Sauced Service Charge Leaves Bitter Taste in Customer's Mouths

Petaluma BBQ restaurant Sauced made a fundamental change last month in the way it charges customers - instead of diners leaving a tip for servers, an automatic service charge of 20 percent is added to all bills. The money is distributed to service workers and kitchen staff alike, increasing the total compensation for cooks and prep workers.

The move has left many patrons with indigestion. They’ve taken to social media to air their gripes. On the Sauced Facebook page, Kimberly Todd wrote about her negative service experience, concluding with, “ I understand the philosophy behind the 20% tip, but it has made your staff lazy and disinterested...The food is still yummy, but not sure it’s enough.”

And Leah Bradle wrote, “I’m getting taxed on my ‘tip’?! I was initially open to the 20% service charge as a replacement for tip, albeit presumably high. Then service was mediocre at best. Then you added my ‘tip’ as a taxable line item instead of an addition after the fact. That’s just dirty. I bet your profit margins are looking good on paper though yeah? Your food is not good enough to warrant us coming back for these service shenanigans.”

In an email to Patch, Kristina Wulff, Director of Brand Development for Sauced, acknowledged the negative online comments, then added, “Frankly, we made a decision, a very tough decision, in an effort to provide a better work environment for our employees, and the amount of negative reaction that we have received on social media only serves one purpose; to hurt our business and in turn, hurt the very people we are trying to protect – our employees. It’s difficult to sit by and watch as people make incorrect accusations, incorrect assumptions and hurl personal attacks at us without knowing the facts.”

The facts are available online. Sauced reports that the purpose of the service charge is to provide a livable income to kitchen staff without raising their hourly wages.

Sauced isn’t the first restaurant to adopt this model. While the National Restaurant Association doesn’t have firm statistics on the percentage of restaurants in California or nationwide that have taken similar action, spokeswoman Rachel Salabes told Patch, “With over one million restaurants nationwide, the restaurant industry is filled with unique business models, ownerships and varying concepts. It’s vital that restaurants continue to have the freedom to choose what works best for their business and their workforce to keep the industry thriving.

“The move towards a non-tipped environment is a new and somewhat small concept with only a handful of restaurants testing it nationwide. As the industry of hospitality, we’ve found the practice of tipping has traditionally attracted millions of employees to our industry and still has strong support from American diners.”

And that’s the beef that many readers on Facebook had with the policy - a loss of control over the tip. Many said they routinely pay 20 percent or more for good service but they want the option to pay more or less, not have it forced upon them.

Add your voice to the conversation in the comments section below or on Facebook.

--Sauced logo used by permission in 2012 Patch story