Splitting the bill at restaurants using game theory
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“We’re going to split the bill,” said the organizer at my friend’s ninth grade birthday party. I didn’t think much of it until I ended up paying $40 for a $10 entrée. I felt cheated because I didn’t order a drink like most others. I was afraid to ruin the party mood, so I concealed my own anger, and that ended up ruining the night for me.
If you’re like people I know, I’m sure you’ve had similar horror stories. The overall feeling is that everyone seems to pay too much and no one is happy.
Should you just pay up? Do we need to teach better etiquette? Is better technology required?
No, no, and no.
It’s hard to change how people respond to incentives. But the group dining situation is screaming for better outcomes. As I’ve suggested before, if you don’t like the outcomes, don’t hate people, change the game. And the best tool is the aptly named field of mechanism design (brief intro here).
I’ll frame the dining problem by reviewing the three common payment systems—splitting evenly, pay for what you ordered, and separate checks. I’ll then suggest a solution for those seemingly intractable birthday parties.
Splitting Evenly
This is probably the most common solution. But three economics professors have shown that it’s a very inefficient system (pdf).
The system is problematic because it distorts the incentives of diners. At a table of 6, each item you order contributes 1/6 to your cost and 5/6 to everyone else. You have reason to order more, and so does everyone else. The outcome is that everyone wastefully orders and everyone ends up paying too much. It’s a version of the tragedy of the commons. Restaurants are well aware that diners rack up more expenses, so that’s one reason they favor keeping a common tab.
Furthermore, splitting the bill is unfair to people who prefer less expensive items. If you’re a non-drinker, or if you’re a vegetarian, you’re probably going to end up subsidizing the meals of the meat-eating alcoholics. Or, if you are a saver, you’ll end up subsidizing the people who splurge on ridiculous items.
It’s considered impolite to point out large price differences. It makes gluttons feel guilty and ruins the mood. Besides, is there a better solution?
Yes, you might say. Just pay for what you ordered.
Pay for What You Ordered
I always say, when you collect more money than is needed, it’s a sign that you’re in good company.
Hence, pay for what you ordered is the method I use with close friends. We all trust each other to calculate tax and tip, and not screw each other over. Actually, it’s not so much that we trust each other as friends, but that we are made to trust each other in a game theory sense because we can punish cheapskates the next time we go out.
Unfortunately, this system has its flaws too. How do you split a bottle of wine? Do you go as far as calculating the cost of each glass? What about when you share food, or finish off someone’s meal because they are too full? The problem is there’s a small difference between what you order and what you eat. The system favors people who order cheaper items but then try to sample as much as possible of other people’s food.
There’s one more issue. It’s often not possible to say who put in what. There’s an incentive to pay just a little bit less hoping someone else will be generous and cover. If the pot is short, often everyone is asked to put in an extra dollar or two. So the system still favors the cheapskates—especially the people who pay less and then sneak away to the bathroom when everyone is asked to pitch in more.
If you don’t trust your company, why not just separate checks?
Separate Checks
This is the most efficient system, in terms of incentives. People will only order what they really want because they ultimately have to pay for it. Perhaps this is why researchers found that 80% of subjects favored separate checks.
So the economics are pretty favorable, but there are a few practical problems.
First, it takes longer to pay as your party size gets bigger. As a matter of practice, waiters don’t enjoy this.
Second, separate checks are impractical when you’re sharing appetizers or bottles of wine. What if you share an appetizer with one friend but then take a glass of wine that was split with four other people? It’s a hassle to sort it all out.
Third, in parties, people usually treat the guest of honor. Would a restaurant actually split one item across everyone else’s bill? I am not sure, as I’ve ever seen this.
Perhaps the biggest problem is that separate checks are not even allowed at some restaurants—particularly nicer ones. It’s probably because they know people order more on a common bill, and it’s somehow seen as less “classy” to offer separate checks. I don’t totally understand it, but I have been rejected by at least one snobby waiter (Oh, no, no, monsieur, we don’t do that).
Thinking about an ideal outcome
What’s an ideal outcome? I think it would have three elements: that each person orders properly, each person pays what is owed, and the money is collected quickly.
How do the three methods compare on these criteria?
Splitting the bill –>Over order, over pay, quick collection
Pay what you ordered–>Order correctly, a few overpay, moderately fast collection
Separate checks–>Inconvenient for sharing, pay correctly, slow collection
So each method is the best at exactly one trait. Perhaps that’s why there’s such disagreement over what to do—each method has its unique merit.
Let’s abstract the problem a little more to consider why the dining problem is so complicated. I see six main characteristics that cause trouble:
1. Hidden preferences on food
2. Hidden willingness to pay
3. Selfish desire to pay less
4. Desire to look fair
5. Desire to maintain party atmosphere
6. Hidden payments on a common bill
I’ve mulled over several solutions, and I think I’ve come up with a good start.
I’ll deal with the situation of a birthday party with a large number of people. Other situations can be handled similarly—they might even be easier because you don’t have to cover the guest of honor’s meal.
The Suggested Answer
Such a simple situation demands an answer! But how might we proceed? There are two big steps that can make a drastic difference.
The first step has to do with the problem of disparity. Often, people end up ordering items that cost vastly different amounts. While it’s nice to have choice, it’s worse that everyone ends up with a wildly different amount that’s owed. This confusion is what allows cheaters to conceal their motives and pay less.
Thus, the first step is to make everyone happier by offering a reasonable menu. The most practical way is to call the restaurant and see if you can make a special fixed menu. Some restaurants will print you small menu cards to make the occasion special. But don’t worry if they don’t–just make your own menu. Select a few reasonably priced items and design your own menu to hand out to guests.
The second step is to assign one person as the money collector. Preferably this takes place before any one eats food. This guarantees guests have money, and creates an incentive for someone to collect fairly. In large parties, you could even offer to compensate this person a few bucks from the group. I am sure everyone would be willing to willing to spend an extra dollar to ensure the party atmosphere is good. If your party does not have an organizer, volunteer! People will be happy.
Here’s how the solution might work in practice.
An example calculation
Let’s say you have 10 guests, plus one birthday boy. You want to go to Gordon Biersch, a brewery restaurant.
They have lots of food on the menu. I count 13 starters, 12 salads, 10+ pizzas, 5 steaks, 6 seafood dishes, 5 specialties, 9 pastas, 14 sandwiches, and 5 desserts.
There is a large difference between a $10 burger and a $27 steak, so you can already see that a free-for-all “split-the-meal” is going to be a disaster. And I didn’t even mention the drink menu.
Here’s one way to proceed.
Step One: Create a reasonable fixed menu
Choose 3 garlic fries starters for everyone to share.
For drinks, allow people to order a soda or beer. Avoid complications like sharing wine.
Limit the menu to pizzas (except do it yourself) and sandwiches. The price range is $9-$12.25.
Choose 5 desserts for the table to share.
Step Two: Estimate costs and collect the money in advance
I will round some costs up to be safe.
3 garlic fries 3 x $6 = $18.00
11 entrees 11 x $12.50 = $137.50
5 desserts 5 x $6.25 = $31.25
2 beers for birthday boy 2 x $5 = $10.00
Total common = $196.75
Tax + Tip (8% +18%) = $247.91
Per 10 people (treat the birthday boy) = $24.79–>round to $25
The only difference in what people pay is the choice of drinks. I think sodas cost $2 and beers $5. I’ll add tax and tip and do some rounding.
Soda: Contribute $28
1 beer: Contribute $31.50
2 beers: Contribute $38
n beers: Contribute $25 + $6.50 n
That’s it! Collect money in advance, and you’ll have every thing covered.
Step Three: Send everyone an email
The dining problem is about expectations and information. Get every one on the same page before the party starts. Here’s an email you could send to all your attendees:
Hi everybody,
We’re going to be celebrating Dan’s birthday party next Friday at Gordon Biersch.
Because we have a large group, I want to coordinate the food and cost in advance so the party runs smoothly.
For the entrée, we request you order a pizza (except “make your own”) or a sandwich.
For the appetizers and desserts, I will order a few for the whole table to share.
As for paying, we’re going to split the costs (and pay for Dan’s meal). This should be fair because the pizza and sandwich entrees are similarly priced. It’s not perfect, but it will make collection easy.
I’ve estimated the costs and have a very good idea of what you’ll need to pay. The only difference is what you decide to drink. Here are the estimated costs:
No drink: Contribute $25
Soda: Contribute $28
1 Beer: Contribute $31.50
2 Beers: Contribute $38
n Beers: Contribute $25 + $6.50 n
Please pay me in cash before you start eating. In the unlikely event we’re short, I will ask everyone to chip in an extra dollar or two. Please don’t run to the bathroom when it comes time to pay the bill 
Let me know if you have any questions…
Under this solution, people will roughly pay for what they order, it’s easy to collect and enforce payment, and a good time should be had by all. No one will be surprised by the $25 minimum cost. Big spenders can order more beers for themselves.
Some of you might be thinking, “What, no wine? No steak?” I agree the choice is limited. But I think people are willing to give up a little choice in exchange for everyone having a good party. This is because parties are not about getting exactly what you want–you can do that on your own time. It’s about coordinating a large group.
Do you have another solution to the dining problem? Please share in the comments and I’ll post the best ideas.
Great Reader Ideas:
In the comments, there are a bunch of good ideas. Here is a sampling.
Anna suggests a much simpler email with the same message:
Why not just say “we have a prix fixe options arranged with the restaurant including a chicken dish, pizza, and vegetables and one alcholic beer/wine or non for $25 including tip. Family style. Extra drinks are on your own.
Eric Wu finds my email too commanding, and offers a way to allow for wine purchases:
It seems a bit too commanding and even a bit irrational to limit the choices to a select few within a certain price range. To me, the basic problem is the ordering if shared items such as bottles of wine or appetizers, which are the only items that need to be limited. Here is my solution:
1) Pick someone who is honest and very good at math, adding 25% to your items ordered is not difficult. He will divvy up the bill for everyone but himself.
2) Pick another person to collect the cash and divvy up the first person’s bill All excess collected funds go to the server. This is so no one has incentive to over-collect.
3) Limit the choices for appetizers to group/table appetizers and then order wine by the glass.Definitely will not be as quick to collect if the person in charge is not good at math, but it allows everyone to order what they want, and everyone ends up paying the proper amount. Though the appetizers still cause problems because of the incentive to eat a lot of the appetizers and then eat a smaller meal. A solution would be to have the server divide the appetizers evenly.
Nick Eastop discusses a very cool mathematical method that seems to work out quickly:
The “Chris Dicken” method:
Everybody estimates on a scale from 1 to 10 what level of consumption they had. 10 being somebody who ate and drank a lot and had expensive dishes and 1 being somebody who only had a starter and a glass of water. It can be quite amusing discussing the different levels, but surprising in how quickly a consensus can be reached.
All the “level” numbers are added up and the bill is divided by the figure reached. This give a “unit”.
Each person pays the unit multiplied by his “level” plus a small percentage for whatever tip is appropriate.
I travel a lot with an orchestra and frequently eat in restaurants with groups of all different sizes. After trying this method for a while, everybody who tries it agrees that it is easy to use and a lot fairer than simply splitting the bill as we had done for years…..
Links:
In researching this article, I came across a lot of interesting web articles. The first New York Times article is where I got the idea to limit the menu. The rest of the articles share some popular opinions.
New York Times: You Do the Math
If it’s a fancy place, consider limiting the menu choices ahead of time to several reasonably priced alternatives and house wines, perhaps to be printed on a keepsake placard. If you have piles of money, consider paying for everybody. If you don’t, consider disclosing a rough price of entry ahead of time. And if that is exceeded, suck it up, because the alternative is just unpleasant.
The Onion: Caltech Physicists Successfully Split The Bill
“Before the arrival of the check, several early bill-splitting theories were proposed, including a simple process of dividing it into eight identical fragments, the Random Contribution Model, and a theory posited by Newbury himself—who insisted that he was bound to treat everyone—which was widely rejected on the basis that it would undermine the whole objective of the evening.
“When the check came, we all immediately agreed that the total of $284.57 could be defined as an irrational number of dollars for a party of eight to spend at a chain restaurant,” said Dreyfuss.
Money-Grubbing: An interview with Uri Gneezy, UCSD Professor
Also, culture can matter. In Germany, for example, they count down to the last penny. In Israel, if you do this, it’s not a good way to go around. You’ll get a very bad reputation for calculating up to the last cent. The cultural issue is very important.
But I Only Drank Water! Do you have to split the bill?
If everyone pays only for what he or she orders, then when the check comes, guests get tangled in petty calculations. Inevitably, someone miscounts how many beers he had, or doesn’t put in enough for the tip, or forgets to chip in for the host’s share. Worse yet, fussing over the details of the bill makes you look stingy. Dan Rubin, a spin instructor in San Francisco, says: “Why spoil a great dinner quibbling over awkward minutiae like who had three beers and who had one?” Rubin isn’t wealthy, but he finds this so distasteful, he says, “It’s worth me spending the extra $25 or whatever to save my reputation.”
But I Only Got the Soup…
Personally, I am with you. Establish a grand total, including the tip. (You would be surprised how a group is all too happy to have someone be the designated bookkeeper at times like this–might at well be you.) Split the check by the number of people. Couples pay the two-fer rate, singles pay the single rate. Easy. Except when seven credit cards get tossed at the server. “Put $50 on this Amex, $22.50 on the two Visas,” and so on. Such a pain.
New York Times: A Measure of Guidance: Dividing the Bill
If one person or one couple has ordered significantly more expensive food or had much more to drink, it’s ideal if he, she or they bring up the subject of bill division and volunteer to pay a bigger share of it.
And if the discrepancy between that higher share and the lower share really isn’t much, it’s sweet of the lesser spenders to reject the offer, stave off the arithmetic and suggest a straightforward division.
These are social situations, after all. They’re not algebra classes.
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77 Responses to “Splitting the bill at restaurants using game theory”
I see you neglected your own Rule of 25. I figured that’s because you weren’t doing the calculations on the spot. Also, are those personal pizzas, as opposed to a big pie?
By Erik on Jan 29, 2008
I would easily pay a couple extra bucks to avoid that effort, but then again that’s pretty divergent to your mantra.
I can’t say this is even an issue for me though. I think for the most part everyone understands the pitfalls of splitting the bill. So it’s avoided unless the individual sums are comparable.
By Joon on Jan 29, 2008
I have forwarded this to a couple friends and, no offense, we feel like this solution, while perhaps the most fair would also please the least number of people.
People relish choice when dining and most people I know expect to pay a disproportionate amount for birthday dinners.
A better solution might be to avoid these events and so something more intimate with the guest of honor at a later date.
By Mike on Jan 29, 2008
@Mike – Well…why not let people pick items beforehand, most places have an online menu, usually with prices included. Also, pre-paying cuts into the “just one more drink” attitude that often leads to bad decisions and can help save you bail money.
By RohoMech on Jan 29, 2008
@Erik: Yes, I used the less common rule of 26 since I had a spreadsheet handy. The pizzas are personal, I think.
@Joon: First, I would gladly take your couple extra bucks and be the party organizer. Second, I’m more worried about the $20 discrepancies these parties cause than the couple bucks. Third, people do understand the problem of splitting the bill–but the research shows people *still* take advantage of the system. It’s like people who know cheating is wrong, but will do it if they think they won’t be caught.
@Mike: So you see the point–the people who don’t show up for a *fair* solution are obviously the ones who want to cheat! But I agree; there are other ways like doing some thing nice with the guest of honor at another time.
@RohoMech: Good point. Each person could pre-order too and just pay what is owed.
By Presh Talwalkar on Jan 29, 2008
I’ve actually seen one restaurant that allows you to split one item across several checks, although the classier ones definitely wouldn’t – Melissa and I were amazed one day to discover that you could split appetizers across bills at Buffalo Wild Wings.
By Christina on Jan 31, 2008
@Christina: That’s good to know. Seems like some restaurants have already come up with solutions!
By Presh Talwalkar on Feb 1, 2008
Thank you for a great overview and real strategy ideas for how to split bills. I personally use billmonk http://www.billmonk.com and which allows for an easy split, or itemization for large items.
By Sean Oliver on Feb 10, 2008
Pal….you are nuts.
By Oldtimer on Feb 10, 2008
The problem with economists is that they can only solve for economic efficiency, and so that’s what they do.
My goal when I go to dinner with my friends is to enjoy myself. Unless extreme, whether I pay more then I receive in food is trivial compared to the enjoyment I get from the gathering.
To “optimize” completely, do you suggest calculating each person’s ability to pay by pro-rating based on discretionary income? Inviting my friends out to dinner in order to audit them sounds like a jolly time, no?
By Richard C Haven on Feb 10, 2008
It seems to me that limiting the options beforehand feels a bit overbearing or maybe even cheap.
Do people really like it when somebody emails them ahead of time saying you can only order X, Y, and Z?
By anon on Feb 10, 2008
Unfortunately, game theory offers an impoverished view of the agent. True incentives are not quantifiable, and are therefore disregarded by numerical approaches to understanding human behavior. For example, when I go out to dinner with friends, we understand it not as three self-interested agents attempting to maximize our individual gain from the experience (or minimize our loss), but as a community event where the participants engage in mutual cooperation from a position of altruism and respect–and to just have good time without cold, rational calculation. The rational choice paradigm is viewed by many ethicists as a somewhat abhorrent ethical model to base our actions upon, and one that is empirically unjustified in attributing to agents.
By Jem on Feb 10, 2008
With groups- my wife and I have tried multiple methods- and inevitably there are some who want to calculate to the penny, some who just want to split amongst all diners, and various other methods.
However, when we dine with close friends, we always split evenly. Sometimes we may order more, sometimes we may order less. And since we dine together fairly regularly- it all evens out enough for us all.
By Mapu on Feb 10, 2008
@Sean Oliver: Thanks for the pointer to Bill Monk.
Per the other comments, I agree with close friends it really doesn’t matter how you do it.
I worry about large groups of people who don’t necessarily care about each other. Like at an office gathering, or a large birthday party. Those are the times that scream for better outcomes. In fact, I mentioned that I use “pay for what you order” with friends and it usually works out.
I only suggested IF you want better outcomes, I offered a proposal. It’s not perfect, but if you have a better idea, please share so we all can benefit.
By Presh Talwalkar on Feb 10, 2008
Know your friends. Pay for what you ordered. If somebody’s got a budget or issue, everyone else can chip in a couple of bucks more.
If this is ALL a problem, you need new friends. No?
By CJ on Feb 11, 2008
ha, interesting. To those poking fun that the author should be enjoying his dinner rather than thinking this, know that many a classic problem or even new problems have been solved this way making large impacts on life. Consider Hamilton known for the famous quaternions to which he discovered whilst walking around with his wife. http://math.ucr.edu/home/baez/octonions/node24.html
I eat with Chinese folks quite often. At a Chinese restaurant we eat family style and split the bill based on number of adults in each family. Thus it is bill total/n and your family pays m*n where m0 here.) Children are not counted in each family as long as they are under a certain threshold age, of which I don’t know as of yet as we all have toddlers currently. I call this the ‘mutual fund’ approach to paying the bill,the toddlers I suppose represent fees, hehe. Anyhow, Chinese prefer variety at dinner and this style encourages this further they have had a few years of practise at it and therefore very rarely is any food left and all parties have ate their full. The only disadvantage would be if one member at the table is a very big eater, this person is usually invited only once.
DK
By dk on Feb 11, 2008
I’m a server, so from the backend of experiencing these type of events, big parties can be a pain in the butt.
When theres 15 people and everyone wants separate checks, this can be good and bad. If one guy wants to buy one other person a beer, it has to go on his tab. Also, when 15 people all do separate checks, usually your tip goes down. When the average check is 15 dollars, and people tip 1-4 dollars, you make end up making a lot less than you would if there was one big check for a 100 bucks and getting a 20 dollar tip.
Often times to be fair, splitting the check individually us fair on everyone, with everyone contributing a couple of dollars to cover the birthday guys meal. Or another way people often to do it is that they’ll split up the check into groups of 3 or 4, one person in the group getting the whole check for that group, with the promise of someone else getting it NEXT time. But then if you have a jerk in your group who will conveniently forget that its his turn next time, that can suck. My suggestion would be to weed out the jerks in your group of friends.
By Jen on Feb 11, 2008
No wine as an option up front, where do you come from? Why not just say “we have a prix fixe options arranged with the restaurant including a chicken dish, pizza, and vegetables and one alcholic beer/wine or non for $25 including tip. Family style. Extra drinks are on your own.
Maybe its just the way its worded, but I would not wan to attend something that sounded as complicated as your email did.
We usually state at teh beginning the deal. split , or split plus unless you order more than one alcholic drink or something over $30, then you pay more. or pay for what you order. If someone orders a bottle of wine, they should be the ones to make sure those drinking the wine will go in the bottle before ordering… Sure, its awkward, but who cares. The cheap ones wont touch it. Or just dont invite those cheap friends!
By Anna on Feb 11, 2008
@dk: Fascinating story of Hamilton. My high school calculus teacher vaguely mentioned it, but I never followed up. Thanks for the link! Your method for splitting at Chinese restaurants is interesting, but I’ve already read stories about people complaining about paying for other people’s kids–I guess it comes down to having good friends again.
@Jen: Thanks for sharing a perspective from the server side of the matter. Sounds like separate checks is more work for less tip; quite the raw deal.
@Anna: You’re precisely right; my email was complicated. Your wording is much better–thanks. I’ve added it to the article
By Presh Talwalkar on Feb 11, 2008
It seems a bit too commanding and even a bit irrational to limit the choices to a select few within a certain price range. To me, the basic problem is the ordering if shared items such as bottles of wine or appetizers, which are the only items that need to be limited. Here is my solution:
1) Pick someone who is honest and very good at math, adding 25% to your items ordered is not difficult. He will divvy up the bill for everyone but himself.
2) Pick another person to collect the cash and divvy up the first person’s bill All excess collected funds go to the server. This is so no one has incentive to over-collect.
3) Limit the choices for appetizers to group/table appetizers and then order wine by the glass.
Definitely will not be as quick to collect if the person in charge is not good at math, but it allows everyone to order what they want, and everyone ends up paying the proper amount. Though the appetizers still cause problems because of the incentive to eat a lot of the appetizers and then eat a smaller meal. A solution would be to have the server divide the appetizers evenly.
By Eric Wu on Feb 12, 2008
The “Chris Dicken” method:
Everybody estimates on a scale from 1 to 10 what level of consumption they had. 10 being somebody who ate and drank a lot and had expensive dishes and 1 being somebody who only had a starter and a glass of water. It can be quite amusing discussing the different levels, but surprising in how quickly a consensus can be reached.
All the “level” numbers are added up and the bill is divided by the figure reached. This give a “unit”.
Each person pays the unit multiplied by his “level” plus a small percentage for whatever tip is appropriate.
I travel a lot with an orchestra and frequently eat in restaurants with groups of all different sizes. After trying this method for a while, everybody who tries it agrees that it is easy to use and a lot fairer than simply splitting the bill as we had done for years…..
By Nick Eastop on Feb 12, 2008
as a Food and Beverage Director i am always working with the Banquet Coordinator and the service staff to find better ways of serving people who desire split checks, including buying a very expensive POS that allows us to split bills in any way a guest desires – however it still seems most desirable for all involved to keep the bill together. in most environments the split check will have service staff flag you – they can make more money with less hassle elsewhere. when i served i knew you weren’t going anywhere anyway.
if every group had a leader as thoughtful as you that paradigm might be changed. but i won’t hold my breath.
By nok on Feb 12, 2008
@Eric Wu and Nick Eastop: Interesting ideas. I can see how they would work with close friends, especially Nick’s idea, but I’m worried about birthday parties where you have to cover someone.
But I’m certainly not the final judge: I included your suggestions so we’ll see what people think about them
@nok: I agree that one bill helps everyone in terms of it being a less hassle.
By Presh Talwalkar on Feb 12, 2008
I have really enjoyed reading through all of these posts. My husband and I go out often and sometimes to meet people we have never met before so impressions are sometime awkward when it comes time to pay the check. While we would like to treat or be the really generous one it is not cost efficient.
I have found it is cheaper to stop the server for a second and tell him/her that we will need separate checks early on while giving them a little extra tip with the request. This lets them know to ask which check shared items go on and prevents the flagging that the table is more trouble than it is worth.
It has worked in the past and my server brother loves the idea.
Just my 2 cents… September
By September on Feb 16, 2008
There’s a very simple way if you have a crew of people you regularly go out with. Rotate who picks up the entire bill each time. Everyone gets what they want, and you only have to pay once every few times, depending on how large your crew is.
By Tyler on Feb 17, 2008
@September: Thanks for sharing your tip. I like how your answer displays good etiquette and I’ll keep it in mind when I meet people in small groups. I only wish it were more scalable to larger parties.
By Presh Talwalkar on Feb 17, 2008
@Tyler: It’s definitely a method that works for reasonable people, but I’ve had friends who tried this but I’ve noticed someone usually ends up complaining about always paying at the more expensive places. I have heard it works well for people in serious relationships where both parties want to split things equally (though I don’t think splitting equally is a common arrangement for most couples).
By Presh Talwalkar on Feb 17, 2008
I am looking for personal opinions on this situation, so please email me. THanks.
9 women have lunch at an upscale restaurant. They want the waitress to supply 9 separate checks. The waitress is put out but still polite. The group leaders ask the waitress to send over the owner and the owner sits down and goes through the whole bill, asking each one what did they eat and drink and adding in their tax too. Each paid either cash or asked the owner to have the waitress take credit cards for their individual amounts.
The group leaders told the waitress that they will never come back because the waitress told them normally everybody squares up as a group and figures it out. The group leaders insist that it was the waitresses job and that the restaurant is not doing their job. I say everybody should have brought small cash and kept track of their own. It was such a silly scene and I think it was rude to give the restaurant a hard time.
What do you think?
By faith on May 12, 2008
Faith: It appears the story was about miscommunication that unfortunately escalated.
Here is how it could be made better:
–The waiter could have listened and split the bill. If customers ask for something the restaurant offers, it’s not a waiter’s job to make the judgment call.
–The owner could make a policy of not splitting checks. I’ve been to places like this, and it’s understood, so customers come prepared.
–The customers could have been sensitive. I recently was in a group of 9 where we considered paying cash and credit. But we realized it was going to be a big hassle and we didn’t want to impose on a busy restaurant. So we split the group into three credit cards. Those people were paid back in cash by other group members.
Ultimately, dining is about having a good time, so I think it’s best to pay quickly, however that can be achieved.
By Presh Talwalkar on May 13, 2008
Nine separate checks? Are they serious? Who cares if they are put out: give them one check and hope never to see them again.
An on-line/mobile application like scred.com can make it easy for people who share bills to keep track of each member’s balance.
By Richard C Haven on May 13, 2008
Richard C Haven: Thanks for the suggestion; scred looks promising.
It actually makes me think about biometric systems: eventually, bills could just be paid by your fingerprint, which would activate an electronic transfer from your bank account. In restaurants, tables could essentially be given a mini-computer and divide the bill however they want so long as the whole balance gets paid.
Biometric payment was tested in Illinois grocer stores (pay by touch), but it probably failed since not enough adopted.
By Presh Talwalkar on May 13, 2008
I frequently run into an issue where no one at the table has cash or small bills to appropriately split the bill to their individual share. Someone ends up having to find a pen and we all write our credit card share on the back of the bill. While waiters don’t like taking multiple cards, these days it’s pretty quick to do, so they will go ahead and do it. My idea was to have a small white space on the credit card where you could write down a number using a dry-erase marker so you can write your total on your card. I’m sure restaurants that run into the credit card split often can provide dry-erase markers and it becomes easier for the server to match cards to numbers.
By Anand L. on Jun 4, 2008
Anand L.: This is an excellent suggestion. A similar idea is to have a wireless swipe at the table. I think something like this is available in Europe…
By Presh Talwalkar on Jun 4, 2008
What we generally do is one person pays at the party and the next day a common mail is sent out to everyone with the entire bill so that everyone knows how much they have to pay and they give the money to the person who pays the bill at the party….this generally is amicable to everyone and avoids the awkwardness in these kind of situations….and instead of having the same person pay at every party, every time a different person pays…
Sagar.
By Sagar on Aug 24, 2008
I have another idea. How about defining a maximum amount that can reasonably be spent, e.g. $50 per person, as the limit? Ask everyone to bring a $50 note to the party, and nothing else. Let’s say you have a party for 10 people.
Go to the local bank and get 10 times 50=500 dollars in one dollar notes. Put this in a big glass ball so that people can easily pick from it.
When they arrive, collect the 50-dollar notes from everyone (except the guest, if any). Then they would start ordering on separate bills (it’s easy to pre-print a sheet with as many columns as many guests, or restaurants with POS system can do it electronically, or 1 person, the organizer brings about a notebook with an excel sheet, etc). In China they have a better system, a paper sheet that is put on the table, so people can see what they have ordered, and waiters would stamp on that sheet when they delivered the food listed on it.
So everyone knows what they have ordered, compared with that $50 that they pre-paid. Commonly shared items, like wine and others would be automatically divided by the number of people drinking (e.g. a group of 10, 3 say they cannot drink alcohol (driving?), then divided by 7). This can be done quite quickly with an excel sheet, most POS has this feature built-in (I think), but even doable on a piece of paper, not much math needed for it. Also, the guests’s bill can be divided by the rest of the people and added to the bill quickly, at the end.
At the end of the party everyone would know exactly how much they ordered, and decide how much % they want to give as tips (taxes would be added on top, if necessary). So, let’s say, everyone pre-paid $50, and people really ordered say $15, $38, $45, $20, $50, etc. The differences between 50 and the actual amounts could be calculated in a second using a notebook, but everyone would already know this, because they would have that personal sheet in front of them, showing exactly how much they ordered. So, the people would expect their change returned: $35, $12, $5, $10, $0, etc.
At the end of the party, before leaving, everyone would collect their change from the big ball. Whatever amound is left in the ball belongs to the restaurant.
Advantages?
1. Since everyone has pre-paid $50, they know they capped their max spenditure at that level, so they wouldn’t worry that someone will spoil the evening by ordering the most expensive steak from the menu.
2. Having a sheet in front of you makes your ordering transparent for you, your mates and for the restaurant, too (no wonder the Chinese use this method, they have experience in treating large crowds).
3. Easy on everyone: everyone can order whatever they want, freely. No limitations. The restaurant is pre-paid, so they wouldn’t worry that 10 people stand up and leave and leave a big debt behind. Psychologically, prepaying makes the restaurant live up to the expectation (“Pygmalion effect”), so the portions may be a little bigger, the steak a little juicier, etc. The restaurant knows that this party is a max $500 event, so they can do the math.
4. Restaurants will LOVE you for the hordes of $1 bills. They often need lose change and are short of it. Your party will deliver them plenty of them, and they will BLESS you for it.
By Zsolt Barczy on Aug 31, 2008
By Zsolt Barczy on Aug 31, 2008
Yeah, but that takes planning and effort. If you all are into that, great, but for some people, that amount of organization takes away from the ease and comfort of going out after a long day of work.
Cheers
By Richard C Haven on Sep 1, 2008
I was thinking about a once-in-a-year kind of event, not an everyday party… something for something: if you want to assure fairness and fun, I think that much preparation is not a high price to pay.
By Zsolt Barczy on Sep 1, 2008
Zsolt Barczy: This is definitely worth a try. I imagine it could be fun with the right kind of group.
An add-on: imagine making a pile of $1 bills as the “tip” for your waiter to see. Tell the waiter the tip pile can be increased or decreased based on how nicely you are all treated. I bet you will get the best service of your life!
By Presh Talwalkar on Sep 4, 2008
“imagine making a pile of $1 bills as the “tip” for your waiter to see. Tell the waiter the tip pile can be increased or decreased based on how nicely you are all treated. I bet you will get the best service of your life!”
Or the worst. Waiters know that you control how much you will tip them, whether it be in cash or on a credit ticket: the sight of $1 is unlikely to excite anyone over the age of 10. It might appear that you are treating the waiters as if they were 10, and your service might be an appropriate response to that.
Cheers
By Richard C Haven on Sep 6, 2008
Richard C Haven:
Haha, yes. I meant to write that comment sarcastically. I was in fact once at a dinner where someone suggested a “tip pile” and vetoed since it doesn’t treat the waiter with dignity.
Incidentally, I ended up overpaying big time at that meal to cover other people who didn’t tip. It made me think there has to be a better solution, and was part of the inspiration for this very article
By Presh Talwalkar on Sep 6, 2008
I don’t like the tip pile. Definitely demeaning. I’ll go one further and state that I don’t like variable tipping at all! I read this once: Always tip the same percentage. (However much happens to be customary in the country.) If the service is especially good/poor, tell the waiter or even his manager. Usually you’ll get comped on the spot. You’ll have shown that you’re a good, paying customer. Remember also that often restaurants split tips among other waiters and even among the dish washers and cooks that you didn’t meet but may have done an excellent job! As for good work, a positive comment to your waiter or having him pass one on to the chef might be the best part of his day, way better than just another fiver.
By Eyal on Sep 7, 2008
Here’ show we’ve done it in the past.
Credit Card roulette:
Everyone over-orders and over-orders BIG!
Everyone passes in their credit card – hopefully the one with the highest limit!
A neutral party (the waitress usually) draws the cards out one at a time.
The last card drawn is stuck with the bill.
D’oh!
This doesn’t optimize your original problem, but it sure creates memorable parties!
By ou4blood on Oct 2, 2008
ou4blood:
Haha–sounds like something that movie stars or investment bankers would do. I’ll have to try it some time with a small group and a reasonably inexpensive restaurant.
By Presh Talwalkar on Oct 6, 2008
>They have lots of food on the menu. I count 13 starters, 12 salads, 10+ pizzas, 5 steaks, 6 seafood dishes, 5 specialties, 9 pastas, 14 sandwiches, and 5 deserts.
Gee, I’m not sure I’ve ever seen a desert on a menu before. Do they ever have any other terrain features?
By John Maxwell on Nov 11, 2008
If you are in a repeated-party situation, one possible solution is for everyone to take turns treating everyone else.
By John Maxwell on Nov 11, 2008
John Maxwell:
Good point about repeated games. I think most groups of friends do rotate tabs and find ways to keep things fairly even. This is not the case for big parties (who’s going to cover that $1,000 tab?)…
And thanks for pointing out the typo in such a humorous fashion…seems like I forgot to mention the rocky road ice cream and hurricane drinks they offered. In any case, it’s amazing that typo got past me plus the thousands of readers who did not point it out…Oh, the joy of web 2.0
By Presh Talwalkar on Nov 12, 2008
We just finished a “bookclub” dinner of 10 women last night. We ended up splitting the bill evenly. It was not completely even division, but aside from ruining the moment and fun and listing out the bill, I proposed we split it. No one complained and all agreeded. Now I have a girlfriend who feels guilty that her three new friends to the group ended up paying more then they ate. When I asked the group about the bill at the end, everyone agreed. Should I worry or just let it go?
By SnowChic on Nov 23, 2008
This is the comment thread that will not die!
SnowChic, you should not worry about it at all. It sounds like your friend is being overly sensitive/overly concerned. I’m sure she’s coming from a good place, but don’t spend too much time thinking about it — I’m sure her guests haven’t.
By Mike on Nov 23, 2008
I am reminded of Shakespeare who wrote “What’s done cannot be undone.” It is too bad they did not speak up during the payment period when the problem could have been readily fixed. Now sorting the finances would be messy socially, so best to let it go.
By Presh Talwalkar on Nov 24, 2008
If I got such an email from someone I would probably remove them from my christmas list and wonder why I ever became friends with them in the first place. I will not go to a party with someone who uses ‘beer’ as a coefficient in an equation and won’t let me have a steak so as to minimize the size of his spreadsheet.
By ed moore on Nov 26, 2008
You left out the REAL problem with splitting bills:
NOBODY HAS ANYTHING BUT 20 DOLLAR BILLS
Invariably everyone looks at the check and then you end up with a pile of 20s on top of it.
“Excuse me miss, could we get our change as ALL singles? No, I’m not going to a strip club later…”
Fun article to read. I definitely look for higher end buffet or prix fixe deals when a lot of people are involved. Quite recently we had the doomsday setup for my brithday, 8 people plus them paying for me, so the uneven split. We went to a Brazilian Churrascaria which is a 30 dollar all-you-can-eat setup. I then ordered a few pitchers of sangria and filled up everyone’s glass. Then at the end, they split it.
In simpler 4-person dinners with close friends, we often take turns randomly footing the whole bill. It’s kinda like credit card roulette without the “oh I’m off the hook” phase that encourages wastefulness.
By Joe on Nov 26, 2008
alternatively, you could just not go out with arseholes who don’t over-order and just split the bill.
By mj on Nov 27, 2008
The problem of “only 20s” was really bad in college. Everyone got money from the ATM and it was impossible to pay for late night pizza…
Nowadays, we just seem to owe each other a few dollars here and there and it seems to work out.
At a party, it might be a good idea to have someone go to the bank and get a bunch of singles in advance.
By Presh Talwalkar on Dec 2, 2008
Just found this discussion via Cosmic Variance.
In (physics) grad school, my friends and I came up with a two-pass solution which was almost as easy as splitting the bill evenly and almost as fair as each-pays-his-or-her-own, with the bonus that it was really hard for someone to cheat and decide that 5% was a sufficient tip.
First, each paid in the menu cost of his/her food and beverages. These are easy to add up; round up to nearest $0.50 if necessary. Then the tax, tip, and any shared items (and the costs for a guest of honor, if applicable) are split evenly between all diners. This ensures a consensus value for the tip, without anyone feeling compelled to chip in yet more to make up for a cheapskate.
By thm on Dec 19, 2008
Re: The two-pass solution
How is each person calculating the cost of what they ordered “…almost as easy as splitting the bill evenly…” ? That IS the hard part.
What if one forgets? What if the total amounts don’t add up? What if the “cheapskate” does not want to tip well? What if one does not want to focus on who ordered what rather than enjoying one’s friends?
Forgive the descent to stereotype, but physicists are known for their attention to detail at the expense of the obvious: conviviality is more important that the optimal payment solution.
Cheers
By Richard C Haven on Dec 19, 2008
“It’s probably because they know people order more on a common bill, and it’s somehow seen as less “classy” to offer separate checks. I don’t totally understand it, but I have been rejected by at least one snobby waiter (Oh, no, no, monsieur, we don’t do that).”
At least snotty waiters make calculating the tip easier, as everyone can multiply by zero.
By Lab Lemming on Dec 19, 2008
Dan Rubin’s point from the body of the post: “Why spoil a great dinner quibbling over awkward minutiae like who had three beers and who had one?” Rubin isn’t wealthy, but he finds this so distasteful, he says, “It’s worth me spending the extra $25 or whatever to save my reputation.” ”
Generally, this is true. However, at work dinners, everyone is white, middle-class, male and likes steak and alcohol. I’m a vegetarian who barely drinks. Instead of subsidising, since I’m only 1 in a large group, it takes relatively little time for me to identify my expenditure, and leave everyone else to quibble over their bill-splitting.
Another point I’ve often noticed – if I pay by card, I tend to pay more than I wanted to. If I pay by cash, I can put exactly what I want into the pot, and leave the card-payers to “top-up” as necessary, since the will be the last to pay (first mover’s advantage)
By pratik on Dec 26, 2008
Why not just go out with friends that have roughly the same idea about food and drinks?
)
We never have a problem as we all love big steaks and lots of wine
By Mario on Jan 28, 2009
Sooo much easier when the TAX is included in all prices and Tipping here is for better than average service not an expected. And yes I do tip, but not for someone just doing their job. From what in seen and heard the wages here are high enough to make the need for tips to be a necessity. If the restaurant wont take the time to work out separate quantities then that it is their fault/problem for not allowing separate bills.
By Mark on Jan 29, 2009
I like steak and wine. Nooooooooo to this system.
By K-Diz on Jan 30, 2009
If I got an email like the one in the article, I would not go. If the occasion was that important, I would go, and have my own bill.
I like steak, I rarely have starters, never have desert, do not drink wine, am not a big beer fan, but love a good single malt scotch. limiting my choice like that is a no no.
I think the whole thing is a USian trait. I worked in a pub once, in London. USians would come in as a group, and each order their own drink. Jeez.
The custom here (UK) is to do rounds. Alternatively, you have a whip. This is where everyone chucks in £x, and the drinks are paid for out of this kitty. When it runs out, whoever is still around chips in again.
When my friends and I go out, we split the bill evenly. It all works out in the long run. Sometimes you pay more, sometimes less. Like one of the other commentors noted, $20 overpayment is not enough of a reason to spoil a good night.
By Tapiwa on Feb 1, 2009
Seriously though, any method more complicated than split it evenly is too complicated.
One way to deal with the drink/no drink, is to have two bills … one for food, split evenly by all diners. The second for alcohol, split evenly by all drinkers.
If your friends are so greedy and cheap that this becomes an issue, either find new friends, or stick to all you can eat for £FIXNUM places.
By Tapiwa on Feb 1, 2009
It seems that you have re-engineered the *entire* dining experience for the sake of optimizing the efficiency and fairness of the paying sub-system. This may be an interesting academic exercise, but for me it totally misses the holistic view of dining out. When I dine out my objective function is to maximize enjoyment (of myself and the group), that will typically include such things as: order what-ever you fancy (not from a sub-set of the menu), be spontaneous (things don’t have to be agreed in advance). The payment sub-system is just one small part of this, and in your case, you are letting the tail wag the dog….
(BTW – I *love* optimizing things, I love efficiency, and fairness – but not at *any* cost)
On second thoughts – is this a joke? Have I been had?
By tom on Feb 1, 2009
I agree with not wanting to ruin the social atmosphere but I’m a poor vegetarian non-drinker and tend to lose out so I mostly opt out of group meal situations. I often say I’ll turn up for the coffee part and stay on for the after venue, if there is one, so I just pay for my coffee straight – easy.
When I do go out in a large party, I now try to make sure there’s a separate drinks bill, so that I’m just paying extra for the meat dishes that others have had. My drinks are usually water or paid for separately.
It is a social dilemma though and needs to be handled very carefully as people can display a serious lack of understanding and compassion for this.
By Ida on Feb 3, 2009
I’m a coeliac (I can’t eat gluten) I am also dairy intolerant. There are some restaurants I just can’t go to because they have nothing I can eat, but most have one or two dishes. By restricting the menu further as your method does I probably couldn’t attend. Even if you hadn’t, I like as wide a selection as possible. Not only does it mean I can only eat fries, but it means everyone else feels/guilty/sorry etc, which puts a downer on it.
With my friends, we use the everyone pays for their food method, everyone is expected to put more in than they ordered and the extra is a tip. This way you don’t need to worry about fiddly details.
By Sky on Feb 4, 2009
Wow. I found this site when reading about the game theory for a managerial economics class; never thought I would spend an hour of my time reading about splitting bills! BUT I’m glad I did.
As a social eater/drinker because of the MANY MANY problems discussed above, I prefer to go out with small groups of close friends that aren’t assholes (they are honest) & that have the same eating/drinking habits (typically ordering in the same price range & drinking a lot). These people are usually like me in that they are very sensitive to others paying too much or too little & the server being tipped too little, & so usually everyone is trying to pay more than their share so everyone is treated fairly. Going out in small groups means frequent dining experiences, so if I order more this time, I make up for it in the next round of drinks or the next shared meal.
I detest going out with large groups of people because of the likelihood of different eating/drinking habits & bill paying ethics.
As a server of years & years, however, I will say that I prefer one of three methods:
one person paying a common bill (the easiest)
splitting equally (the 2nd easiest)
separating checks (almost the same as the 2nd)
In certain POS systems, it is SOOO easy to separate checks. In most restaurants I’ve worked in, it’s already mandatory to have the beverages & food split among seats. It’s just a matter of putting seats on the proper checks. As an organized moderately intelligent person, it is much easier for me to separate the checks as needed than to let my guests do it. For them it requires calculation of menu prices, tip, & tax. For me it requires remembering what people had & moving items on a touch screen to match individuals & groups. And certain POS systems allow for separating items. This is also very easy. Meaning it is easy for me to split the guest of honor’s food & drinks among all guests.
That being said, I have done my best to educate my fellow servers to agree, that separating the checks is easier than allowing the guest to calculate it themselves. But they’re not all there yet. But again remember that some POS systems don’t allow for the ease that I’m claiming.
I actually believe that separate checks leads to a higher tip percentage. Since it’s quicker, it means higher guest satisfaction. Less work for them also contributes to higher satisfaction. Finally lower checks typically mean higher tip percentage. I.e. 5 $15 checks with $4 tip each is a total $20 tip. But if someone sees a $75 tab, they will tip 18-20% at $13-$15 instead. If someone has a lower bill, they often think that a $4 tip (actually almost 30%) is more reasonable than a 30% tip on a higher amount. This is why I would normally make more money bartending!
I actually see business groups playing credit card roulette a lot in my restaurant at lunch.
Now a few rules…
1. Never ask for separate checks & then everyone pay with cash & need change. It’s easier for me to take credit card payments than to get change for 10 $20s or worse 10 $100s.
2. Never ask for separate checks at lunch when no one drank alcohol & everyone ordered pretty much the same priced entree & the only real difference is water or soft drink ($2). This was probably the case with the 9 women mentioned earlier. Think about the menu prices before asking for separate checks. I’ve separated checks before for groups where everyone’s total turned out to be exactly the same.
3. Never ask for a common check & then write down names next to each item. This makes me have to separate checks anyway, therefore just adding an unnecessary step to the process of getting you on your way! We don’t mind writing down names & amounts. But not names & items.
I think that’s all for now. Even though I think some comments are way over-analyzing the situation, it’s nice to see that people are actually concerned about a fair & efficient solution.
By Jewel on Feb 18, 2009
I’m so amused that Americans still tell me they get better service in the U.S. than in Europe.
In Germany, the waiter will ask you, after you’ve eaten, whether you want to pay jointly as a group or individually. If the latter, he or she goes around the table and asks each guest what they had. Usually, a good waiter remembers anyway. The waiter does the math on a notepad (yes, the waiter can add up numbers, gasp) and tells you how much you owe. You give them the amount plus an optional tip. While the waiter does this, especially in a bigger party, everyone else can continue their conversation.
If you want to pay together as a smaller subgroup, no problem. Just tell them what the people had who you’re paying for. If you invite one guest, one other diner pays for that person, and then it’s sorted out quietly among the diners.
The biggest problem with splitting the bill evenly is not just that people are motivated to order more than they want. It is also that you have different income levels, different appetites, different moods of the day. Not only do some people overpay, a thoughtful better-off person who might fancy something expensive might refrain from ordering that item to avoid making poorer members of the group pay for it.
By Marianne on May 5, 2009
What would make one person think he should pay for everyones bill at friendly get togethers all the time . Why would someone feel this way? When they dont have more money then the other people at the table?
By mema on May 21, 2009
When splitting the bill becomes a … splitting headache
See document at: http://www.chicagocdr.org/cdrpubs/pdf_index/cdr_523.pdf
By Benjamin Vitale on Jul 5, 2009
I think that separate checks are really the way to go. I waited for a couple of years, and while it was something of a hassle to divvy up the checks, it usually resulted in a bigger overall tip so I didn’t mind. People tend to under tip on large checks and over tip on small checks, so several small checks is better than one large one.
By PohTayToez on Sep 27, 2009
Alt title: Because restaurants have a tradition of being understaffed, you get screwed out of money. Imagine if a grocer could get upset about having to ring up a few extra cards.
People complain about doing their job too much. Put it all on separate bills.
By Brandon St. Germaine on Sep 29, 2009