Are you tipping more than you should at Cheesecake Factory? A new lawsuit claims just that: customers are being tricked into overpaying for service.

The plaintiff in the lawsuit is Marcel Gordman, who claims the national restaurant chain is recommending inflated tip rates based on the entire bill, even when the bill is being split between parties at the table. So for the sake of ease of math and argument, let us say your entire table’s bill is $100, You only had a bowl of soup and glass of wine, which was $20 total. According to the plaintiff, your Cheesecake Factory bill would normally ‘recommend’ you tip $20, even if you just had a bowl of soup and glass of wine.

Gordman is the primary litigant in this class-action lawsuit because he says he was tricked into paying a 40% tip on his portion of a bill during a visit to a Cheesecake Factory restaurant. The amount he owed on the bill was $38.50, and he decided to give a 20% tip, and the receipt told him that would be $15.40. In reality, he ended up tipping 40% for his meal.

The lawsuit claims that this is standard operating practice at more than 200 Cheesecake Factory restaurants. A Cheesecake Factory spokesperson says its gratuity recommendations are “suggestions only” and that “guests are free to tip as they please.”

Money Troubles

But the issue isn’t only with multiple parties dining at the same table splitting checks. In September of last year, a customer was dining with his wife at a Cheesecake Factory in Valencia, California. When the bill came, Mike Abreu was ready to pay the bill. He says it was $33.76. “Right above where you fill in the tip and total was the tipping guide which prefigures your percentage based on your total bill. I personally am a fan of these features as I don’t like figuring percentage on an odd amount so I normally just go with what they put for 20%. So I began to write in $14.71 as it stated was 20 percent of my bill.”

Abreu continued: “My wife then asked how much was the bill and I replied ‘almost $50 with the tip.’ She said ‘That’s pretty expensive for two iced teas and two apps.’ I looked at the bill again and saw $33.76 which was correct but then I realized that 20 percent of that should be $6.75 and not $14.71 that was printed on my bill.

According to BuzzFeed, the Cheesecake Factory spokesperson say the discrepancy was caused by an error when a staff member mistakenly processed the Abreus’ order along with another order, yielding a larger total than was then used as the basis for the suggestion for the tip. But looking at the receipt, you don’t see that.

Tipping Over

So the Cheesecake Factory is being sued in Los Angeles Superior Court for allegedly presenting tip suggestions misleadingly based on percentages of a whole table’s bill in instances where diners split checks. From the brief:

“The Cheesecake Factory … [when a table] uses two or more credit or debit cards to pay for the charges, the combined bill is divided between the credit/debit cards and Defendant presents each diner/consumer with a separate sales draft for a portion of the bill (a “split bill”). On each of the sales drafts, Defendant includes suggested gratuity amounts to facilitate customers in calculating and leaving a gratuity for service. Defendant represents the suggested gratuity to be 15%, 18%, 20%, or 22% of the check amount reflected on the sales draft, but, in reality, it calculates the suggested gratuity on the combined bill and the suggested gratuity amounts are actually 30%, 36%, 40%, or 44% of the amounts shown on the separate sales drafts.”

“When customers use credit or debit cards to settle their dining bill, Defendant provides them with sales drafts that contain suggested gratuity amounts, and when Defendant divides the total bill between two or more credit/debit cards, the sales drafts contain suggested gratuity amounts which do not accurately represent the total of each sales draft. Plaintiff estimates that over 80% of restaurant charges are paid by credit or debit cards and that approximately 10% or more of those charges (which represents many thousands of consumers) are divided between two or more credit/debit cards and are affected by The Cheesecake Factory’s wrongful suggested gratuity practices.”

There is potential for this to become a class-action lawsuit against the restaurant chain. At Hackler Flynn, our goal is to guide you in your business so you don’t have to face this media scrutiny and legal fees by operating your business well from start to finish. Contact our team to give you quick, expert advice on all of your legal needs!

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