The Restaurant Discount Scams

Discussion in 'General Discussion | Dining' started by Jim, Feb 8, 2011.  |  Print Topic

  1. Jim
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    Jim Silver Member

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    We had a $50 off coupon for an Atlanta Restaurant and this was the break out.

    Gross Bill
    $100.00
    Mandatory Gratuity of 18%
    $18.00
    State and local sales Tax 8%
    $8.00

    $126 + $20.00 (cost of $50.00 Coupon)
    Real Cost = $146.00 - $50.00 Discount is $96.00

    Not such a good deal after the waitress explained that the 18% went to the house as a handling fee and she got nothing. :oops:

    As others have subsequently pointed out, not all are this kind of deal, the point of this thread was buyer, beware. Read the fine print.
     
  2. Sweet Willie
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    Sweet Willie Gold Member

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    was this 18% mandatory tip printed on the coupon? Could you have left the tip for the waitress in cash so that the house didn't take?

    We just used a restaurant.com $25 cert (paid $2) at a place, there was a mandatory tip already calculated, service was not good at all so the tip was reduced by me. He was not happy & asked why so I let him know in a constructive manner.
     
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  3. Jim
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    Jim Silver Member

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    Yes it was, in small print. Where they get you is by charging 18% on the gross and sales tax on the Gross. Then many of them will exclude alcohol as an eligible charge.

    I have done the last of these "deals"
     
  4. Mike1625
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    Mike1625 Silver Member

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    Important tip too, you can really hit these hard, first have a 80/90% off promo code (the 90's are rare, but do really happen) .... then buy through a milage mall, restaurant.com gives 18 miles per dollar in the AA milage mall.(and use a mile earning credit card) .... then go to a place you picked because it was an idine place offering 3-5 miles per dollar (plus possible bonuses) and pay your check with a mile earning credit card. wheh, that was work typing.[/quote]
     
  5. The Missy
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    The Missy Silver Member

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    I'm confused by your math...

    Wouldnt your real cost be $126 - 50 + 20 = $96 ??
     
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  6. rajuabju
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    rajuabju Gold Member

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    The house took the 18% gratuity? Wow thats nuts.

    I use restaurant.com coupons all the time, great value, and at least for those, never heard of the restaurant taking the gratuity thats included.
     
  7. Flyer_Esq
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    Flyer_Esq Silver Member

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    I haven't had any problems yet with Groupon/Living Social/Restaurant.com coupons, but I always read the fine print before I buy, and I typically check out the menu and Yelp beforehand so that I know how much the meal will really cost.
     
  8. swag
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    swag Silver Member

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    I'm not a fan of tips being added automatically, but in this case, it makes sense. The waitstaff does the same work on a $100 tab with a $50 coupon as they do if you don't have the coupon. But far too many customers would tip based on the post-discount total, and that's unfair to the servers.

    I assume basing the tax on the pre-discount total is state law. In some places, like my state of TX, the alcohol exclusion on these deals is also by law.
     
  9. wanderlust
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    wanderlust Silver Member

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    Based on what the waitress and OP said, it seemed to be more of a mandatory service charge than a tip, meaning the restaurant, at its discretion, could give any amount to the waitress, or none at all. I think mandatory tips are acceptable in some circumstances (e.g., large parties), but "service charges" irk me to no end. If it was a normal mandatory tip/gratuity, I'm not sure the restaurant can legally keep it away from the waitress though. I'm not sure of course.
     
  10. bluesky
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    bluesky Gold Member

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    I'm pretty sure it can't be withheld. The NYT ran a series a few months back about restaurants being subjected to lawsuits by waitstaff, and action from the IRS, due to failing to properly distribute tips.

    http://www.nytimes.com/2011/01/03/nyregion/03tips.html

    I'm not sure this is a scam. At first blush it looks sketchy, but then what's the alternative? If it was a paid coupon, it's really more like a gift certificate - and you have to pay sales tax there. And the 18% gratuity being added automatically is reasonable, I guess, as long as you were advised before you ordered. Them not paying their waitstaff is an entirely different matter - and it's appalling - but that's not really the issue that the OP is complaining about.
     
  11. Jim
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    Jim Silver Member

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    Yes, that was the net cost. I forgot to deduct the "value" of the $50.00 coupon.
    In any event, you catch my drift, not really worth it.
     
  12. Jim
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    Jim Silver Member

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    The thing that raises eyebrows with me is application of the sales tax to the gross amount. I would bet that they only report the portion of the net bill, not the gross amount.
     
  13. bluesky
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    bluesky Gold Member

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    Possibly. It depends on the nature of the coupon, I guess.
     
  14. Jaimito Cartero
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    Jaimito Cartero Silver Member

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    I've run into this same thing a few times. It's why I generally don't use a lot of Groupons for restaurants. I know the first one that I ever used was at a small Japanese restaurant that I had wanted to try. I think it was $5 for a $10 credit. I got a couple and my daughter and I tried it out. Simple food, but nice. I asked the lady how the Groupon sales were going and she rolled her eyes a bit. I guess they sold a lot of them. She explained that out the $5, they got $2.30 or so.
     
  15. Jim
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    Jim Silver Member

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    you are correct, possibly.... the point of this discussion was to be leery and PAY ATTENTION to the details.
     
  16. techgirl
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    techgirl Milepoint Guide

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    I've been fairly leery of some GroupOns with restaurants because it seems like here, a lot of the restaurants offering them are ones that I already know to be hanging on by a thread. (Hang out around those in the know a lot and you find out a wealth of information on who isn't paying their vendors, is overextended on credit, or has been conveniently delaying payment of credit card tips to servers in an attempt to improve cash flow.) I've not wanted to have the risk of getting stuck with a certificate to a restaurant that is shuttered.

    My rule of thumb is to only buy certificates for businesses I would frequent anyway without a coupon - or have been on the verge of trying - and that way I don't have to worry about "worth it" or not.

    I will definitely make a note in the future to find out how the gratuity is being distributed to my server to make certain things are fair.
     
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  17. Flyer_Esq
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    Flyer_Esq Silver Member

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    This is what the cell phone companies do in CA when you purchase a cell phone. If the "regular retail price" is $400, but you get it for $99 because you enter into a two year contract, you still have to pay taxes on the full regular retail price. I've learned to buy my cell phone out of state because it doesn't work this way in most other states.
     
  18. Tkey
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    Tkey Silver Member

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    Wow. That's crazy.

    Then again, so is CA. [​IMG]
     
  19. Bobofoosh
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    Bobofoosh Silver Member

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    Same here. I stock up when it's a restaurant I go to once a month anyway. Otherwise I'm leary unless it's a place I was already planning on trying.

    On another note I fully support the tip being calculated on the pre-coupon bill.
     
  20. bluesky
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    bluesky Gold Member

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    Is this what the class action is about?
     
  21. ArizonaGuy
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    ArizonaGuy Silver Member

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    See bolding mine. That's what he said. He just wrote it differently. His out of pocket cost: $76 to the restaurant, $20 to the coupon site and actually a bit more based on whatever he tipped the waitress after learning the 18% mandatory gratuity didn't go to her.

    If gratuity is mandatory on any bill then it's not a gratuity. It's a tax imposed by the business. Unfortunately I rarely have cash on me otherwise I would do what someone else suggested and pay the gratuity directly to the help in cash. Whether it goes to my waiter/waitress or a communal tip car to be split amongst all the help is up to the establishment.
     
  22. Flyer_Esq
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    Flyer_Esq Silver Member

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    Yep. And with the regular price of phones so inflated (sometimes $599) and sales tax rates so high (8.75%), it can add up quickly.

    Although, I suppose it is a small price to pay for the 70 degree weather year round! [​IMG]
     
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  23. chemist562
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    chemist562 In Memorian

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    The one good thing about Calif (CA) is the certs don't expire. (1 yr expiration except CA) I bought several when it was 90% off ($1 for a $25 off cert) for a restaurant in 2006. At the time, the cert was $25 off min $35 purchase. Now, they certs say $25 off $45 min purchase. Wished I'd bought more of the old certs back in 2006.
     
  24. violist
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    violist Gold Member

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    Methinks that's not what was said in the original unedited post.
     
  25. violist
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    violist Gold Member

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    Hey, is chemist562 the former chemist661?
     

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