Cheesecake Factory Class Action: ‘Suggested Gratuity’ Bilks Customers

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A Cheesecake Factory customer says the restaurant chain has been duping diners into tipping at more than double the going rate when they split their bill.

Plaintiff Marcel Goldman says the defendant has been suggesting gratuity amounts vastly higher than what an individual diner should be reasonably expected to pay. Diners who rely on those suggestions end up paying twice as much gratuity as they mean to, and sometimes even more, she claims.

The suggested gratuities that appear on the bottom of guest checks issued by defendant The Cheesecake Factory Inc. allegedly represent the total gratuity for the entire bill, not the individual diner’s share of that gratuity.

Goldman says she fell for the alleged scheme herself. She includes in her complaint photos of the bill she received after eating at a Cheesecake Factory restaurant. The photos show she paid $15.40 in gratuity on her $38.50 share of the entire bill.

In these phtotos, the bill shows suggested gratuity amounts ranging from $11.56 to $16.94, supposedly representing percentages of 15 to 22 percent. It suggests $15.40, the amount Goldman paid, as a 20 percent tip.

But Goldman points out those suggested gratuities were calculated based on the entire bill amount. As percentages of her own share of the bill, they totaled to 30 to 44 percent, she claims. Because she relied on the allegedly erroneous suggested gratuity amounts, Goldman says she ended up paying far more in gratuity than she ever intended to.

According to this Cheesecake Factory class action lawsuit, the defendant has been printing suggested gratuities this way at more than 200 Cheesecake Factory restaurants and at 13 Grand Lux Café restaurants, which the defendant also owns. She estimates that at least a tenth of the bills paid by credit card at Cheesecake Factory are split among different customers, putting those customers at risk for over-tipping.

A recent Buzzfeed article notes Cheesecake Factory has also been called out for calculating its suggested tip amounts based on the total bill, including sales tax. Several Yelp reviewers dispute that practice, saying the gratuity should be calculated on the pre-tax subtotal.

Goldman wants to bring her claims on behalf of all Cheesecake Factory customers whose total check for their party was divided by the restaurant among members of their party, who were presented with a bill for their share of the meal, and who accepted and paid the suggested gratuity amount on the bill using a credit or debit card, all within the four years preceding the filing of this action.

She is asking the court to declare that Cheesecake Factory’s practice violates California’s Unfair Competition Law and to award damages or restitution representing the amount that she and her proposed Class Members overpaid based on Cheesecake Factory’s representations.

Goldman is represented by attorneys Julian Hammond, Polina Pecherskaya and Ari Cherniak of HammondLaw PC.

The Cheesecake Factory Miscalculated Gratuity Lawsuit is Goldman v. The Cheesecake Factory Inc., Case No. BC668334, in the Superior Court for the State of California, County of Los Angeles.