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A customer is raising questions about tipping practices at Applebee’s after noticing that the suggested gratuity on his bill was higher than he expected.
The customer, who shared his experience in a TikTok video, questioned why the restaurant’s payment kiosk suggested an $11.30 tip on a $49.49 bill.
A 20% tip on $49.49 would amount to $9.90 — about $1.40 less than the suggested amount.
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The apparent explanation was that the kiosk calculated the suggested gratuity on the after-tax total of $56.50, rather than the $49.49 subtotal.
The payment screen indicated that tips were calculated after tax and before discounts, according to the video.
An Applebee’s customer used the calculator on his phone (not pictured) to figure out the correct amount to tip 20% on a $49.49 bill. (Peter Burke/Fox News Digital)
Fox News Digital reached out to Applebee’s and the customer for comment.
Robert Mahon, managing partner of New York City-based Mahon Hospitality Group, told Fox News Digital that restaurants generally have some control over how their payment systems calculate suggested gratuities.
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“It varies from restaurant to restaurant,” he said. “The systems come with default settings, but the restaurant can usually change them. We use Toast, which defaults to calculating tips before tax, and there’s a setting in the back office to switch it.”
Mahon said he believes gratuities should be based on the pre-tax amount.
Applebee’s should be able to adjust its system to calculate tips before tax, another restaurateur told Fox News Digital. (Bill Pugliano/Getty Images)
“You’re tipping for the food, drinks and service — adding tax into that calculation doesn’t really make sense to me,” he said. “Guests can always leave more if they want.”
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He also stressed the importance of transparency when customers are presented with suggested tipping percentages.
“The main thing is being clear. If someone hits 20%, they should know what they’re leaving 20% on,” he said.
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Fox News Digital previously reported on a similar incident at Dave & Buster’s, where customers questioned suggested gratuities that appeared to be calculated on after-tax totals.
Fox News Digital reached out to Applebee’s for comment. (USA TODAY Network via Reuters Connect)
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While the Applebee’s kiosk appeared to disclose how its suggested tips were calculated, the incident highlights the importance of checking the amount on which a suggested gratuity is based before paying.
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“I’d want to see the full receipt before putting it all down to tax,” Mahon said.