I received this email message from a reader recently:
“I have a restaurant ethics question. Last night my husband and I dined at The Beauty Shop. We used a $75 gift certificate given by my parents. Our tab came to about $63. The very nice waiter informed us that, although he doesn’t agree with the owner’s policy, he can’t give us cash back or a gift certificate for the remainder. He said that he won’t receive the remainder either. We had planned to put it towards his tip. We decided to enjoy some coffee and cake and it all came out even, but we think it is a terrible policy and are not inclined to hurry back to any of (Karen Carrier’s) restaurants. Is this legal?”
I don’t think this is an issue of legality or even ethics but of policy. I called Kevin Keough, general manager of Beauty Shop, and asked him about the situation.
“Generally we don’t refund a small amount like that or write out a small gift certificate,” Keough said, “because it just creates an accounting trail that becomes endless. When people buy gift certificates, I encourage them to do it for smaller amounts or for, say, three $25 certificates, so that makes it more flexible. If someone comes in with a large gift certificate and spends only half of it or something, then I can write out a $30 certificate or whatever, but not a small amount. The latest version of a gift certificate is a card, like a phone card, and you just spend it out until it’s used up, but we don’t have that technology yet.”
So, readers, how do you feel about gift certificates and the way they’re handled (or mishandled from your perspective) in restaurants? Seems to me that since the restaurant has already been paid for that certificate, if the restaurant keeps that leftover five bucks or so, then it’s making undeserved profit. I want to hear from restaurant owners and managers on this subject too, so we get coverage of the issue from both sides.
Restaurant business
Responses to “Don’t Look a Gift Certificate in the Mouth”
February 29th, 2008 at 4:11 pm
Sounds like The Beauty Shop stole $12. And how do they determine what a “small amount” is? Is $20 a small amount? This doesn’t seem right at all.
February 29th, 2008 at 4:30 pm
Well, I see now that the patrons ordered dessert, so the Beauty Shop didn’t steal the $12, but they intended to, and if the patrons had been in a hurry and didn’t have time to order more food, they would have.
February 29th, 2008 at 4:40 pm
Does it create an “endless accounting trail” when they have to return change to a customer who’s paid in twenties for an odd amount?
“I don’t feel like being bothered with giving your change back” is not a valid excuse for bilking paying customers out of money, even if it was technically paid on a prior occasion. I’m fine with the alternative of receiving a smaller odd amount gift certificate rather than cash to ensure that I spend the full amount at their particular business, but refusal to do either would lose my business for good. And most likely that of the people who originally bought the gift certificate after I gripe to them about it.
February 29th, 2008 at 5:23 pm
The certificate, if it is indeed a certificate, should state on it what happens if the full amount is not used.
February 29th, 2008 at 5:27 pm
Gift certificates do create an accounting problem for businesses. Essentially they take in cash (an asset) and issue the gift certificate/card (a liability). Although they may get use of the cash until the gift certificate is redeemed, they do not declare that cash as income until the gift certificate is redeemed and the cash is applied towards the products or services rendered.
It is no less difficult to try to figure out how to account for the excess cash that you have from a gift certificate that is redeemed in excess of the bill (as in a $75 gift certificate being redeemed for a $63 meal) than it would be to either debit the cash account and credit the liability account for the $12 and return the $12 cash to the patrons, or debit the cash and credit the liability and issue a $12 gift certificate.
Just Jamie’s opinion here, but I would keep it simple if I owned the business…I would issue a new gift certificate for any balances over $10 and simply give cash change for amounts under $10.
One other solution…buy your friends a Visa or Amex gift card, and they can spend it wherever they please. This won’t necessarily make Ms. Carrier happy since the recipient of the gift card can spend it anywhere they want to, but if their gift certificate policy is going to be unfavorable to the recipient those might be the consequences.
On a side note, this is making me want to take a trip over to Do Sushi tonight.
February 29th, 2008 at 9:33 pm
What in the world is an accounting trail? The restaurant has been paid and has use of that money until the certificate is redeemed. It is a win-win for the restaurant. Many coupons are never even used for various reasons. The certificate should be good for anything the restaurant deals with, from food and drink to tips and taxes-they have already received cash. Restaurants should be required to give leftover credit in cash or via a new certificate. Anything less is fraud.
When I give a restaurant certificate it is because I want my recipient to go to a particular place that I like. A Visa/Amex card is not the same-I want my gift to be used for food not a teapot at WalMart.
Also, what is this junk about not having the technology yet? Most of the restaurant gift certificates I’ve bought in the last couple of years have been “swipe” cards that deduct the exact amount desired. Welcome to the 21st century, Beauty shop.
Also, too, certificates should never expire. A lot of restaurants will extend the expiration date but not all. It is illegal in California to set an expiration date-should be everywhere.
Maybe this restaurant would best be listed on a previous post concerning restaurant closings.
February 29th, 2008 at 11:39 pm
We had the same thing happen to us at another restaurant in Memphis. A real estate agent gave us a $100 gift certificate when we purchased a home from him. We invited another couple to join us for dinner. None of us drink so we only spent $78. When we gave them the gift certificate we requested that the balance be given to the server. The manager said they could not do that. They also told us that if we did not use the entire amount we would forfeit the rest of the certificate. At this point we left a much smaller tip (still 20%) and left. Did we ever return? No. Did our guests ever return? No. Are they still in business? No.
March 1st, 2008 at 3:56 am
In general telling guests you plan to steal money from them is a bad policy which doesn’t make long term customers. And the whole point of issuing gift certificates is to get in people who wouldn’t have otherwise come to your restaurant and impress them so they return and spend their own money.
Penny wise, pound foolish.
March 1st, 2008 at 10:53 am
My inclination in the situation would have also been to give the server the remainder of the gift certificate as a tip. But it doesn’t put the $ back into the restaurant’s pocket, so that explains why they don’t want to allow it to happen. From the gift certificate recipient’s point of view, they find themselves paying a tip out of pocket in order to use the entire amount of what the purchaser intended to be a gift. If the gift certificate purchaser knew the policy, it might have changed his or her mind about giving a gift that was going to cost the recipient to use it. Or the policy might at least have been explained to the recipient when the gift was presented.
This isn’t entirely related, but how do restaurants handle what I have been seeing in discount coupon ads where the buyer pays $10 for a $25 gift certificate to participating restaurants. Do the restaurants consider that to be advertising expense? I can understand how they would want to exclude tips from being included when they are already taking a loss in that situation. But I don’t go along with a gift certificate balance being forfeited if it isn’t allowed to be used for tips. It would certainly not go over well with the servers if they were required to relinquish any tips received that were included in a gift certificate/card balance.
I have received Malco Theater gift certificates & cards as gifts. At first they were in the form of tickets/coupons, each worth $1. I guess that got to be a lot to keep up with, so now they are electronic “debit” cards. When I first tried to use a card at the bargain movie in Bartlett, their registers weren’t equipped to handle the electronic cards. But they were modified & may now be used at any of the Malco Theater locations. It’s puzzling to me why Beauty Shop & other restaurants whose practices are similar couldn’t figure this out the same way Malco did.
March 1st, 2008 at 11:01 am
I have worked in restaurants for 12 years now. At every restaurant I’ve ever worked at it has never been possible to leave a tip from a paper certificate. I think it is because when you purchase a card it goes toward sales and for accounting reasons, sales and tips must be in there own catagory. All credit card tips must add up at the end of the month to the reports, as do cash deposits, comps, voids. Everything has a place. It usually states on the certificate cannot apply towards gratuity. As far as balances go, there is no reason why the manager couldn’t scratch out the amount and write a new amount with his signature. I have done that with paper G.C.’s. If the manager happens to not be there the server could do it and make a copy of it to keep on file. In this day and age the gift cards are much easier and you can, not sure why maybe because it’s a computer system and it holds the money until told how to dispurse it, put it towards a tip. Cards are a win win situation. And yes, there is a law against expiration dates. If you put an expiration date on it and it isn’t used within that time, the business owes that money to the state. So by not putting expiration dates on them, the business keeps the money and the customer can use it whenever they want. Anyway, that’s my 2 cents.
March 1st, 2008 at 1:23 pm
It seems like a very poor policy, but I am not surprised that it takes place at the Beauty Shop. I’ve received worse and worse service there over the years, and the food is definitely not good enough for the prices. Seems like they are trying all they can to take in some money.
March 1st, 2008 at 6:50 pm
It seems the obvious solution is to get smaller certificates. I may be in the minority but I have always assumed the gift certificate is usable only once and it is my responsibility to make sure I use the entire amount available (if that is important to me) even to the point of buying a stranger a drink. And, it does create accounting issues and cash-out issues at the end of the night is the remainder of the amount is dolled out in cash. Use it or lose it.
March 1st, 2008 at 7:02 pm
I had the same experience at Corky’s. We ended up spending the rest of the certificate on dessert to go.
March 2nd, 2008 at 6:05 pm
Seems to me that good business sense would refund the difference as a new gift certificate for the $12. The customer returns and spends way more than $12. Many restaurants would happily give out small gift certificates to get you to come in and spend more. Beauty Shop gave up a great marketing opportunity in favor of a marketing blunder.
P.S.
Matt- You got your debits and credits backwards.
March 2nd, 2008 at 9:45 pm
Corky’s has 2 types of certificates. Actual gift certicates are a gift card. If the full amount is not used, it is left on the card for future use. We also have Corky Bucks that are essentially promos, they are not available for purchase. Change is not given back on the unused portion of Corky Bucks & is stated as such on the front.
March 3rd, 2008 at 10:48 am
I recently received a Houston’s gift card. When I had lunch there, I thought the card would just be debited for the amount of the check. Instead, I received cash back from the server for the unused portion of the gift card. The server informed me that is how Houston’s handles gift cards. The good news about that is it enabled me to pay the tip out of the gift card change.
March 3rd, 2008 at 11:56 am
If any establishment took $75 from someone for product or services, then the value is $75 and not one penny less. If they don’t want to give change to the person using the certificate, then they owe the purchaser of the gift certificate a refund of that amount. If the retaurant is keeping the difference, it is flat out theft.
Seems like the Beauty Shop is getting a lot of bad press now in your blog and causing them a lot more damage than the few bucks it would have cost to do the right and ethical thing.
March 3rd, 2008 at 12:28 pm
Coming to look back on the follow-up posts…this whole thing really dismays me! I agree, it is basically theft. All I can think of, is if my elderly mother spent $75 of her much needed income to buy me s a gift certificate, I spent $60 of it unknowing that I wouldn’t get the difference, and then I’m SOL….my mother basically threw $15 out the window. This is a horrible practice and I hope the Beauty Shop DOES lose business because of this blog. Or, maybe they can respond and issue a statement of their own.
March 3rd, 2008 at 2:49 pm
Another reason the Beauty Shop and others should be kind to gift card users is that restaurants get a bonus from using them. 10% are never redeemed. This amount, referred to in the industry as “breakage” is essentially free money. Another 15% aren’t redeemed for over a year, so restaurants benefit from the float, or interest on the money received but not yet spent.
March 3rd, 2008 at 5:06 pm
Even Rivoli - a well-known fine dining establishment in the SF Bay Area - issued us a gift certificate for the remaining balance when we dined there. They, too, do not use gift cards and had to issue it by hand, but they said quite clearly that the gift certificate was, in essence, money so they would be remiss in keeping it.
I still have the remainder of the certificate and you bet I’ll be going back there when I have the time and money.
If they had not done that, I probably would not return. Keeping that money would be bad business and, as others have said, even theft.
March 3rd, 2008 at 8:32 pm
I was the one who wrote in to Mr. Koeppel with this question. Thanks to all who replied. It’s nice to know I am not alone in thinking this is a bad policy. I certainly don’t share the Beauty Shop’s idea of customer service when I myself go to work. (I would hurt the business and get fired!) We all have many choices when it comes to eating out, or health care, dry cleaners, etc. I go where I am appreciated and I get a good value, even if it costs more than the competition.
March 3rd, 2008 at 11:52 pm
Ummm………..Interesting for me to read this post after I tried to use the Shaper Image gift card my wife gave me and was told that they decided to stop accepting them. Then I guess you could ask what will happen to all the Yazoo’s and Costa Vida gift cards too! I would like to state one thing. I have known Kevin Keough for some time. Now Kevin may be some things, but he would never intentionally steal or commit fraud (he may tell a bad joke at the wrong time, but that’s about it).
He was probably bound by policy. I have been a victim of this situation while employed at other places. I have lost jobs by not following policy. Thankfully, I can make my own now.
We have a gift card system. It works great and although you will never obtain cash, you can tip your server. As an operator I never want anyone to use the entire amount at one time. I always prefer a few dollars to be left over, because that means they will return to use the balance.
The problem, as with Sharper Image, is that establishments use the money from gift cards like a loan. The cash is infused into the daily sales. This can cause an accounting nightmare. If I were to infuse all the cash of gift card sales in the month of December into my profit and loss, my cost would be low. I would have a great bonus, but the following months would show the shortage.
If a place puts the money in the right place upon the sale, it can be a little more lenient when the card is used. A gift card purchased with cash should be treated as cash. Now, donations and promotion are treated as another matter.
March 4th, 2008 at 9:53 am
Chris, thanks for another restaurant perspective. No one, of course, is accusing Kevin of fraud; the culprit is the policy regarding gift certificates.
March 4th, 2008 at 11:37 pm
Bravo to Houston’s. Their policy about gift cards is the way I wish it would work out everywhere. The purchaser got full value & so did the recipient, without having to pay the server’s tip out of their own pocket. In the case of businesses that aren’t going out of business, I think a complaint to the Better Business Bureau might be appropriate. You’d think The Sharper Image would be above such things, but apparently not.
March 5th, 2008 at 10:17 am
First, I think that this blog has gone a little to far. One thing is that it was solely to place and idea back from people on the fact of gift cards. As we have seen many many many places have the same policy, but when did this blog becomes “Beauty Shop Bash?” All i see here is a bunch of angry people taking out their frustration with gift cards, on a simple restaurant. This is someone’s business, not a take home dinner. I think that some of you should be ashamed of yourselves, this is not a public crucifixion of this restaurant. Its about gift-cards! Give the Beauty Shop a break. If any of you were professionals than you would obviously be more mature about it and leave this blog at an end and finish it. It has gone to far and there is no need for it anymore. This is a sad representation of the commercial appeal to support the community around us.
March 5th, 2008 at 5:36 pm
Actually, Albert, this IS about The Beauty Shop’s policy regarding gift certificates purchased from and for the use of their restaurant. If the owner/investors wish to be thought of in a better light they should modify their gift certificate usage policy. Refusing to return the balance of a gift certificate is outright theft in my opinion. I’ve refused to dine at several restaurants who offered poor service, food, etc. and would not dine at a restaurant that had such poor policies regarding the redemption of a gift certificate. Fool me once, shame on you…fool me twice, shame on me…
March 5th, 2008 at 7:42 pm
Albert,
We aren’t professionals. Or professional bloggers at least. As you apparently are not a professional writer either (I hope not for your sake anyway). As ProfDave says; “huh.” Actually my version would be WTF??? Which stands for “What’s This For” of course…(!) As Cynthia also so rightly says, this IS about the Beauty Shop.
Small restaurant or not, it pretty much was trying to take or keep $12 it was not really entitled to. On the street that would be stealing. In a corporation or government that would be embezzling. Scale does not matter. Principle does. Just because a lot of places do it, it doesn’t make it right. Just like, say, if a lot of people were to use your syntax, spelling and grammar in their writing, it wouldn’t make it right either (I am not a professional so -yes- I went there). The Commercial Appeal supports the Beauty Shop and a lot of KBC’s restaurants. As do a lot of the readers and contributors to this blog. I myself spend more than a fair share of my paycheck at DO and Beauty Shop. But if what they are doing is not correct, we should call them on it. In fact, as a local, community business, it should be more customer-focused, flexible and responsive to this type of situation than some faceless, anonymous corporate chain. History is scattered with the carcasses of once great restaurant or business empires that got ahead of themselves. I would hate that to be the case for such an intrepid, creative and inspired restaurateur such as KBC. No one from the Beauty Shop seems to have responded here, and it is hard to imagine that they are not aware of this discussion. We as local foodies, consumers and patrons of restaurants in our community deserve to be treated fairly, and even if it is just $12 it is the principle of the entire thing, and it appears that many people still expect that a local, business will indeed treat the community that it is a part of, with a little respect. We deserve better, and a place that turns out such excellent cuisine, whose owner is an icon in the local restaurant scene, doesn’t deserve to be unfairly sullied. However, this time around, the criticism is very valid - in the instance of the Beauty Shop and any other business, accounting nightmare or not. Deal with it. We have every right to speak up, and that is the opportunity that this blog and the CA give us.
March 5th, 2008 at 8:54 pm
Here’s the deal. As are many of Fredric’s posts, this is another ridiculous and nasty one. Restaurant ethics? Please. What about journalism ethics in restaurant reviewing and blogging. By the way, is journalism ethics an oxymoron? Speaking of morons, is anyone here familiar with sockpuppetry?
So the gift certificate policy at KC’s restaurants stinks. Stop buying them. Refuse to eat at the establishments. Get a life and move on.
Karen Carrier is under no obligation to answer these criticisms; nor is she under any obligation to change her gift certificate policy. That’s capitalism for ya. It usually works.
If this were such a pressing issue, perhaps Koeppel could’ve asked Karen herself and discussed it with her as would any true journalist. Blogs such as this operate under the auspices of freedom of speech;
yet te real truth is that it is a forum for cowards, misanthropes and those with secret agendas to spread whatever mistruths, insinuations and rumors as they desire. It has nothing to do with freedom. Freedom of speech is indeed a right (Thank God) but as every 6th grader should know, freedom comes with responsibiliy. I can say whatever I want about someone on a blog, but that doesn’t mean I should.
The policy at The Beauty Shop is bad. It does not mean that they are liars and thieves worthy of a sullied reputation and such nasty comments. Everyone loves to jump on a bandwagon that tears someone or something down. I would venture to say that not one of these people has ever owned a business. For the CA in general, it means more people look at the blog.
It’s all economics —just like the policy at the Beauty Shop.
s and hateful insinuations.
It is amazing that Koeppel and the other negative bloggers can say or blog whatever they desire; yet, if one takes an opposite view, look out. Now that’s reasonable and fair.
March 6th, 2008 at 11:46 am
Perhaps the same “get a life and move on” philosophy should be applied to reading blogs whose tone one disagrees with so vehemently that they inspire hostility and rudeness?
I for one am glad when issues of customer service are brought up in a forum like this where people can share their experiences and weigh in with opinions. The better informed customers are, the more likely we can make choices that result in positive dining experiences. I know I’ve tried new places that I enjoyed as a result of reading Whining & Dining, and have avoided a couple of places where service issues would make for an unpleasant meal.
March 6th, 2008 at 12:20 pm
Well, Matt, you may be right. Time could be better spent.
However, the real issue is not about a free forum for ideas and dining experiences. The real issue is about making certain that what one writes– on a blog for the world to see– is indeed accurate and well researched. And the issue is not that The Beauty Shop could respond to the accusations but apparently chooses not to. If that were the case, one could write any sort of accusation, let the damage occur and then say well, you know, she could’ve responded. That just doesn’t seem kosher, or the American Way. Why not have more blogs here with positive tones? Or at the very least, make sure you have the story straight. Many of the comments written on blogs would not be written in the printed pages because of libel lawsuits which, by the way, are being extended to blogs. I also find that those “brutally honest” people who love to write negative comments which they attribute to being helpful and honest often are the kind of people who enjoy the brutality as much as the honesty. Perhaps even more so. Not my quote, but that of Richard Needham, a respected Canadian columnist.
March 6th, 2008 at 12:34 pm
Buy a gift card. Balances stay on there. And Beauty Shop is not the only restaurant that does it. Lots of others do too. You could always buy something to cover the difference.
March 6th, 2008 at 4:00 pm
Let’s see, Mike. I get a message from a reader about an unsatisfactory experience using a gift certificate at Beauty Shop. The reader gives me permission to use that message as a post on this blog. Before posting, I call Kevin Keough, general manager of Beauty Shop, for some comments on the gift certificate situation at the restaurant, and he offers some explanation and background. Then I post the original note and Kevin’s comments, offer a comment of my own, and ask readers to respond as they see fit about the issue of gift certificates. Sorry, but I don’t see the meanness and nastiness and ethical conflicts you seem to see here. I’m just interested in what readers think about local restaurant issues and policies that may affect them and their dining experience.
March 8th, 2008 at 9:51 am
whoa, i have to say i don’t read this blog but after i saw the info in the ca yesterday i thought I should read it and respond. First let me say i apologize to anyone we have offended. We are not in the buisness of taking peoples money for nothing, or stealing, as accused. We are in the service buisness and we are here to serve the public, not alienate them. After 25 years in the restaurant biz between here and nyc i have never once had any problem with our gift certificate policy. Even when Cielo closed in May we have honored any outstanding gift certificates at any of our other establishments. Anytime that a customer has requested a return on the balance of their gift certificate we have reissued a gift certificate for any unused portion even though our gift certificates do state must be used in one seating. In the past this has never been a problem. In light of this recent complaint, we find there are some inconsistencies. Going forward our policy will be any unused balance will be reissued as a gift certificate.
If anyone has a concern about our gift certificates and having any balance reissued please contact me @ roadsidekc@aol.com and we will be glad to accomodate you and listen to any concerns. We are only in the business to make sure people have an enjoyable dining experience. I would like to invite the couple who experienced this problem to come in and dine with us as our guest. Again, please accept my sincerest apologies.
Karen Carrier
March 8th, 2008 at 11:59 am
And THAT, Mike - is apparently what one gets for speaking up. In my own business, my clients’ opinions matter (even when I disagree with them). That is why KC is the icon in the local scene that I said she was in my previous post. Apparently even though not obligated, she once again shows what a class act she was - she seems to have redeemed herself, FK, and the bloggers who highlighted the issue, all in one go. If our city had leaders who so willingly and openly were able to correct inconsistencies, Memphis would be a great place indeed. They likely expect that most others will shrug and “move on.” Karen - kudos to you for being responsive. I was planning on dining at DO with a group of friends tonight, and will feel very comfortable supporting one of your restaurants. Thanks for setting and maintaining the bar for restaurant standards in Memphis.
March 8th, 2008 at 3:01 pm
Well, yes and no.
Speaking up is one thing. Calling someone a thief is another.
The same end result certainly could have been accomplished had the diners or FK called KC herself instead of emailing a third party and besmurching her establishment and name.
You are indeed correct about one thing. Lots of things can be accomplished if people would just speak up–honestly,fairly, and accurately.
According to your argument, it is fair game to single out one person, make an accusation and then let it fly where it may. KC did not redeem herself— because she is not a thief. She just set the record straight and pointed to inconsistencies, etc. She did not offer an apology or ask for forgiveness for being a thief.
But you know, the whole thing does sound just like our political system. Sometimes the truth doesn’t matter to anyone.
All is a bit heavy for a food blog, don’t you think?
March 8th, 2008 at 3:49 pm
Agreed. A bit heavy. Especially in comparison to all the heated discussion over on the Lester St. articles. I did note that her very last sentence offered an apology though - you might have missed that - or not. Frankly, I think FK had every right to highlight the issue, maybe the manner in which it was done could have been more along with your strategy-so a lesson to be learned there perhaps. I think your extrapolation from my argument is a little extreme, but I see your point. We will have to agree to disagree on if he was justified in posting it, and if the bloggers had a right to state their opinions in the ways they did. But I do think we can agree that food blog or not, any forum that allows people to exchange ideas in a fairly civil manner, is definitely of value in this city - just look at some of the other discussions going on at the CA.com.
To switch gears completely, has anyone heard anything new about the Cheesecake Factory opening in Memphis? A chain I know, buta guilty pleasure that for some reason is one of the few casual chain places I like - along with Bonefish and Roy’s. Heard a server at an East Memphis restaurant talking about wanting to interview for an asst manager position there. Apparently it is slated to open by the new Target at Poplar and I240. Anyone have details?
March 9th, 2008 at 1:53 pm
Chris EQ - Did you see the article in the paper this morning concerning Sharper Image and its policy concerning gift cards? If not, I hope you still have the card & can get something for it based on the information presented in that article.
39 comment.