A customer's observation of a suggested tip on an Applebee's bill has brought attention to how restaurants calculate suggested gratuities. The customer shared a TikTok video detailing how the payment kiosk suggested an $11.30 tip on a $49.49 bill. A standard 20% tip on the subtotal would amount to $9.90.
The apparent discrepancy, according to the video, is that the kiosk calculated the suggested tip on the after-tax total of $56.50, rather than the pre-tax subtotal. The payment screen reportedly indicated that tips were calculated after tax and before discounts.
Robert Mahon, managing partner of Mahon Hospitality Group, stated that restaurants generally have control over how their payment systems calculate suggested gratuities. "The systems come with default settings, but the restaurant can usually change them," Mahon said, adding that his establishment uses Toast, which defaults to calculating tips before tax but has an option to switch this setting.
Mahon expressed his view that gratuities should be based on the pre-tax amount, as customers are tipping for food, drinks, and service. "Adding tax into that calculation doesn't really make sense to me," he commented. He also emphasized the importance of transparency, stating, "The main thing is being clear. If someone hits 20%, they should know what they're leaving 20% on."
This incident follows similar customer questions raised about tipping practices at other restaurant chains, including Dave & Buster's, where suggested gratuities also appeared to be calculated on after-tax totals. The situation underscores the importance for consumers to review the basis of suggested tips before finalizing payment.