In the context of Sunday brunch evaluation, this research found that US participants perceived a menu price with 15% customary tipping as less expensive than the same price with a 15% mandatory service gratuity. In addition, they expressed greater intent to patronize a restaurant when it is under voluntary tipping than when it is under a corresponding mandatory service gratuity. More importantly, the results showed that participants’ use of surcharge information and perceived surcharge fairness acted in parallel and with similar strengths as mediators of the relationship between surcharge policy and menu price perception. However, the relationship between surcharge policy and patronage intent was fully mediated by participants’ perceived surcharge fairness. The findings of the present research have important implications for the US food service industry as a growing number of restaurants have adopted mandatory service gratuity in place of voluntary tipping in recent years. Although the decision to switch to mandatory service gratuity is mostly driven by concerns about internal customers such as employee compensation, this research suggests that it may have a negative impact on external customers in terms of menu price perception and patronage intent. Consequently, restaurants, especially those targeting price-sensitive clientele, should think twice before jumping on the mandatory gratuity bandwagon.

• Shuo Wang(The Chinese University of Hong Kong, China)