Can I change the amount of a forced gratuity?

Factual Questions
1

Let’s say I use an online certificate to get $25 off of a meal. The certificate terms state that a 20% gratuity is automatically added. If I am given poor service, and I choose to give less than 20%, am I breaking any laws?

The reason why it seems like I could be breaking a law is because I agreed to the terms in virtue of dining there, so by changing the gratuity amount, I am, in a sense, “dining and dashing”: even if I pay the rest of the bill as expected, I am not paying for a service that I ordered.

However, it seems that I shouldn’t be forced to pay a specific percentage if the service doesn’t warrant it (it is a gratuity after all). If I change the amount of the gratuity on my credit card slip and sign it, and then the restaurant charges the original amount anyway (with the original 20% tip), have they broken the law by charging me for something that I didn’t sign for?

I used a credit card in this situation, but if I had paid the whole check in cash, minus the amount I didn’t want to tip, is the legality of my actions clearer?

Is anybody breaking the law here, or is this merely a customer service issue? I know I can dispute the credit card charge with my bank, and I have, to try to get it adjusted to the amount I did want to pay.

2

IANAL. They may or may not have broken the law, but they have certainly broken the terms of their contract with the credit card company. Even if you put $5 on your card for the total amount and then skipped out on the rest of the bill, they can’t charge your credit card more. You’d be breaking the law, but you knew that already.

With regards to changing the amount of the “contracted” tip %… I don’t know what the legal status is with that.

3

If it’s an automatic additional amount, then it’s not optional. If you fail to pay the required amount, the restaurant could take you to court (Promise them plenty of publicity). AFAIK they cannot monkey with the amount you signed on the credit card, but usually the credit card slip is a take it or leave it proposition if the amount is already on there. Sign or skip on the bill.

If they left it an optional blank line (did not include it in the total) then it isn’t mandatory, is it? In that case, you are obviously entitled to fill in whatever you want for whatever reason you want.

If you’re that pissed off, make a scene and complain. That’s what the judge would tell you - if you have a problem with the bill, take it up with the manager there and then. If you are unwilling to make a scene when you think you are right - pay the bill.

4

A pub in Bethlehem, Pennsylvania attempted to have two college students arrested last November when they refused to pay a forced gratuity, allegedly because the service was so awful. They were arrested and handcuffed but the police eventually withdrew charges. Here’s a story on the decision to withdraw charges and if you google you can find lot’s of information on it.

5

I believe the local prosecuting attorney withdrew the charges. Police arrest. The DA prosecutes, or in this case, declined to prosecute.

6

I like the quote

“Unusual is not the word for it,” said Patrick Conway, president of the Pennsylvania Restaurant Association, of which Lehigh Pub is not a member. “It may be unprecedented.”

7

I think your best recourse in this situation would be to speak to the manager. Explain that you are aware of the “automatic” 20% gratuity, but you feel the service was so bad you don’t feel comfortable paying that amount. Chances are that the manager will remove the gratuity and try to resolve the issue with you.

8

If the “gratuity” is “automatic” then it’s not a “gratuity” but instead a “service charge”

9

Nope!

10

I’ve worked in hotels and been the unfortunate MOD (Manager on Duty) when this has happened.

For things like banquets and such, there is an automatic “server charge” and that I’ve never known to be disputed. Because it’s all negotiated far in advance. As an asst controller, I’ve had lots of people who held banquets come back and say they don’t want to pay the tip out at a later date.

It’s not really so much a big deal at least at the hotels I worked at. If you complain, I’ve never known any time we didn’t give amount off. There is simply too much competition to fight this. If I as an asst controller tried to enforce it, the director of sales would be on the phone screaming "They’ll just take future business to another hotel. And they would.

Also unions play a big thing in this. Automatic tips are touchy with unions and they will scream bloody murder. If somoene doesn’t want to pay the say 20% auto gratuity, we would adust the bill so the servers don’t get stiffed. In other words we’d knock back the gratuity and do journal entries so the servers still get 20% and the food would take the hit.

Could you dispute the charge? Of course and this is your right, this is why I use credit cards.

The dispute would then depend on how you set up your system. In places where I was the asst controller, for large amounts, say over $500 or so, I would have the servers do a two system, which was one signature above the tip and one below it.

The credit card would look like one charge but would be processed seperately. For example, I would have a $500 check with a $100.00 tip processed in two seperate charges and it would appear as $500.00 food and $100.00 tip.

The customer gets a credit card slip saying $600.00 but if they customer then disputes the charge he can only dispute the $100.00 not the $600.00 total

Most people don’t realize but everytime you dispute a charge it costs money to the company whether you win or not. For instance, the last hotel (2 years ago) place I was asst controller in, our charge cards (AX, MC, Visa, Discover, JCB, Diners) were processed by Bank of America and BoA charged $25.00 for each dispute. And even if we won the dispute it would cost us $25.00 it would cost money.

So you can see the hotels and resturants need to be aware. It’s more money to let a customer dispute a charge than to just write it off.

Banquets tend to be different as you pay attrition on a whole, so tips and auto charges don’t matter. For instance, if a banquet is due in for $10,000 and comes in less, there is a fee for spending less than you budgeted. So if you write off gratuities, it makes the banquet worth less and the customer ends up with higher attrition.

In the OP case, I’d call up the resturant and explain, this are my terms and if you don’t comply I’ll dispute the charge. They will most likely work something out with you as they don’t want to pay the charge for the cc dispute charge.