Gesturing, I caught the waiter’s attention to pay my restaurant bill. He hustled over and brought with him the now-ubiquitous handheld payment device. I tapped the prompts and noticed something unsettling. The suggested tip amounts—20 percent, 22 percent, 25 percent—were calculated not on the subtotal for the food and drink, but on the grand total, a number bumped by 8.625 percent state and local sales tax in San Francisco and, in the case of my burger, an additional 6 percent city-mandated health charge to help pay for restaurant workers’ health insurance.

This is a tip-on-a-tax, a surcharge on surcharges. Let me be clear: As a former waiter, I am not critical of the hardworking people who depend on tips. I once depended on them, too. I believe in tipping generously. My objection is to the software and the business decision behind it, which inflate the basis for the tip and, in turn, the swipe fees that go with it. This sleight of hand, much like shrinkflation, erodes trust by banking on the inattention we give to modern transactions. The solution is simple: point-of-sale (POS) systems should be programmed to calculate gratuities on the pre-tax subtotal. “No tips on tax” should be a principle of consumer fairness. READ MORE