Florida Restaurant Implements No-Coin Policy

I agree with much of what you said, as do others that have posted in this thread previously. One of the original questions posed in the OP was inquiring on whether this place might fix its prices to exploit the seemingly innocent concept behind this "no coin" policy. I agree it's mostly overkill, but the chart I supplied does give a clearer visual representation of what this "no coin" policy actually means. You say most people aren't 'bean-counters,' this is precisely why this "no coin" policy is so profitable! If one man, whether it be the restaurant owner or his brother or his economist friend, sees a medium by which consistent, unquestioned profit can be had there can be no doubt that it will be maximized. Assuming this man keeps accurate tallies, "it all works out" likely doesn't summarize the full scope of his own understanding of his till... he is either making profit, breaking even, or losing a very, VERY slim margin on this policy. He is already profiting due to the fact that he doesn't have to supply his restaurant with change and deal with costs that result from that.

Overall, I doubt the owner put this much thought into it, but you'd be very surprised by how many actually do hash these things out on paper. The fact that the restaurant seems 'ritzy' leads me to believe this is more a convenience policy, than a profit-making policy; either way, it does seem oddly convenient that many of his highest returns through this policy are maximized in some of the most common total price intervals for a restaurant bill.

But I guess sometimes 4 is just "2+2" rather than "sin(30)^2 + cos(30)^2 + (100000)^0 + log(100)" . Your point is taken.

 

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On a related note, I just ordered a "Cheese & Charcuterie" with 5 selections and gave the restaurant an extra 98 cents

 

You make excellent points.

I would tend to agree with this.

Okay, you've impressed me! Stop flaunting your math skills!

By the way, I'm still skeptical that the journalist got it right that the restaurant only rounds up.

 

It may seem paltry as we're talking a few cents, but what if next time you went to buy a new a car and the salesman rounded up to the nearest thousand dollars because it made his book keeping easier. With the logic of everyone seems happy, I guess we'd gladly pony up and be on our way. After all, it's just money, right?
Guy

 

No need to be glib. I think you're underestimating the intelligence of the average customer. Everyone would not "seem happy" if they saw they were being ripped-off.

 

No, it does not impy that at all. If you carefully read the article I quoted in the opening post you will see that the restaurant does indeed round UP to the next dollar.

So, you see, they DO NOT round down; they only round up (as reported in the article).

 

So if they don't see they're being ripped off, they're happy? Don't get me wrong, I wouldn't mind this if it were already rounded on the menu, it's not a hard thing to do. In reality I do round every time I eat out, as I include tip so my total is even, even if I pay cash. A lot of places now ask if you'd like your change donated to various charities and such in an effort to avoid change, and thats ok as well, as you have a choice. I'm just saying, 49 cents is 49 cents, especially in a world where nearly 1/3 of the workforce is out of work.
Guy

 

The no-change policy has a greater effect on small bills.

I checked their menu and the cheapest item I saw was $3. Assuming 6% tax (as someone stated above), if all you ordered was that $3 item your tab would be $3.18 but you would have to pay $4 (with the no-change policy). The $0.82 in change that you must forfeit (to the restaurant) represents 25.79% of your bill.

However, if you ordered their $180 bottle of wine your total bill would be $190.60 which would be rounded up to $191. The $0.40 upcharge represents only 0.21% of your bill. (In other words, the lower your bill the greater the penalty, potentially. In this example the cheapest item on the menu brings with it a penalty more than 100 times greater than the penalty that comes with the highest-priced item on the menu.)

 

Hobo, I did read the article carefully and pulled it up again to reread. I understand your examples (I understood them the first time). The reason I think the article might not be consistent or thorough is because the owner says "it all works out" and "customers usually get extra money." Maybe he's lying, but I tend to trust people at their word unless shown otherwise.

These quotes imply he's rounding both up and down. If he's not, and only rounding up, perhaps he makes it worthwhile to the customers in other ways: serving larger portions or food or wine, for example. The only way to find out for sure would be to call or visit the place. My only real point is that for the place to have been in business for four years, he's doing something right and his customers are satisfied or he wouldn't have lasted. Beyond that point, I don't think it fair to accuse anyone of fraud until all the information is known.

 

Poor wording on my part. My point is that I wouldn't jump to the conclusion that he's ripping people off. It seems to me that his customers generally must be feeling satisfied or they wouldn't patronize the place.

I think the larger issue here is one I mentioned earlier: a lot of people don't want to fuss with bean-counting, especially if they're out having a good time. If they're not worried about their small change, why should anyone on this thread get angry over it? And the fact that people are out having a good time doesn't mean they're not smart or savvy enough to figure out a 20% tip after three glasses of wine, or sense there's something wrong about the bill.

If the owner wants to take advantage of this "goodwill," that's his prerogative; but I would tend to think he's not, because restaurants, like most other service industries, live or die by customer satisfaction.

 

Naturally, the total "penalty" is some value between $0.00 and $0.99 ; therefore using a percentage relative to the total bill is extremely misleading, since as the bill gets higher, the "penalty" remains at a number less than 1.0 that gets increasingly insignificant as the bill gets larger. The statement I bolded is incorrect; the penalty is not related to how "great" your bill is, as the profit structure is cyclical (i.e. a $100.00 restaurant bill yields a perfect exchange whereas a $101.00 tally requires the buyer to fork over another 94 cents, both prices being before taxes). Your assertion is only true for the initial interval from $0.01 to approximately $16.00, because that represents one cycle and in that pattern the highest 'penalties' are dealt at the lower prices. It is because of this that a $1.00 bill has the same penalty as a $51.00 bill, a $2 and a $52 have the same, a $3 and a $53 have the same, and so on.

 

That is why I included the word 'potentially'. (That was to address those examples where the total bill did not include a penalty (e.g., $100) and where the math worked out where the penalty on a larger bill happened to be less than the penalty on a smaller bill.)

Apparently you missed the gist of my post. I understand the 'penalty' on a bill of $1.01 is the same as the 'penalty' of a bill of $51.01. (There is no penalty on a bill of $1 or $51 because the total of the bill is a whole dollar amount and, hence, there is no need to round up to the next dollar to avoid dealing in change.)

My point was that the penalty on a bill of $1.01 is a greater percentage of the amount owed than the penalty on bill of $51.01. (The penalty on the former is 98.02% whereas the penalty on the latter is 1.94%.)

I hope I have cleared up any unintended confusion.

 

I'm ashamed to say that this restaurant is in my neck of the woods, but it is certainly one that I will never patronize.

By the way, Melanie Payne has been writing the "Tell Mel" column for the News-Press for about 10 years, so she is not an inexperienced reporter.

Chris

 

You should drop by sometime and get some answers to our questions:

Do they only round up or do they also round down? The example cited in the article was a total bill of $23.32 that was rounded up to $24.

If they do indeed round down what is the cutoff point? (A fair point, in my mind, would be 50 cents but the restaurant has demonstrated that they round up from 32 cents.)

Do they round up to the next dollar for credit card charges too or do they charge the exact amount?

Does the waitstaff accept change for tips or do they also expect patrons to round up to the next dollar?

 

+1

The one piece of information throwing a wrench into this whole matter is the owner's quote that "customers usually get extra money." This only could happen if he were rounding down as well as up.

Once again, I can't imagine that it's otherwise. Look how many people on this thread are upset with his alleged practice of only rounding up. I would be too; it would rub me the wrong way because it's unnecessary, cumbersome and smacks of unfairness.

If we represent a fairly typical cross-section of diners (i.e., sensible people), then the typical cross-section of customers there would likewise find the practice unacceptable. I would think they would've complained about the practice on the first day of business. But the place has been in business for four years. Clearly they're doing something right.

I'm not claiming that the reporter is unprofessional; there is just something about the scenario that is not adding up.

 

You'll note that the owner specifically stated that he rounds up to the next dollar. As for how he handles credit card charges, I'm not going to waste the gas for a 40-mile round trip and a $2 bridge toll to ask the lowlife cheapskate. Personally, I hope he is rounding up on credit card charges because he would be in violation of credit card rules and subject to losing the privileges and may possibly be breaking the law.

If you wish, you can post your question or e-mail it to Mel.

Chris

 

I'm not so sure you understand what I said. Affixing "potential" to your estimation that the "lower your bill the greater the penalty" does not in anyway rationalize that statement.
I do realize that you took this 'penalty' and made it a percentage of the total bill, of which I said:

Consider the penalty as X. Consider the total bill (with sales Tax) as Y. You are saying

[(X)/(Y) ]*100 = Penalty Percentage

I'm trying to say that this "penalty percentage" is extremely misleading, based on the following facts:
0<x<1
Y --> Infinity

So you're basically asserting that dividing a number that is in some senses finite (because it is bounded by 0 and 1) by a number that gets large without bound yields a lower penalty. Hobo, this is as simple as saying:

1/(Something that's getting bigger) = Something that's getting smaller


I just don't think that's the best way to demonstrate what's going on here; by attaching an ever-increasing value to the relatively fixed penalty rate, you are essentially muddling the significance of the cycle itself. As the bill goes up, this "penalty percentage" that you created does indeed go down, but that's only because the penalty percentage involves dividing by the very number that is getting larger!

Back to your original statement: "the lower your bill the greater the penalty, potentially" ; if by penalty you mean your 'penalty percentage' then yes, you are indeed correct! However, I think using that as an indicator of the 'penalty' might be right only in your own mind (after all, you are a legend there )

I hope you see where I'm coming from; I see what you are saying but I do not think that is the way you should go about it. Can you see what I'm trying to say?

P.S. The equations I set up are merely a way I can articulate what I believe you are saying. I am not lecturing you there, just trying to demonstrate my contentions more clearly.

 

i dont get the big deal here. if you went and sat down at a restaurant, ordered a $3 fry, had the waitress bring it to you, ask if everythings ok, if you want a drink, and bring you the bill, and once you leave, clean up after you...., that you wouldnt give a $1 tip?

its right there on the reciept. if it comes to 29.50 and you want to tip the low end of 10-15%, and go with 10%, you tip $3. since you got shorted 50 cents, you get to choose if you want to round up or down. she gets $2.50, or $3.50. im sure most regular customers are used to this by now.not leaving a tip at all would be an insult,(unless the service and food were absolutely horrible)

also, many places have all the tips go into a jar and get separated at the end of the night, (a certain % for the cook, the waitress, the dishwasher, etc.) that extra amount is probably added to that jar. (either way, im pretty sure it goes toward the tip.)

 

"We round up to the next dollar," Sofia said. "It all works out."

People speak in shorthand all the time. They abbreviate their thoughts, especially in casual conversation or when caught in the middle of a busy time. Maybe he simply meant they "round off" and then he reassures the reporter "it all works out."

At any rate, the article is not brilliant journalism. The reporter sites one example of a couple whose bill was rounded up and bases her premise on that. The only real way to find out what the place's policies are is to go there.

Nothing like assuming the worst about a person you don't know.

 

A tip should have nothing to do with the owner's "policy". Very few places have a "community" tip jar that includes the kitchen staff. Cooks and dishwashers are supposed to be paid a greater hourly wage than most waiters and waitresses. Any employer who groups his entire staff together to share the tips is probably doing so to circumvent the law. Maybe it is different now, but tipped employees were required to declare only 8% of their tips for tax purposes. By requiring the wait staff to split the tips with the kitchen staff, the employer is probably using that as justification for not paying his lawful share of matching Social Security payments.

Chris