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Watch Out for Hidden Gratuities! The Truth about Tipping

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How much do you tip? The definition of tipping once came down to two words: reward and choice. But some restaurants are secretly breaking the mold. In New York it is legal for automatic gratuities to be added on for parties of eight or more, but these days, some restaurants are adding them in for parties of two. While the policy isn’t illegal, not properly disclosing the automatic tip is.

This has happened in chain restaurants in New York’s Times Square at Applebee’s, Red Lobster and Olive Garden, which has resulted in a lawsuit totaling $5.5 billion in damages.

It comes down to an issue of restaurants double-dipping for tips. By adding in service charges of 17 to 18 percent and still including a line for an additional tip, guests are often duped into tipping twice. It’s not just at chain restaurants in New York, but in restaurants and hotels throughout the country. Double tipping is especially an issue for room service in hotels, where guests would pay a premium for food to be delivered to a room and then be asked to tip on top of it.

Watch Peter’s latest CBS This Morning report for the proper guide to tipping…just once.

Don’t miss Peter’s previous reports 5 Secrets in your Restaurant Menu & 5 Secrets to Dining Out

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