Australian Eateries Turn To Automatic Tipping as Cost of Doing Business Climbs (abc.net.au) 111
Australian restaurants facing a mounting cost-of-doing-business crisis are turning to automatic service charges as a way to shore up revenue. The practice is legal under Australian consumer law as long as customers are notified beforehand and can opt out, but it risks alienating diners in a country where tipping has traditionally been optional.
Wes Lambert, chief executive of the Australian Cafe and Restaurant Association, said only a handful of businesses in central business districts currently add automatic tips to bills, but the practice may spread as cost pressures continue. Automatic tipping is more common at venues frequented by international tourists, who view the practice as normal rather than exceptional. With international tourism now near pre-COVID levels, Lambert expects more restaurants to include tips on bills by default.
A Sydney wine bar recently abandoned its 10 per cent automatic tip after a diner's social media post triggered public backlash. University of New South Wales professor Rob Nichols said Australia's resistance to tipping stems from the expectation that hospitality workers earn at least minimum wage, unlike in the United States where tips constitute most of a server's income. Australians and tourists tip an estimated $3.5 billion annually, and tipping transactions grew 13% year over year in fiscal 2024-25.
Wes Lambert, chief executive of the Australian Cafe and Restaurant Association, said only a handful of businesses in central business districts currently add automatic tips to bills, but the practice may spread as cost pressures continue. Automatic tipping is more common at venues frequented by international tourists, who view the practice as normal rather than exceptional. With international tourism now near pre-COVID levels, Lambert expects more restaurants to include tips on bills by default.
A Sydney wine bar recently abandoned its 10 per cent automatic tip after a diner's social media post triggered public backlash. University of New South Wales professor Rob Nichols said Australia's resistance to tipping stems from the expectation that hospitality workers earn at least minimum wage, unlike in the United States where tips constitute most of a server's income. Australians and tourists tip an estimated $3.5 billion annually, and tipping transactions grew 13% year over year in fiscal 2024-25.
Re:Automatic reaction... (Score:5, Insightful)
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Re:Automatic reaction... (Score:4, Insightful)
I hate tipping culture. That said, having lived in AU/NZ for four years, American table service is far superior in every possible way. So .. there are tradeoffs. Increasing the cost of the meal doesn't increase the wages of the worker. In countries with tipping culture, you decide how much additional goes to the server ... which is kinda neat when you think about it.
I think there is a case to be made for Japan table service being superior to American table service. With no tipping required.
And how genuine is a smile or cheerful banter from a waiter anyway, when it is given because of an anticipated tip?
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I hate tipping culture. That said, having lived in AU/NZ for four years, American table service is far superior in every possible way. So .. there are tradeoffs. Increasing the cost of the meal doesn't increase the wages of the worker. In countries with tipping culture, you decide how much additional goes to the server ... which is kinda neat when you think about it.
I think there is a case to be made for Japan table service being superior to American table service. With no tipping required.
And how genuine is a smile or cheerful banter from a waiter anyway, when it is given because of an anticipated tip?
That's the thing with service in Australia and the UK (and much of western Europe)... The customer is equal to the wait staff, so the service you get is generally reciprocal to the way you treat them. If you swagger around like King Dick, treating wait staff as if they're serfs that are beneath you, is there any question why those people get bad service. If you are nice to your waiter/waitress, a mere hi, please and thank you, you tend to get good service. I've rarely had a problem with the service I've got
Re: Automatic reaction... (Score:2)
And how genuine is a smile or cheerful banter from a waiter anyway, when it is given because of an anticipated tip?
They are bringing you your food/drink, how 'genuine' does their smile or banter need to be?
Do un-tipped Japanese wait staff smile and engage in cheerful banter just as much as tipped US wait staff? I suspect not, since it won't impact their no-tip paycheck.
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You assume the service difference is because of tipping?
It also exists in sectors where there is no tipping in the US.
Do people really feel like they have to do a performance review after every meal? And then set a tip in accordance? That sounds very stressful.
Or do they just add a fixed amount every time?
I much prefer it when the menu tells me the price I will actually pay. Its a wonder US restaurants are not adding fuel surcharges, and rent contributions.
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American table service is far superior in every possible way
If you want to chat up the waiter, go to a bar. Restaurants are about food, company and atmosphere. The most ideal table service is one where people are not involved.
Okay maybe not quite, but I have to say I fucking HATE American table service. I want to enjoy my meal, not be hovered over by a stranger. I want to finish chewing before I have someone reach over and grab my plate asking me if I enjoyed the meal. And above all STOP FUCKING RUSHING ME.
I've seen Americans come to Europe and get the shakes at the
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Sometimes I'll do it that way, sometimes I put it on the credit line. However, there's one chain of coffee shops where I'll always put the cash on the table, because the lowest tip percentage available is more that I think is proper for a tip except for extraordinary circumstances.
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All businesses should pay wages and charge prices inclusive of all their costs. Tipping culture is a shit solution
...and I will sometimes not tip if the service wasn't above average (or I wasn't a problem customer
So, your first point is absolutely spot-on. But, knowing that tipping is allowed to be considered as part of a server's pay so that there actual wages are well below minimum, knowing this is a huge, widely-spread problem, you still feel entitled to choose not to tip? And shit, not just for bad service but service that "wasn't above average"? You feel entitled to decide on a whim that maybe your server doesn't have enough to cover their car payment that month?
The system sucks, it's completely broken. But f
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Re: Automatic reaction... (Score:2)
in the last 20 years, taking orders at mcdonalds has become a career.
Tell me you haven't been inside a McDonald's in the last few years without saying so.
That 'career' is taking a back seat to 'ordering in the app' or at the kiosks.
Re:Automatic reaction... (Score:4, Informative)
I --always-- put $0 and then put cash on the table or in the card-folio. Why? Because then the waiter gets to determine how the tip is managed
This is not the legal position in Australia. It's the right of the employer to set policy on how tips are handled. In many venues, staff can keep their cash tips and in others they'll be pooled and shared between the staff, but a business can also require that all tips, cash and electronic, go to the business itself. Of course there's the practical issue that staff can fairly easily pocket cash without anyone finding out, but being caught is a serious matter.
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That means for a 10% increase in price, you have a subsequent 22.7% decrease in sales.
In the US, McDonalds and similar are deemed restaurants. I am sure there is a lot there is lot of elasticity in fast-food restaurants that market themselves on price. For restaurants that are even a little up-market, the elasticity is probably much lower.
Re: Automatic reaction... (Score:2)
I often think "For $12 I can get half a pound of steak, a potato and a veg and pay significantly less than that"
Uh, sure, but do I really have to explain the difference between $12 of uncooked groceries and a $12 cooked/prepared meal?
Here in Texas, a large Big Mac meal (w/ large fries and large drink) is $9 + tax, as a data point.
Re:Automatic reaction... (Score:5, Insightful)
If those restaurants go under because they have to include the full cost of the meal, service and all, in the prices up front then FUCKING GOOD. Bring it on.
Socially accepted bullying should not be an accepted alternative.
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You are the type of person that the government should be protecting us from.
So Im happy that, where I live, the government is doing its job.
Im also glad I dont live in the US, where people like you seem to have more power.
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I am all for helping people who are having issues through no fault of their own. But why should society help people who made bad life choices? One of the best life lessons my parents ever taught me, that it seems like most of today's humans were not taught, is that you can screw you entire life arc up, affecting the entire rest of your life, with a bad decision that take you less than a minute to decide and implement. If able bodied and minded people want more money, get a skillset that warrants it. If you
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Typical. You can't win the argument with logic so you pull straw man tactics and make it seem like I said something I didn't. Notice I said able bodied and minded. I have no problem with people who are NOT able bodied and minded getting open ended assistance. But for able bodied and minded people who are where they are through their own bad decision making, never.
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The argument is effectively that if people realize the full price of the meal before purchase, they won't purchase. By hiding the true cost, customers buy something more expensive than they otherwise would have. I agree this is why businesses do it, but disagree with it at the ethical level. Exploiting someone else's inattention or poor math ability is basically what Ferengi were made to parody in Startrek. If customers can't afford your food, tricking them into thinking they can is wrong.
I think the actual
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Most people do not want to make informed choices. They just want their burger and they'll pay a tip because it's the custom. Will people buy more bec
Re: Automatic reaction... (Score:2)
A local movie theater chain that delivers food/drinks to your seat adds an 18% service charge on food orders BUT it uses that money to pay the wait staff/cooks a higher wage (I think $17-18/hr). They announce it clearly during previews and on posters in the lobby, so I'm all good with that, and if you like you can tip more but they say it not expected.
That's fair, I think.
If they raised the prices 18%, people would assume they were expected to tip on top of the raised prices, and would avoid ordering food i
2nd order effects (Score:3)
If you turn to paying full wages, then the business has to pass on the cost ... Given most restaurants operate on very thin margins, many people simply wouldn't go out. ... and thus there'd be a lot fewer employed waiters and waitresses.
Given how bad eating out is for society, how unhealthy 'outside food' is, could this be a net gain for society?
People cook healthier meals at home, fast food outlets close, Americans in particular get healthier, earn more, spend more, open more productive businesses.
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I agree. Thank you for replying.. my famil has had the same experience.
Re: 2nd order effects (Score:2)
Given how bad eating out is for society, how unhealthy 'outside food' is, could this be a net gain for society?
Well, it would be pretty bad for all the waiters, bus staff, kitchen staff etc...
Did you really not even consider the impact on the folks that work in restaurants?
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I did. Who would want that?
But my personal experience, my family's experience, the experience of the other person who replied in this thread, and common sense, all attest that eating out is generally worse for health and finances. If you can cook healthy meals at home, that's the best option.
Perhaps an alternative to 'eating out' could be 'eating inside out'.
A buyer would source fully cooked or semi-prepared food from local home-based chefs and eat at home.
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Clarification -- by "Who would want that?", I meant "Who would want people laid off?". Not me, for sure.
If there is a hypothetical "eating in" movement, restaurants will have less custom. So serious thought must be given to livelihoods disrupted by this. Strategies are needed not just for restaurant staff, but restaurants owners as well.
When the market for tobacco declined, tobacco farmers diversified into alternative crops specific to their regional conditions -- fruits, vegetables, cotton, etc. But cigare
Re: Automatic reaction... (Score:4, Insightful)
There is so much overhead in most US restaurants because everyone wants to be everything to everyone. Elsewhere in the world you see much more specialization, find one thing you are extremely good at and focus there.
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It's not even that, the rest of the world also has everything to everyone restaurants, and overheads. Just pay your fucking staff properly and put those costs in the price of the meals and call it a day.
The USA is somewhat unique in the world where the sticker price is detached from reality. I still remember walking into a shop to get a $1.99 Mars Bar and then leaving empty handed because apparently the $2 I had with me wasn't enough to pay for them. In a country where you can't estimate the cost up front I
Re: Automatic reaction... (Score:2)
I still remember walking into a shop to get a $1.99 Mars Bar and then leaving empty handed because apparently the $2 I had with me wasn't enough to pay for them.
Really? You were unaware that there is sales tax on candy? Is candy tax-free outside the U.S.?
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Of course sales tax exists everywhere. But in literally every other country on the planet that tax is included in the sticker price. So yes, I was COMPLETELY UNAWARE that in the USA when you pick up something for $1.99 that you can't leave the store with it if you give the store clerk $1.99, which is literally how it works anywhere else in the world.
In the rest of the world when I take my $1.99 candy to the counter I pay $1.99 and then I get a receipt that may say $1.70 candy, $0.29 sales tax.
That is how it
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That feels good to say, but doesn't actually work in reality.
In the US tipping is so ingrained that it may be very difficult to change there, but there are many examples of non-tipping societies where it works perfectly well.
The price of things is clear. The division of costs is clear. It's generally preferred by all participants in the system.
Re: Automatic reaction... (Score:2)
Abandoning our tipping culture is simple, all we need to do is to get *everyone* to agree to the change, how hard could that be? LOL
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Re: Automatic reaction... (Score:2)
They never started tipping.
The issue isn't that it won't work in the U.S., it's the pain/shock of switching from a tipping culture to a non-tipping culture that is the issue.
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How does this not work in reality? There many countries where restaurant staff are paid wages and charge prices inclusive of all their costs. Restaurants in those countries are doing just fine. And I've generally found service much better in the non-tipped countries likely since wait staff have a dependable, stable wage, and don't view the job as a temporary thing until they 'get back on their feet'.
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In other countries, you have generally higher on average prices per menu item than equivalent in the US. Not always, and it doesn't always feel that way; I was in Japan a few years back and it felt cheap because the Yen was way down, but I also was in Norway recently, and every meal even at a standard restaurant was nearly US$100 for 3 people. However US restaurants also face much higher costs in overhead
Re:Automatic reaction... (Score:5, Insightful)
Why do you speak of two absurd opposites? No you shouldn't Karen out. And no you shouldn't accept it either. You should tell the restaurant to remove it from your bill, then to go fuck themselves and to never visit the establishment again.
You are normalising the behaviour of unclear and hidden costs. Leave that shit to Americans and fuck you for every time you've blindly tipped 10% in Australia when someone has added this charge to the bill without your explicit request.
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Replying to undo fat-fingered moderation. Sorry.
That's not how replying to undo a mod works mister Anonymous Coward ;-)
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I just click "zero", which is the biggest button in any aussie place I've been to that "offers" tipping.
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All this is, is fooling the customer into thinking they are paying a smaller price than they actually are.
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To automatic tipping, is not to Karen out and cause a scene. I pay the 10% (Usually tipping 20-25% on average as my mother was a bartender and waitress my entire life), then I walk out and never come back. It's equally "Automatic" ;-D
If the tip is automatic, that's all you're going to get from me. It'll be less than I would have tipped, but you choose.
Australians copying the dumbest of all US habits (Score:5, Insightful)
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Business owners are cunts, pure and simple.
Put the actual price on your menus.
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Long as we're bucketing people, people who blindly assign the term "cunts" to a group of millions of people trying to earn a living are idiots.
I'm pretty sure my abstraction is more accurate than yours.
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Put the actual prices on your menu, fuckwit.
Inclusive of all taxes and staff wages.
That's how it works in my country. Shove your 'tipping culture '.
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You're wrong, but it's good that you put yourself out there.
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Well, as a great one once said, you miss 100% of the shots you don't take. :)
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Don't forget that term has a slightly different nuance to us aussies
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people who blindly assign the term "cunts" to a group ... are idiots.
In Australia, we call those idiots "bogans". Its a bit like redneck, but not necessarily rural.
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Tipping isn't a disease (Score:2, Troll)
Anytime you see a quaint little American custom that you can't figure out why it's still around the answer is usually there was some nasty little bit of racism that we've forgotten because of the civil Rights amendments and a shitload of lawsuits.
In this case though this i
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Sad to see this tipping disease spreads to another continent. I mean, when copying stupid things, they could at least modify the idea to make it more Australian, like increasing the prices by 20% but allowing the customers to deduct an up to -16% dissatisfaction rebate.
The introduction of tipping is a bit like a company saying to employees that from now on a larger portion of their salary will come from an annual bonus.
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allowing the customers to deduct an up to -16% dissatisfaction rebate.
In your proposal, customer can express dissatisfaction about the waiter, but not about the boss that decided to hire too few people to do the job.
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Who said the -16% gets passed on to the waitstaff?
Also it wasn't a serious suggestion, it was a joke about rebate culture in Australia. I got an AC installed 6 months ago and there were three, THREE SEPARATE REBATES to claim on it.
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Do tips get divided among those who are on sick/long term sick? If not, they're encouraging covid into the workplace. I'd rather it part of the menu price and know that you're somewhere that looks after their staff in a civilised society.
My local Outback Steahouse (Score:1)
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The Outback Steakhouse is Australian in the same way McDonalds is Scottish.
Reddit Murdered Them (Score:2)
Reddit murdered them. And they deserved it.
The Reddit post that triggered the murder. https://www.reddit.com/r/austr... [reddit.com]
The cleaned up Google reviews [google.com]. Sort by newest.
Automatic tipping is a price Increase. (Score:5, Insightful)
Be honest and put it in the price.
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Be honest and put it in the price.
Airlines enter the chat.
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In Australia the price they list is the price you pay for airline tickets...
As a patron you make the choice (Score:2)
cost of doing business? Huh? (Score:4, Informative)
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Exactly. Cash in hand to the staff when you want to thank someone for good service. Handing it to them PERSONALLY is personalized SERVICE being reciprocated. The extra 2 min out of your life to show your gratitude to someone can mean more than the monetary gratitude. Try it sometime!
Definition (Score:5, Insightful)
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Then how is it still a tip?
I suppose if the restaurant insists that it is a tip, the customer can ask then to recalculate the bill without it.
But the whole thing leaves a bad taste in the mouth of the customer - Surely not something a restaurant strives for.
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But the whole thing leaves a bad taste in the mouth of the customer
Can confirm. I've definitely avoided returning to places I used to frequent after they imposed a $5 "service charge" to leave my takeaway coffee and chicken panini on the counter and call out my name.
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But the whole thing leaves a bad taste in the mouth of the customer
Nice line!
I’ve not seen it. (Score:3, Informative)
I live in Aus and haven’t seen it. Restaurants will usually have a tip option on the eftpos machine but it is very optional and if it was mandatory, they would loose repeat business.
And there is nowhere else I’ve seen tipping.
Minimum casual wage is now almost $32/hr ($21USD)
Since COVID though cost of living has skyrocketed, so I do feel for the restaurants.
Re:I’ve not seen it. (Score:5, Interesting)
I live in Aus and haven’t seen it.
I don't live there anymore but I have seen it a few months ago when visiting the folks in Queensland, and I flipped the fuck out. I talked to some friends about it afterwards and they were like "Yeah, nah we don't go to those ****s anymore."
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Exactly - I've not seen it either, in Melbourne....
Anyone who did - wouldn't get a second round of customers...
Perhaps wishful thinking from people in the US, hoping someone has copied their shit?
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Waiters and waitresses and other food service staff not only get paid a "minimum" wage (another US-ism), but an actual living wage. (Ok, as much as *ANY* wage in a big city is a living wage). There is an award, perhaps modified locally, and then loadings for evenings and weekends.
So yeah, tips aren't needed. I would probably have left spare change on the table when I used to pay cash.
Now, how its happening is that most electronic ordering systems are imported from the US. They DO have the tip button enabled
$32 Hour (Score:3)
tipping = gratuity = discretionary (Score:5, Insightful)
That's what a "tip" means. It's an amount paid at the discretion of the consumer, meant to express appreciation for the service rendered.
If it is automatically applied, it is not a tip. If an establishment does not include it in the price of the goods or services, then it is an anti-consumer effort to mislead or deceive. A message or disclaimer saying "a X% service charge will be added on all prices/items" is inadequate disclosure. To understand why, simply make the advertised price 10% of the true price and make the service charge 1000%. If the consumer has to do mental math to get an accurate understanding of the true cost of the goods or services being advertised, that is inadequate. Moreover, the use of such tactics is itself evidence for its shadiness, since why do it at all if it does not confer some advantage to the seller?
A truly level playing field must have totally transparent pricing: the price that is advertised must be what you pay. If there is any tax or service charge, it must be mandated by law and it must be the same percentage for all establishments, so that the consumer has a reasonable expectation that if they take their business somewhere else, they are paying the same rate. But these bottom-of-the-menu disclosures (when they even happen at all, which at least in the US, they sometimes don't) are deceptive practices that business owners use to try to hide the true cost of doing business.
More insidiously, they are also used to capture some or all of the tip income that servers have traditionally received. Some establishments say that this is done in order to be fairer to staff that are not front-facing. But I argue that business owners can and should do this through appropriate setting of wages in the first place. Doing it by capturing tip income through service charges is, again, deceptive. The business owner has full control of the employee compensation structure and consumer-facing pricing structure. That they are so fond of playing games with both means that whatever excuses they make are not to be trusted.
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Bring that here (Score:5, Insightful)
We need city ordinances banning tipping. Tipping is stupid, for one thing it's like how much do you tip service workers like the guys who deliver a home appliance that offered "free delivery"? 20% of the cost of the washing machine seems like a lot. Best solution, ban tipping and force companies to pay their workers adequately.
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This one would be easy though, people want it .. it would only take some publicizing. Don't have to arrest anyone.
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Police do not enforce commercial law breaches. Never have. Even if you assume that police are incompetent because they don't solve your specific pet problem, fining businesses is a council / state regulatory issue.
Annoying (Score:5, Insightful)
So the last thing Australians should do is accept this stupid idea. If the cost of business climbs you put up your advertised prices, not try and hide it in some new slimy fee.
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It's full disclosure everywhere else as well. The amount before tax and after tax are written on the receipt, and you can understand the effect of tax. I agree with you this is important, for example basic food could be taxed lower than pre-made meals and people need to learn about it.
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The typical customer is neither an accountant, nor are they interested in the business's tax internals. Charge what the sticker says. If you want to charge more, fix the sticker.
Re: Annoying (Score:2)
There's no reason the US has to have so many separate taxes. Possibly state, county, city combined. The price on the shelf should be goddamn full price. Even in a multistate country like Australia they managed to figure it out.
As an American citizen this yet again another thing to be ashamed about. It makes us look RETARDED.
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On the contrary, in the US you are paying the business the cost of the good or service. The tax is a surcharge added by the local, state, or federal governments. I think it's vital to understand just how much prices are affected by taxes. It's "full disclosure."
No one is asking you to hide taxes or not list them on the receipt. Your point is absurd on its face. When I get quoted $22 on a website when I check out it says clearly the item is worth $18.30 with $3.66 tax added. Same when I buy something from the supermarket.
Minimum wage and penalty rates (Score:2)
Minimum wage is USD 16.5 per hour, but most service bots will also get penalty rates (50-100% typically) for working evenings, public holidays or weekends. It is not unusual for cafes and the like to have higher prices at weekends and public holidays.
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And that's minimum. Cafes etc will almost always pay minimum, but any sort of fine dining pays more.
I will blacklist anywhere that does this. (Score:2)
I am in Australia and if I see a business that is doing this (rather than just increasing the menu prices to make up for increased costs if that's what it takes to stay in business) I will not patronise that establishment.
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I am in Australia and if I see a business that is doing this (rather than just increasing the menu prices to make up for increased costs if that's what it takes to stay in business) I will not patronise that establishment.
Good idea. And if you notice the policy written on the menu after having been shown your table, you could leave, explaining why on your way out.
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I tell them I expect massive over pours on the alcoholic drinks since the wait staff is now working for me and not the owner.
It's like with giving money to the homeless (Score:1)
It may help with immediate issues at hand, today, but is not going to address the systemic problems that put them on the street. If you give them money, they will soon start asking for more.
Same thing with tips. If you start topping up the bills to keep businesses going, all it will do is make them ask for more, and more, and more until the bubble bursts and it all goes to shit.
No (Score:1)