In September 2017, a Cheesecake Factory customer in California received a check that presented misleading and exaggerated tip suggestions.
On 18 September 2017, Facebook user Mike Abreu posted what he presented as a photograph of a restaurant check receipt from his recent visit to a Cheesecake Factory outlet in Valencia, California, that appeared to offer some misleading and exaggerated tip amount suggestions:
When the bill finally returned I noted it it was $33.76 total. Right above where you fill in the tip and total was the tipping guide which prefigures your percentage based on your total bill. I personally am a fan of this feature as I don’t like figuring percentages on and odd amount so I normally just go with what they put for 20%. So I began to write in $14.71 as it stated was 20 percent of my bill.
My wife then asked how much was the bill and I replied almost $50 with the tip. She then said that’s pretty expensive for two iced teas and two apps. I looked at the bill again and saw $33.76 which was correct but then I realized that 20 percent of that should be $6.75 and not $14.71 (more than double) that was printed on my bill.
The credit card receipt is authentic. Abreu (who goes by “Frank”) brandished an identical-looking slip during an interview with Los Angeles television station KCAL, along with an itemized receipt showing the same total cost ($33.76 including sales tax) but accurate tip suggestions (20% of the bill as $6.75, for example). The
date and server’s name on that receipt were both the same as the credit card slip featured in Abreu’s Facebook post.
A spokesperson for the Cheesecake Factory told us that the discrepancy was caused by an error resulting from a staff member’s mistakenly processing the Abreus’ order along with someone else’s, yielding a larger total that was then used as the basis for the tip suggestions presented in each check:
The receipt does not accurately reflect the transaction. The suggested gratuity calculation resulted from inadvertently combining two unrelated parties’ checks. We deeply apologize for the mistake.
It would appear that the staff member corrected the error in the itemized receipt, leaving accurate tip suggestions there, but processed the credit card payment as if it were part of the erroneous “split bill,” creating the inaccurate tip suggestions there. (If the combined cost of the two bills were $73.55, for example, then $14.71 would have been an accurate suggested amount for a 20% tip.)
The practice of presenting tip suggestions based a whole table’s order, in each separate receipt after a bill is split, is controversial. The Cheesecake Factory is currently being sued in Los Angeles Superior Court for allegedly presenting tip suggestions misleadingly based on percentages of a whole table’s bill, in instances where diners split checks:
The Cheesecake Factory … [when a table] uses two or more credit or debit cards to pay for the charges, the combined bill is divided between the credit/debit cards and Defendant presents each diner/consumer with a separate sales draft for a portion of the bill (a “split bill”). On each of the sales drafts, Defendant includes suggested gratuity amounts to facilitate customers in calculating and leaving a gratuity for service. Defendant represents the suggested gratuity to be 15%, 18%, 20% or 22% of the check amount reflected on the sales draft, but, in reality, it calculates the suggested gratuity on the combined bill and the suggested gratuity amounts are actually 30%, 36%, 40%, or 44% of the amounts shown on the separate sales drafts.
When customers use credit or debit cards to settle their dining bill, Defendant provides them with sales drafts that contain suggested gratuity amounts, and when Defendant divides the total bill between two or more credit/debit cards, the sales drafts contain suggested gratuity amounts which do not accurately represent the total of each sales draft. Plaintiff estimates that over 80% of restaurant charges are paid by credit or debit cards and that approximately 10% or more of those charges (which represents many thousands of consumers) are divided between two or more credit/debit cards and are affected by The Cheesecake Factory’s wrongful suggested gratuity practices.
The case has the potential to become a class action lawsuit. An initial status conference is scheduled for 18 October 2017.