'll get their money. At any other time, it's stealing.

The only problem I have had was with my card being given to the wrong person at Max's. The bartender said he would waive the charge and call me if the other guy came back. I didn't get the call and I was never refunded the charge, although if I called to complain they would have but it really wasn't worth my time since the tab was about the same amount.

It was just a pain in the ass to get a new card.

I left my card at the Brewer's Art once as well, except it wasn't an open tab- I walked in to buy some beer to go and stupidly left my card on the bar after paying.

When I realized the card was gone the next day, I didn't know if it was there or if I had dropped it on the street and needed to cancel it. When I called the bar (around lunch time), there were apparently not enough people working for anyone to leave the bar and just tell me if they had it or not. Kind of an annoying answer when you're worried about whether your card is being run up by some one who found it one the street or if it was safe at the bar.... but yes I know, my fault for leaving it.

They weren't rude to me when I did make it there to pick it up, but in response to another post, if it's rude to pick it up at night when it's busy, and they're too short-staffed during business hours to deal with it when you call, when do you go?

I've only left my card at a bar 3 times maybe, and surprisingly it's never when I've been out all night, it's when I stop in for a few drinks. In that sense, I agree with the author that when you go to pick it up you don't feel like you did something terribly wrong. However, I imagine alot of people who leave cards open repeatedly are the drunk ones stumbling and causing trouble at night, then leave their cards, and then make the staff go to extra trouble the next day... so maybe if you get an attitude when you pick up a card you've left it's because they're assuming you were one of "those" people.

I've left my card at Brewer's on more than one occasion. I know a bar tender there, but I've dealt w/ the manage each time and each time he was very cordial. He allowed me to come by earlier in the day 11 AM to pick up the card and they were always very nice to me.

"When I called the bar (around lunch time), there were apparently not enough people working for anyone to leave the bar and just tell me if they had it or not."

fyi - brewer's doesn't open until 4PM. so maybe that's why there was the issue.

On that note. I have always found it really annoying that brewer's isn't open for lunch (at least the bar and the bar menu).

To play devil's advocate... I bet there are legal issues and credit card merchant agreement issues with tacking on any fees without consent. Also, dont' forget that just because you post notice doesn't make it kosher. AS an example, the minimum credit card purchase shenannigans falls into this category. Visa/MC explicitly dictates that no minimums can be set by the merchant in their agreement.

Just to add my voice to the never-had-a-problem-with-this-at-Brewers-or-anywhere-else chorus--nope, never have.

The 8x10 has a notice behind the bar that says any credit cards left at the bar will automatically be charged a 20% (? - it may be 15%) gratuity. I figure since it's posted, it's totally fair game.

Bob,

Your information is semi-correct. Minimums are not allowed, but no merchant account issuer/processor will enforce this rule.

There are many different issuers of merchant accounts. If my account holder comes after me for having minimums, then I am going to cancel my merchant account and find another provider.

Automatic gratuity is another issue all together. Automatic gratuity is applied to all abandoned tabs; regardless of payment method. As long as the business informs the consumer of their policy, it can be enforced.

When you step up to a bar and grab a menu, if that menu states: "All tabs left open at closing are subject to a 20% automatic gratuity." then they are well within their legal right to charge said gratuity.

You, as a customer, have the choice of reading these terms, and deciding to take your business elsewhere.

I'm still wearing my devil's advocate horns :D

So as long as I inform you of something I can enforce it? Thankfully we have laws, rules, regulations, etc. to keep this in check for the obvious reasons. You are hereby informed of my posted regulation that all responses to this post be in Pig Latin.

On minimums... Visa, Discover, and MC have this rule. American Express does not have a minimum rule but only allow minimums if the other card companies used at that retailer allow minimum purchases. This results in a defacto no minimum rule for the major players. Everyone is welcome to go elsewhere, but I don't carry Diner's Choice.

Back to the restaurant levied tip… Needing to process all tabs at the end of the night/shift doesn't hold water though. That is a weakness in the point of sale system. The major card companies enforce a strict zero-tip policy in processing holds for your bill. Additionally, no one is allowed to charge to your card without your authorization/signature above $15 or so. So if you sign, you have agreed to the tip. Please don't get me wrong though. I see a few sides to this discussion, but it just means there is a leg to stand on if a dispute is made and the merchant has to produce a signed receipt showing how it went down. Once it's signed, it's a done deal if you've paid the forced gratuity and didn't strike it out and compute your own total.

This falls into the same large group gratuity gray area issue though. Most people just pay it and move on. I usually tip more than what they force you to pay though so they are on the losing end in my case, but I can imagine it averages out with the cheapos out there. I've been left holding the bag while playing treasurer for a large group - annoying. I'm sure plenty of folks pass this along to the server which makes the forced tip a good thing in that case. I think the driver here is different than what we are talking about though. This appears more punative.

That said, I have left my card at Brewer's Art once (the only time I have done it anywhere, oddly enough), and they were really nice about it and didn't force me to apologize in Pig Latin or pay a fee. My loyalty to their restaurant has paid off for them though since we are there at least a couple of times per month.

wow go to the gym and grocery store and I miss everything.

At Mother's we add an additional 20% gratuity to all cards left behind. We didn't use to. However the magnitude of cards left behind each night (particularly home Ravens games) was ridiculous. We have three separate containers that we store the cards in, in alphabetical order. As a bartender I do get annoyed sometimes when people come pick up their cards.

For example, Saturday night after the Ravens victory this guy "thinks" he left his card the night before. We get his I.D. (and it's slammed BTW. SLAMMED) and we check all three containers only to find out he realized was wrong. His friend was the one who started the tab. Oops. His card was in his wallet.

I know shiznit happens when alcohol is involved, but if you find yourself having left your card behind at Mother's it is never a good idea to pick it up during a home football game or playoffs. I don't have time to use the ladies room let alone look for your card.

I guess we're talking about mandating morality here. Way to stir the pot, Sam! :D

"So as long as I inform you of something I can enforce it? Thankfully we have laws, rules, regulations, etc. to keep this in check for the obvious reasons."

Agreed, it's not ideal, but just as I won't fight it when a restaurant tells me that when my party is larger than 6 people, they're going to tack on an automatic 18% gratuity, I'm not gonna fight a bar that says "Hey, please be responsible when you drink and remember to pay your tab. Otherwise, we're gonna determine how much you tip us."

To all those bar staff/owners/managers who have been complaining on this blog about people not closing tabs I have just one thing to say – get over it.

You guys make your money by taking peoples credit cards from them and selling them beer, wine and spirits. Oh and guess what! some of those people get drunk. It is 100% predictable that a proportion of your (loyal) customers will amble off into the night without closing their tabs. It’s called “the cost of doing business”. So Mark who complained that much managerial time was lost sorting out tabs - fine, but if it were really a huge problem you should stop allowing people to open tabs – and then watch your business dry up, your staff not get paid and your bar close.

All jobs of have their downsides, some more than others, but hey, it’s a free country and no one forces you to own a bar or work behind one.

Bob, you're missing the boat when it comes to the gratuity. Take away the credit card issue all together.

Let's pretend you are paying cash.

You scoot up to the bar and ask for my drink menu. I hand you the menu, and you read, "20% gratuity added to all checks." You then proceed to order. Regardless of how you pay (cash, credit card or check) you have agreed to the added gratuity, simply by ordering. The bar has agreed to provide you with exactly what is printed on the menu, absent of a substitution notice.

If you order a Grey Goose martini and I serve you a Zelko martini, you could decline the beverage and not pay. The agreement would be voidable at your discretion.

If you refused to pay the added gratuity, and it was clearly indicated, legally, you could be charged with theft, although I have never seen someone take it to this extreme.

And, yes, you can regulate and mandate morality on private property, in a private business; just as you are free to-do-so in your home.

I have seen many bars with crazy house rules. If you're going to be there, you're going to have to abide by them, or go elsewhere. At Death & Company in New York, guys can’t chat up girls unless they initiate the conversation. We’ve all been to bars where you can’t wear a hat, and more and more places are banning cell phones (which I really don’t understand). I want you to call people and tell them to meet you at my bar.

Back in law school I do remember some case law where merchants lost in court regarding credit card minimums; I have never seen a case where a restaurant/bar has lost regarding automatic gratuity when properly informing the customer.

MtVernon Girl,

There's a flipside to your argument.

Btw, I'm not complaining. I don't mind processing your card and adding gratuity. So, there really isn't anything for me to get over.

You're right, nobody is forcing me to own bar, and nobody is forcing you to go get drunk at one. If you're going to come out, you have to play by the rules.

When you go to a bar, you don't have to open a tab; you can pay cash. If you choose to open a tab, there are rules regarding that tab which are usually clearly indicated. Don't like the rules, don't open a tab.

I get the feeling you have issues with personal responsibility. Maybe you should go grab a drink, pay cash.

Bob,

After doing some LexNex research, last year, a patron sued Scores in New York for $2,300 in gratuity that was automatically charged to his card.

He had quite a bill. He lost the case, and subsequently lost a second case where Scores sued him to recoup their legal bill in pursuing their claim.

He never appealed.

Amen to the Queen.

The reason we take credit cards is for the sheer fact that we don't trust our customers to return to the bar after a few drinks, tip, and sign their check. The following people are helping your drunk ass find your precious credit card: the bartender who waits on you from your original tab, the person who answers the phone and looks to see if your credit card is at the bar the next day during lunch time when you wake up, call us, and say, "uh... I think I left my credit card there last night?", the person who is working when you come in to retrieve your credit card who can't wait on the people at the bar bc they are searching through 3 different containers full of credit cards to help you out.

Yes, it's annoying. And I think 20% is fair if anything.

I've never left a tab at a bar.

P.S. What the hell's in the water at the Brewer's Art?

Sessa , I think you've got sufficient fuel for a story here. I've been in the service industry in one way or another for over 15 years. I've always heard that auto-gratuity was illegal. But I've done some research and can't find a definitive answer to the question. I would love to see what someone who can dedicate resources, connections, and time to this topic comes up with.

By Mark Twain's logic, if you post your policy, it's not illegal. What is to stop every bar from posting a 50%, 75%, or even a 10,000% auto-grat sign? Let's turn that $100 charge into a $1-million profit!

Hey drunk guy, pay off my morgage!

I agree. If you leave your card, you SHOULD have the intelligence not to show up when the bar is not in the weeds, but you left your card in the first place, so you're not firing on all cylinders to begin with.

I do think a 15 - 20% charge is fair for an abandoned tab, but as others have noted, I just don't know if it's legal.

Plus, the bartender working that night is most likely the one getting that tip, not the one who served the card-abandoner, unless of course the manager/closer "gets creative" with the accounting. We all know that creative accounting doesn't happen in the service industry, though.

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I guess I'm cash & carry sort of guy. I can't imagine ever, ever, leaving a credit card with a bartender except on occassion, for how long it took to ring a sale for a round. To me, it's just inviting trouble.

Trouble,

It's not by my logic, and I don't remember posting anything supporting the acceptability of 50%, 75% and 10,000% auto gratuities.

It would not be permissible to have a policy that is coercive, deceptive, or attempts to fraudulently bait the customer.

Additionally, a policy that's unusually unique as to industry standards could also pose problem if the establishment was forced to defend their policy, depending on the terms of the policy and the manner of execution.


It would be difficult to challenge 15-25% percent, as this has become an industry standard and has been interpreted as "fair and reasonable."


You may not like the answer, but a business that is challenged as to their policy would have ample examples and established case law to support their policy, providing their stipulated gratuity was within the scale of industry standards.

The burden of proof would rest on the complainant and they would have to evidence how and why the policy they are challenging is inherently unfair and unjust; which would be difficult to do, to say the least.

I hear where Mark Twain and some of the others are coming from.

But as they themselves have pointed out, up to 10-15 people sometimes do this on a Saturday night. So I think I'm with MtVernon gal on this—if only one person did it in a week, it would be a pain, but if this happens nightly, it's just a cost of doing business.

Deal with it, bartenders...or fix it.

If it's a) such a pain and b) so common, why haven't restaurants figured out a better way to handle left-behind cards? Or figured out a way to pay their employees/distribute tips that isn't dependent on every single card being closed out at the end of the night? Seriously, that's just stupid.

Most of these bars we're talking about are not Mom & Pop operations—they've got touch-screen registers, for God's sake. So surely they can figure out a way to flag a left-behind tab so that the night's books can be closed, the right servers and can be tipped, and everyone can get on with their lives—possibly with a 20% charge, but definitely without the attitude.

(I also don't buy that the tab is this wonderful convenience solely for us, the consumers. Sure it is, but it's easily equally so for the establishment—less trips to the register and less handling change means more people get served faster, thus more traffic and sales for the bar, and no one walks out without paying...eventually.)

Bob UU, Iway inkthay Iway aymay ovelay ouyay.

haha

Cheers to keeping me in Procrastinationville. Thanks, guys.

Here ya go...

LAKE GEORGE, N.Y. (AP) -- Humberto A. Taveras put his money where his
mouth is and ended up arrested, accused of leaving an inadequate tip
at a restaurant.

Taveras, 41, faces a misdemeanor charge of theft of services after he
and his fellow diners argued with Soprano's Italian and American Grill
managers over the legality of requiring an 18 percent tip for large
parties.

"They chased us down like a bunch of criminals," Taveras said. "It
killed our weekend."

Taveras and eight others had pizza at the restaurant in this resort
village Sunday night. He said they weren't completely satisfied with
the food and left a tip of under 10 percent. Taveras said they also
were not told of a mandatory 18 percent gratuity for parties of six or
more and did not see notice of it on their menus.

Restaurant owner Joe Soprano said all the menus have the notice, and
the waitress informed the group. He said he did not choose to pursue
charges because of the money, but because Taveras' group was
obnoxious.

"It's unfortunate it has come to this, but this guy was rude and
abrasive. They practically threw food at us," Soprano said.

Below are excerpts from a New York Supreme Court case regarding this issue. The court decided that mandatory gratuities are to be considered "service charges" and fair under New York law.

… Given the language, "any charge purported to be a gratuity" and the remedial nature of Labor Law § 196-d, such language should be liberally construed in favor of the
employees. Both the plain meaning of Labor Law § 196-d and its legislative history establish that the service charges at issue in this appeal are contemplated within Labor Law § 196-d.4 Even if the charge is mandatory, and not subject to negotiation, when a complaint asserts, as plaintiffs' complaint asserts here, that a service charge has been represented to the consumer as compensation to defendants' wait staff in lieu of the gratuity, such allegation is covered within the statutory language of Labor Law § 196-d."

...We agree with the Attorney General of the State of New York and the NYSDOL, charged with enforcing Labor Law § 196-d, that the standard under which a mandatory charge or fee is purported to be a gratuity should be weighed against the expectation of the reasonable customer as this standard is consistent with the purpose of Labor Law and industry practices.§ 196-d.

… We hold that the statutory language of Labor Law § 196-d can include mandatory charges when it is shown that employers represented or allowed its customers to believe that the charges were in fact gratuities for its employees.

-30-

Courts throughout the US have consistently ruled, these "tips" when uniformly mandated through individual restaurant policy and within general rules of industry practice, are to be interpreted as service charges, in lieu of gratuity, and must be paid to the employee absent of employer interference.

Therefore, the IRS position that a tip or gratuity cannot be mandated as per policy, but must be voluntary, only holds true absent of a uniform business policy and business practice. If the policy stipulates a mandatory fee uniformly (parties, groups, private events, etc.) the fee is to be interpreted as a service charge in lieu of gratuity, and therefore not subject to the IRS definition of tip/ gratuity.

In my opinion, language such as “20% Service Fee Added to All Parties of Six or More in Lieu of Gratuity.” While ultimately unnecessary, would provide an even greater layer of protection to the restaurant against potential claims for damages than language such as, “20% Gratuity Added to Parties of Six or More.”

Sam and all,

Here is our credit card policy at The Brewer's Art:

We will hold on to your card for a month or so, after which we destroy it. If someone is here during the day, they will happily return your card to you. If you call while one of the daytime people is in a meeting, they may not be able to check for you that very minute. However, with enough coordination, we can get you your card with no problems. Keep in mind that we are not open during the day, and that it is usually me, the brewers and a couple of prep cooks in the building. Only one or two of us will have access to the office during these hours. I am frequently off picking up supplies, going to the bank, etc. so I may not be able to get your card back to you at the exact moment when it would be ideal for you, but I will exercise every effort to be accommodating.

We do not add any gratuity, however, we will run the credit card for the total of your tab at the end of the night. I am surprised that the manager said "we expect a tip" because our system actually makes it practically impossible to add tips to credit cards at a later time, which both bartenders and managers know. Our policy is is to encourage guests who CHOOSE to tip to take care of their bartender on their next visit.

The only thing I will add is that we get about 10-15 cards a week, and while it is a huge emergency to the card owner, it is an added burden to us, who all have a ton to do here anyway. That said, I have left my card at places myself, and appreciated the courtesy of the folks who returned it to me (even those folks who did ad a gratuity).

Sam, if you could have your friend Ian contact me via email (volker at thebrewersart dot com), I can discuss the specifics of his situation further with him. I also welcome correspondence from anyone regarding the Brewer's Art.

Cheers,
Volker Stewart
Owner
Brewer's Art

As a former employee of the restaurant business, I understand the frustration and hassle it is to close out a tab from the night before (or even several nights before) and losing out on that tip. The only thing is that although many people do this out of total intoxication, some others may have reasons. I have left a tab open at a bar due to an emergency at home. When I went to settle up the next morning, trying to apologize, I still got a rude and nasty response from both the bartender and manager. Not everyone walks out because there were too drunk, so you can't group all walk-out people together (JackieO). Mistakes happen.

Also I agree with the post from Trouble - while a 15-20% gratuity (being industry standard) is totally acceptable to put on the card, how do you justify anything over that - to cover your "hassle"? If you allow patrons to pay with credit card, you have to deal with the drawbacks. If you can't deal with the inevitable walk-outs every week, run their credit card per order or have a cash-only business.

Jeez, from what I can read, there are some people who don't want to put up with serving people. They need to get another job. If a bartender closed my tab and added a gratuity and I did not sign the slip, I would simply contest the charge with my CC provider. In the absence of a signed slip, the business has no recourse. That being said. Why be a jerk, if you ever want to drink in that bar again, you damn well better pony up the dough and remember not to forget your plastic next time! Cheers.

Ok, this is getting good. There is a lot of case law regarding this and in summation, they all side against the restaurant, but in favor of the employees!

Here’s where this gets interesting. In every case I can find, the court decision regarding this matter is the result not of customers complaining about the mandated gratuity, but employees filing suit against their employers for withholding the mandated gratuity.

In each case, the employer has a policy which mandates a fixed percentage as gratuity for parties greater than a certain number. However, when it comes time to compensate the employees, the employer changes his/her position, and considers the gratuity to be a service fee, not applicable for payment to the employee. And it’s the restaurant/institution that takes the stance many have on the forum, “You can’t mandate or impose a tip!”

Therefore, in each case, the plaintiff is a labor organization, or defacto entity filing against the restaurant/institution on behalf of its employees, claiming that the institution is mandating a gratuity, and even if considered a service charge by the court, the intention of patron leaving the service charge, is that of a tip/gratuity and it should be paid to the employee.

In each case, the courts have ruled their opinion in favor of the Plaintiff [employees], thus creating case law that allows for mandated and automatic service charges, expressed in the form of gratuity.

Interestingly, these decisions and opinions could have easily been the opposite. Had the restaurants in these individual cases not withheld the tips from their employees, and action was taken not by employees but customers of the restaurant not wanting to the pay the fees, the courts may have ruled against the restaurant, in favor of the consumer. However, this isn’t the case. Labor unions representing employees stressed the court as to the importance of these fees for the survival of the employees and the courts have agreed.

Moreover, in Arnel Samiento, et al –vs- World Yacht, Inc. et al., which made its way all the way to the Supreme Court of New York, Plaintiff argued that mandating gratuity is in violation of General Business Law and is an unfair and illegal business practice.

The court decision reads as follows, “Turning to plaintiffs' second cause of action alleging
That World Yacht engaged in deceptive consumer practices under General Business Law § 349, we conclude that it was properly dismissed. In order to assert a prima facie cause of action under General Business Law § 349, a plaintiff must be able to establish that a defendant intended to deceive its customers to the customer's detriment and was successful in doing so. "[P]roof that a material deceptive act or practice caused actual, although not necessarily pecuniary, harm is required to impose compensatory damages" (Small v Lorillard Tobacco Co., 94 NY2d 43, 55-56 [1999][internal quotation marks and citations omitted]).

Since plaintiffs here cannot show how World Yacht's customers suffered a detriment by agreeing to pay the service charges, the automatic gratuities, or the added gratuities, plaintiffs failed to establish a prima facie claim under General Business Law § 349 and therefore plaintiffs' second cause of action was properly dismissed.

As to plaintiffs' third cause of action for unjust enrichment, this action does not lie as plaintiffs have an adequate remedy at law and therefore this claim was likewise properly dismissed. We have reviewed all other arguments and find them without merit.

Accordingly, the Appellate Division's order should be modified, without costs, by reinstating plaintiffs' first cause of action and, as so modified affirmed. The certified question should be answered in the negative.”

----
The above court decision would make it near impossible for anyone in New York (or any jurisdiction/judge/arbitrator that places weight on New York Judicial opinions and decisions) to take action against mandated gratuity absent of unique and extenuating circumstances such as fraud or deceptive practice, and the bourdon of proof would rest on the Plaintiff.

The courts have inserted themselves into this debate and taken a very assertive position exercising their opinion. And their opinion places greater value on ensuring these fees and charges reach the employee, than ensuring the customer retains free will when factoring and paying gratuity.

Should a case be brought forth the court of a jurisdiction absent of specific judicial opinion, legislation or law, cases such as the one referenced above would be undoubtedly used as a defense for the restaurant imposing such fees, and the restaurant would prevail.

I prefer what Nottingham's in Columbia does; they do an authorization for $75 and promptly give you your card right back. This policy is posted at both ends of the bar.
BTW, come see Fools & Horses this Friday at Nottingham's!

Isn't the main issue solved with the systems where your card information is saved then returned back to you when you originally open a tab?

They could even print out a little receipt that says "Subject to 20% gratuity if you don't return to close out this tab" to give you when you get your card back.

I love the Bourbon of Proof! Saying the restaurant would prevail is presumptuous though. The door is open for the consumer since the case law native to another state doesn't accurately reflect the consumer v. restaurant scenario.

Anyhoo, it's all a game of what is reasonable and who wants to go through the trouble of disputing what is and what isn't. In summary, I crave the Brewer's Art Steak Frites and miss the Peppercorn Tripel.

CantonKate: don't encourage me :D

Gratuities, let’s call them what they really have been bastardized into in too many cases, a tax. It’s supposed to be a gift or reward for superior service. Since the opinion has been taken way by the bar or restaurant in question, it no longer is.

"Subject to 20% gratuity if you don't return to close out this tab" really should read, "Subject to 20% penalty if you don't return to close out this tab"

So much one-sided game playing and hypocrisy in all this really sours the whole experience of going to relax and enjoying yourself.
It sounds like every time you go somewhere you should get handed a contract or EULA of terms and conditions when you come through the door, since your obligated to play by the house rules.

Bob,

I have to disagree that I'm being presumptuous. It's called "Fruit of the Poisonous Tree" and I'm sure you're familiar with the phrase.

A court can't rule how to process and dispense these "mandatory gratuities" if the gratuities themselves are not legal and permissible. Had the court decided the restaurant institution was in violating the rights’ of the consumer by charging the fees, they could not allow the fees to be dispersed to the employees, as it would be considered fruit of the poisonous tree.

Absent of this common law understanding, in this particular case, plaintiff argued two positions:

1) The service charges are gratuities and must be passed to the employees, not retained by the collecting institution.

2) The restaurant can not mandate gratuities, as they can not force a consumer to tip a certain amount.

The court decided in favor of the first argument, and dismissed the second argument finding it without merit.

As far as I'm concerned, the verdict is in when it comes to mandatory tipping when applied in a uniform manner.

Now, charging it automatically to a credit card is another issue all together.


Bob,

As a side note, I'm just arguing that as a general rule, the restaurant would most likely prevail absent of extenuating circumstances.

Obviously, the restaurant would have to decide the merits of each individual tab, when exercising their right to enforce their policy.

Depending on the situation, it may not be in the restaurant's best interest to enforce their own policy, especially from a customer relations perspective.

This really becomes an issue (adding gratuity) with private party rentals, banquets, etc. This, in my opinion, is when the automatic gratuity is most important.

In Maryland, bartenders and servers get a fraction of minimum wage; they work for tips. In DC, many bartenders get no hourly pay, they rely 100% on tips.

Are we missing the point, a bartender who does not know who is coming and who is going is not doing a good job. They are merely order takers and don't deserve any gratuity at all. We should just get a machine to dispense our beverages. When I was a bar manager and one of my employees brought me an unsigned, un-tipped tab I refused to honor it. There is a complacency regarding ridiculously bad service here and Baltimore and this is simply a symptom of this.

Mark Twain,

An added gratuity is charge, call it such. Calling a it gratuity probably introduces a degree of irritation to what's supposed to an expression of appreciation is imposed by the biller/seller not offerred by the customer. I think that people would be more accepting of calling it an added service charge than calling it a gratuity.
Rather like use of the term "free gift"
1) if it's truly a gift, it's free
2) if you have to buy something, it isn't a gift or free, it's an incentive, rebate, or bribe.

"In Maryland, bartenders and servers get a fraction of minimum wage; they work for tips. In DC, many bartenders get no hourly pay, they rely 100% on tips."
What a crappy job to have, to have to depend on the largess of the customer. No wonder there is all this adding gratuity bullsh*t.

"We should just get a machine to dispense our beverages."
It may lack personal warmth but it would be a honest upfront and uncomplicated billing.

GDA,

I think your 100% correct regarding the phrasing.

Actually, the lack of minimum wage in DC doesn't seem to be a big issue. My bartenders would walk on a Friday or Saturday night, on average, with somewhere between $500-800 depending on which bar and which section they were working. Every now and again, they could make upwards of a grand if it was a larger, bottle service party.

I had two servers who worked the VIP room who lived in Baltimore. They would take the train down early on Saturday and stay in a hotel. It was cost effective and they would walk with a lot more than picking up a shift in Baltimore.

Drink prices are higher, and in the instance, were talking about a four story nightclub with 800 occupancy.

I don't think it's a uniform policy not to pay minimum wage in DC, I've only seen this done at very large nightclubs.

Moondoggy, I can't imagine how two bartenders in the basement bar of Brewers Art on a Saturday night, for instance, could possibly be expected to keep track of everyone. That place gets packed, and so many people there smoke, so they are consistently in and out.

I for one would not be happy with the service if the bartender was chasing me down every time I stepped outside for a smoke or went down the hall to the bathroom. I'm sure people loved working for you.

Queen hit the nail on the head...as a co-worker of the Queen and the weekend morning bartender, I would say about half the people that come up to the bar before 3pm are looking for their creditcard. It gets old and its so annoying. Your lucky we dont toss your card in the trash. Be responsible enough to either pay cash up front or get your damn credit card before you leave the damn bar!

the "added gratuity" was originally designed by restaurant owners (at least in the 2 restaurants i was working at the time) to make sure the servers were tipped at least the proper amount by large parties as this seemed to be a problem back in the late 60's early 70's (only time i can speak for certainty since thats when i worked in restaurants)
it seems that $10 or $12 dollars was enough (from the customers point of view) for a $250-$300 bill (in the 70's this was a medium to large party) and the servers rapidly got tired of working so hard and getting next to nothing as a tip. they were being paid $1.50 / hr at the time.
it now seems to have morffed into a "charge" as GDA puts it and part of that "take" on it is the fact that most people now realize an 18-20% gratuity is the norm and that its for good service. making a gratuity mandatory takes the ability of the customer to reward the server, or actually penalize the server for inferior service.
given the general feeling that baltimore servers (The Queen excepted, of course) are...um...difficult (judging by the posts i've read over the past year since i'm not in baltimore much) i can really understand the bad feeling towards a mandatory gratuity.

i've had this happen at brewers art and daugherty's. bartenders were cool about it both times and smiled when i returned.

careful, ss2, you're dating yourself ...

I just wanted to clarify one thing. While I do sometimes (and just sometimes) get annoyed by people picking up their credit cards its really not a big deal. We appreciate you spending your money there. And it is my job. As stated above my only complaint was the timing of picking up the card. But if that is out of your control then so be it. Its all good. I'm a lover not a fighter.
Go RAVENS!

I'm from Maryland, and I came across this article looking up some info about this subject because something quite strange just happened to me in Madison, WI.

I'm completely fine with having a gratuity charged onto my credit card if I leave it at a bar. I happen to do it a few times a year, and it's never really been a big deal. However I left a card at a bar here on a Friday, when I went back on Monday I was told that my card had been destroyed. The bartender, who admittedly didn't come up with the policy herself said it had something to do with a liability, so no one else could put fraudulent charges on my card. However is that risk so great at your establishment that you have to destroy my card? I can't possibly see how that is in any way legal.

You should never leave your card any where and expect others to take honest care of it. It was irresponsible and also annoying to the bartenders and managers. I hate people who go out and expect the bartenders and servers to work for free. They are tipped workers who served you and they need to be payed ! They are at work. $1 is not a tip ...if u have a tab and you leave with out closing it they should tag it a big 25% for your stupidity and annoyance and having to wait days for there money

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About Erik Maza
Erik Maza is a features reporter at the Baltimore Sun. He writes for several sections of the Sun paper and contributes weekly columns on music and nightlife. He also writes and edits the Midnight Sun blog. He often covers entertainment, business, and the business of entertainment. Occasionally, he writes about Four Loko, The Block, the liquor board, and those who practice "simulated sex with a potted palm tree." Before The Sun, he was a reporter at the Miami New Times. He's also written for Miami magazine, the Orlando Sentinel, the Sarasota Herald Tribune and the Gainesville Sun. Got tips? Gripes? Pitches? He's reachable at erik.maza@baltsun.com. Click here to keep up with the dumb music he's listening to.

Midnight Sun covers Baltimore music, live entertainment, and nightlife news. On the blog, you'll find, among other things, concert announcements, breaking news, bars closings and openings, up-to-date coverage of crime in nightlife, new music, round-the-clock coverage of Virgin Mobile FreeFest, handy guides on bars staying open past 2 a.m. on New Year's Eve and those that carry Natty Boh on draft. Recurring features include seven-day nightlife guides, Concert News, guest reviews of bars and concerts, Wednesday Corkboard, and photo galleries, as well as reader-submitted photos. Thanks for reading.
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