I can speak for the hospitality industry and it is simple. It makes the price LOWER. We used to have a rate that came out to exaclty 59.00 with tax. I was told NEVER give that. Always give without tax.
The agents are instructed NEVER give the total amount they say $159.00 plust 14.9% tax.
It is kind of like eBay. a 99¢ CD is great till it comes with a $3.95 delivery charge. Yeah right. now it is 4.94. Not so great eh?
It wouldn’t be hard to calculate the full price now a day with computers. Save for the potato chips which have 99¢ printed on them.
But we rarely have to do that either!
In most European countries restaurant service is concidered part of the price, and tipping is (almost) only done to acknowledge service that was beyond what might reasonably be expected. (Or just to get rid of random change.)
I was very confused the first few times I ate out in the states, but thankfully I had read in the guidebooks that one was supposed to add a significant amount in tip.
To me that seemed insane, and my first reaction was: Why should I have to pay for that person to do what he/she is employed / payed to do!?
By now I realise that thart’s the way the americans prefer it, but I do prefer the European way of paying whatever it says on the price tag.
Don’t apologise, no offense taken: it was for about 3 months when I was a student in '91, so a fiver went a bit further then than it does now. I paid my rent in advance, but the bank refused to loan me more money, and I didn’t qualify for benefits - so I had to eke out what was left of my overdraft. I busked, and became adept at stealing food (though I did lose about 20lbs and get a stomach ulcer).
That’s right. One of the big new things in retail is price optimization, where not only might the retailer have a different price in every state, but in every store. If they can handle that, they could certainly handle having to update prices every time a tax rate changes.
