California restaurant responds to backlash over 18% service charge for parties of 1 or more
CUPERTINO, Calif. - A Vietnamese restaurant in Cupertino faced backlash on social media over an 18% automatic gratuity applied to tables with parties of one or more.
Pho Ha Noi has several locations in the South Bay.
A Reddit user posted a photo in the platform's "mildly infuriating" channel, showing a receipt from Pho Ha Noi in Cupertino dated Sept. 8. The receipt indicated an 18% gratuity added to the bill.
A message at the bottom of the receipt read: "18.00% Service Charge Included. For parties of 1 or larger, a 18.00% gratuity is applied automatically. If you have any questions, please speak with a manager."
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The user wrote in the photo caption, "I’ve seen restaurants include gratuity when it’s a large party but never for parties of 1!"
The restaurant's policy shocked Reddit users, generating nearly 5,000 comments.
One user in the thread suggested, "I would refuse to pay until they take it off. This is illegal if they did not disclose it upfront. Once they take the charge off, leave no tip and pay the tab and never return again."
Another user expressed, "Neat way to lose customers."
A third user quipped, "Imagine piggybacking off customers to make up for paying staff so poorly. Servers are supposed to earn the tip, not expect it."
However, the restaurant appeared to have notified patrons of a policy amendment last year.
On Nov. 10, 2022, the restaurant posted on Yelp that an 18% service charge would be added to all bills.
"The service charge is not gratuity, but is used in part, to increase our employees' wages, and to cover other employee-related costs and health insurance. A service charge allows more equitable distribution to all employees of the restaurant. Additional gratuity is appreciated, but is not expected. We will be happy to remove the service charge if our service doesn't satisfy your needs," a sign displayed on the Cupertino restaurant's door read last year.
Regular customers at Pho Ha Noi in Cupertino say they’ve known about the automatic 18% gratuity since the policy changed last year.
"Either they’re going to put it in the menu prices, or they’re going to make it pretty clear to the consumer where the money was going," said customer Jonathan Hong.
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The service charge is explained on the menu and there’s a sign posted near the entrance.
"You’re getting a quality meal and I think just adding it in makes it more simple. I think people are kind of wondering what they should do after the bill and this way, it’s already there," said customer Lori Hardy.
Thousands of people commented on Reddit, some questioning why the restaurant would add the tip for serving one person and the owners have an explanation.
"Whatever I do, I just only want to serve the customer better and keep the good worker because if I don’t pay them well, they have the right to leave my restaurant," said Helen Nguyen, Pho Ha Noi co-Owner.
Nguyen says they added the charge last November and 100% of the charge is used for staff members. The owners say customers are allowed to ask for it to be removed if they aren't satisfied with the service. Still, they believe people online who don’t eat at their restaurant are unfairly criticizing them.
"A lot of people are racist, they call to my restaurant, and they yell at my employees, and they ask us to close the business. That’s not nice to do that. We are trying to do that because the service worker doesn’t have enough pay for the very expensive living in the Bay Area right now," said Harry Nguyen, Pho Ha Noi co-owner.
One of the Pho Ha Noi's workers also told KTVU that because of the service charge, he doesn’t have to work two jobs anymore. The owners say they also provide health insurance, and they say other local restaurants also have automatic service charges.
KTVU's LaMonica Peters contributed to this report.