Which one’s the scam? Work from home vs. the automatic tip calculator


Which one is the real house of cards? / K Stack - Flickr

Which of these two offers is the bigger scam?

I recently received two questions from readers of my book, Scammed. I’m interested in your answers. So are they.

Question number one comes from Kyle Lamm, who says, “Your book was pretty good.” (Aw, thanks! That’s the best way to butter up this consumer advocate.)

“I would like to know if you have any information on this company,” he added.

That would be this company: Home Access Income institute.

My first reaction is that it’s a work-from-home offer, which is so scammy that it has its own complaint category at the Federal Trade Commission. You can also find multiple warnings online about the business.

The site is pretty suspicious. It lists the logos of prominent TV and cable networks, suggesting they have offered their endorsement of the Acces Income Institute. I find that difficult to believe.

The Access Income logo looks like a Greek temple, conjuring images of a well-established institution — perhaps a university or a bank. That’s a little iffy, in my book.

How about these promises?

• No Experience, or Degree Needed
• Must have an Internet Connection to Qualify.
• Work From Anywhere and Choose Your Own Hours.
• Limited Number of Positions, Check Availability Now.

Sounds like he perfect job, doesn’t it? Maybe too perfect.

And now they want you to give up your name and email address? With no further information about what it’s offering? I don’t know.

Note: Today marks the final phase of turning this site into a full-fledged general consumer advocacy blog, which started six months ago with the publication of my critically-acclaimed book. My other site, On Your Side, has now been folded into this blog. You can read the archives here.

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Actually, there is further information in its disclaimer, which makes for some pretty amusing reading.

Among the gems:

• “We cannot completely verify our customer statements in testimonials.”

• “There is no guarantee that you will make these levels of income and you accept the risk that the earnings and income statements differ by individual.”


• “Also, we do not promise, guarantee or imply that you (or that your use of our products and services will improve your operation, raise your internet profile, or increase your revenues.”

When I see offers like this, I tend to click away. While this may be a legal business, it certainly is marketing itself in a way that is questionable — and leaving plenty of apparently unhappy customers in its wake. Here’s an interesting story that delves deeper into this world.

Candidate number two comes to us by way of reader Mark Weisberg, who stopped by a local restaurant for dinner in Houston, where he lives.

When the time arrived to present and pay the bill I reached for my wallet to extract my credit card. The waiter removed a small device from his belt designed to scan the credit card, authorize use for payment through a touch screen and print a small receipt at my table. It was very impressive.

His server was probably using a system like this, which is called a handheld, point-of-service system. These are absolutely legitimate, although they can be used in clever ways to extract more money from a customer. For instance,

Using the Suggestive Selling feature, you can set a POS to prompt servers to suggest items to customers in certain situations. Thanks to the Handheld POS, you can now use this potent counter-service feature in table-service venues.

Translation: This system can prompt your servers to suggest even more items that your guests will want to buy, increasing your revenues.

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But that’s not the problem. It’s how the restaurant configured these devices that bothers Weisberg.

What was less than impressive were the on-screen prompts for gratuities at 15 percent, 18 percent and 20 percent and in smaller letters (Other Amount – which would have directed the user to another entry screen).

These percentages are not unusual – except that the initial bill calculated lower numbers for the same percentages, based on the pre-tax food and drink balance instead of the displayed post-tax gratuity percentages.

The difference is only a penny or two higher per dollar spent, but it is the principle of misrepresenting the source of these numbers.

When Weisberg pointed out the difference, his server only shrugged. “After all,” he says, “the error was going to be in his favor.”

Tricky. But which one is the bigger rip-off?

Before you say the work-from-home offer, consider this: While a few will fall for Access Income, the cleverly-calibrated POS machines could potentially affect more consumers. And while they’re only being taken for a few pennies on each bill, it can add up over time. It may cost American restaurant patrons a lot more than a questionable business advertised after midnight on a low-rated cable TV rerun.


Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org.

  • sirwired

    Seriously Chris?  Hmmmm…. Let me think:

    On the one hand, we have something that inserts just enough disclaimers to toe the line between legal and illegal, and is a 100% waste of money in any case.  (Not that it would matter if it WAS illegal, since the FTC is an utterly toothless regulatory agency.)

    On the other, we have device that is calculating gratutites in an inconsistent manner, leading to a financial loss of about 2% on the dollar, but at least you get a meal for your trouble.  (And given what I know about the programmers usually tasked with creating this kind of software, I’m going with incompetence over malice in any case.)

    Both aren’t exactly pure as the new-driven snow, but it seems silly to ask which one is worse; it should be obvious.

  • I agree with Sirwired.  The entire work from home is a scam, compared with pilfering a few pennies.

    I don’t think the correct way to measure a scam is in the aggregate, i.e. how much all Americans lose.  I think you have to measure a scam on its relative worth and how much money a victim is likely to lose.

    An former girlfriend of mine lost about 15K buying a course that told you how to flip houses with no money down.  Emphasis on the word “former”

  • Just because the “receipt” is a new fangled electronic doo hickey doesn’t mean you shouldn’t scrutinize the bill before you sign like you normally would.

    While I loves me some Internet, the drawback is that you’re often letting other people in just as often as you’re seeking out your own info. If you have a curious streak, sign up for a free web-based email, use it whenever you need to sign up / register for something and have it forward to your regular account. At least that way, there’s a layer between you and the scammers and you can easily filter / block messages.

    The people who fall for these scams would fall for them anyway, it’s just that the internet makes them more easily accessible. My own mom excitedly told me about her new “job” as a mystery shopper. She just needed to send a mail order for the materials. Thank goodness I stopped her. My own mother! (smh)

  • Raven_Altosk

    Work from home, definitely.

    So the restaurant calculates on the post-tax rather than pre-tax? So what. Use your own smart phone (or your head) and press the “other” button.

    Speaking of scams, any luck tracking down that sketchy company that was calling me earlier in the year telling me how my credit card would be shut off and then trying to get personal information from me?

    Now that’s a scam.

  • emanon256

    I voted for the work from home, I think the receipt issue is more of a deception. As it was pointed out, you still got food in return.  Work from home, well, you probably get nothing.  Or perhaps you get instructions telling you to place an add like the one you saw, and ask people too send you money so you can teach them to work from home, and then you send them the same info you just got.  There I gave it away, you can now work form home for free and not have to pay.  Ha!
     
    What bothers me are the restaurants that include the tip automatically, and when they include a very high tip.  I have seen some that include a 20% to 30% tip which really annoys me.  If the service were outstanding, I would not be so upset.  But I think it’s up to the customer to tip, based on the service received.  At least in OP2s case, they had a 15% option.  A restaurant near my house says on their menu that for parties of 6 or more, they add a 30% tip, and for takeout orders above $20 they add an automatic 20% tip.  30% is way too high, and 20% for takeout?  Are they serious?  I won’t buy from them anymore.
     
    Sadly my wife let herself get ripped off once.  We went to a conference in Miami, I didn’t know that it was customary for restaurants in Miami to automatically include a tip.  The bill came when I was in the restroom, and she glanced at it and put her credit card in the folio.  When she got the credit card slip, she saw the tip and total box, and added a 20% tip, and totaled it, and signed.  Later at home when I looked at the receipt and her credit slip, I noticed that the initial receipt already had a 17% tip added to the total after tax.  So they then got 20% on top of the total plus the 17% tip.  The service was good, but not 40% tip good.  The line on the food receipt showing the gratuity was in very fine print, and said it would be added to the total on the credit slip.  So the too totals didn’t match, and it was very dark in the restaurant.  I wish she had checked, but sadly she didn’t.
     
    I noticed all of the restaurants were including tips after this, but many much more apparently.  I asked a friend of mine about this who lives in Miami and he said it’s a huge racket and designed to rip off tourists.  He said that any time the wait person does not disclose that the tip is included, he asks for a manager, complains, and edits the receipt to remove the tip entirely and refuses to leave one.  He said more often than not, they charge his credit card the tip anyway and he has to dispute it.

  • carillon246

    The real danger is letting other people think for me. I should be alert to everything from the change I’m getting back to calculating my own tip to developing an inner “scam” sense. Being a part of similar community also helps. BTW, in Ontario, there is a 13% tax on restaurant bills so I usually tip 14% to 18% to get the 15-20% pre-tax. That’s not a lot of difference (per meal) and the server often thinks I pressed their pre-set button :)

  • BillCCC

    I had to vote for the work from home which is a real scam. While some customers will not pay attention and end up tipping more than intended you do have a choice of whether or not to tip. I always use the other amount button and tip what I feel is warranted.

  • cjr001

    The “work from home” is the obvious scam.

    The tipping situation is more about knowledge: most people probably don’t realize that tipping is supposed to be done on the pre-tax amount. Which means that servers/waiters are already benefitting and have been for a long time.

    So, a safe way to go in a situation like with these devices is stick to the 15% tip amount..

  • 2 other red flags on Home Access Income: When you see the major media logos listed “As Advertised On” it only means they can pay to advertise, not exactly a media endorsement. Also, whenever you try to leave a webpage and it makes it difficult with pop-up warnings, etc, run!

  • cjr001

    There’s a number of scams going on right now. My wife and have each received mailings and phone calls recently, so they’re out in full force right now.

  • Durant Imboden

    Re the tip scam: In states or cities where services are subject to the sales tax, the next logical step would be for the state to calculate the tax on the cost of the meal plus tip, rather than on the cost of the meal alone. After all, the tips are being recorded by the POS system, so tracking tips should be easy enough.

    This could lead to a system where the tip is calculated for the meal plus tax, with a second tax being added to cover the value of the tip. For the state or city, it would be a win + win situation!

  • othermike27

    The restaurant gadget’s calculation in their favor is maybe questionable, but not a scam.  After all, the patron has all the relevant information in front of them to verify the calculation, change the percentage, or whatever.  Probably not as shifty as the places that add 18% for parties of 6 or more.

    Home Access Institute doesn’t even tell you what you’re supposed to do to earn money until after you give up personal info – a classic scam flag.

    Thinking for yourself is still the way to go. As the investigative reporters used to say, “If your mother says she loves you, check it out.”

  • SoBeSparky

    I rarely accept the “suggested gratuity” on a Miami Beach bistro bill.  So this tipping POS scheme is no big deal to me.  I tip what I feel like, higher or lower, depending.  I do not believe a certain percentage tip is a server’s God-given right.  The definition of gratuity is a “gift or favor,” not an obligation.

    The get-rich-quick scheme is the scam, for sure. Every day, in every way, P.T. Barnum is proved correct.

  • Noella Delaney

    Everyone should tip on the full amount of the bill, including tax. Servers get taxed on the full amount of their sales, so it’s only fair.

    Walk a day in a restaurant server’s shoes and you’ll understand how hard the job is…If you tip less than 20% you are jeopardizing their livelihood (where I’m from they get paid about $3/hr).

  • FrAAmer

    Not exactly on topic, but- 

    In California, any “service charge” or compulsory tip (such as a tip of an automatic 18% added for parties of 6 or more – as stated on the bottom of a menu) – or service charges added to a bill for a large function (wedding or meeting) are taxable and sales tax is calculated AFTER the tip or service charge is added to the total bill.  

  • cjr001

    So you’re saying that waiters are paying Federal taxes on state and local taxes? I’m leaning toward that not being accurate.

    And my wife has worked as a waitress, although it’s been more than a decade. Granted, credit card use has proliferated since then, but it’s probably still the case that tips are underreported.

    Nobody’s livelihood is being jeopardized by tipping accurately.

  • emanon256

    I spent a few years as a server and I have to disagree.  I got taxed on my tips, plus my base salary (Which was less that $3/hr).  And I believe tipping is supposed to be on base price, not base price plus tax. Customers order food a drink, they don’t order tax. 
     
    Perhaps if a server’s livelihood is dependent on getting a minimum of 20% tips, they need to spend less, or find another job.  I am still a strong believer that tips are not mandatory, but customary based on service.  Good service = good tips.  Bad service = little or no tips.  I regular tip 20% for good service and 25-30% for exceptional service.  I always tried to provide a high level of service, and I felt I did pretty well on my tips.  Though here are many jerky people that don’t tip at all, or leave a few cents, even when I felt I provided good service.  I could never understand that.

  • AAmerican1

    Carver, you had a former partner who shelled out 19K for timeshare and now a former girlfriend who lost 15K on a scam course. Are they “formers” cuz they were using your money?  :-)

  • I guess I’ve been getting unknowingly scammed all these years, then, as I never knew you were supposed to tip based on the pre-tax amount vs. after tax.  Oh well.  No wonder the wait staff at the restaurants I frequent are always so happy to see me.

    Oh, get this for a sleazy restaurant fee – I hadn’t been back here for about 18 months until this week, but this restaurant I used to frequent in India has instituted a “service charge” of 5% of the bill.  I thought maybe this was an automatic tip, but no – it’s a disguised energy fee!  I was informed that the fee is “for the use of utilities and air conditioning”.  Granted, with the price of everything lower over here, the fee worked out to something like 40 cents, but still.

    And Noella Delaney, that kind of entitlement attitude won’t get you very far.  Sorry, but you work in a service industry.  Your tip is based on the level of service you provide.  Nobody is entitled to a minimum 20% tip just for showing up to work.

  • BillCCC

    I am not going to argue about whether servers get paid well or are well treated but I will never tip on taxes. If I tip more or less than a certain amount it is based on service nothing else.

  • Joe Farrell

    As for the automatic tip calculators  . . . .

    you are usually presented with a choice of 15, 18 or 20% –

    If the tip is calculated on the total about with tax, select 15% – it’ll be close to 18%

    Plus – if everyone starts choosing 15% and tips go down with these new fangled devices then the server will start complaining about the new fangled devices – 

    And I’m not sure that either is all that big a ‘scam.’  Stupid is as stupid does  applies to blindly using either of them . . .

  • I’m getting a bit tired of tipping everybody and their mother. Now I’m expected to tip the girl who puts in my coffee order? Really? I think the Australians have it right. Servers are guaranteed a decent hourly salary and tipping is COMPLETELY optional. When you think about it, why shouldn’t the employer bear the cost of his own employees’ salaries?

  • RITom

    What they do not know is that the server must report ALL TIP income as the IRS can trace credit card tips to what is reported on the W-2 forms.  When there is a short fall the IRS calls that FRAUD.  So the waiter that gets a 20% average tip on credit and then only puts down 9% on hs W-2 will be spending some time with Richard Hatch

  • RITom

    Some of you are saying that the “Other amount” is not a scam but is that the same as when an Airline says you have to Opt out of trip insurance? or Opt out of resort fees? or Opt out of CDW insurance?  when you do not see all the choices OR can not make an EDUCATED CHOICE, it is usually calle fraud.or a scam

  • davork

     Noella,servers get taxed on their (employer declared) tips, not the entire bill!!!  naturally if the business is a mostly cash one, the fed and state revenue will (try to) assume a level of pocketing and under declaring of tips…

  • Lol.  Fortunately no.  My law partner’s’ wife inherited some money from her uncle and she wanted to buy something that would remind her of her uncle rather than just put it in the bank.  The partner and his wife were my parents age and they’ve since retired.

    The former gf was crazy.  Cute but all kinds of crazy.

  • Something like that happened to me.  I was a single dinner in a Mountain View Moroccan restaurant.   They added an automatic tip to my bill.  I was livid.  Needless to say that restaurant is off my list, forever.

  •  Everybody’s job is hard.  Unless someone is putting a gun to your head, your chose your job with you eyes wide open.

  • That’s odd considering California rarely imposes sales taxes services.

  • TonyA_says

    Nice post. Now I wish some cruise line employee can give their version of how they make money. I heard (from them) that they only make $50 and the rest comes from tips. Recently, I have also heard Norwegian cabin crew are resorting to hiring their own helpers (which they take aboard the ship) because there is too much work.

  • emanon256

    Thanks.  I am curious how much they make too, especially if they can afford to hire their own helpers. 
     
    Of course they also may make money, or at least save money, by plundering their guests.  But that could just be a Di$ney thing: http://nymag.com/daily/intel/2012/05/disney-cruise-iphone-thief-facebook-photos.html?loc=interstitialskip

  • TonyA_says

    Hiring personal subcontractors is a negative since it lowers the total take home pay of the worker. He (or she) is doing it because the work is too much for them to do alone.

  • SallyLu

    Durant – are you implying that sales tax should be added to the tip amount?  So when a server gets a tip, they should pay sales tax and income tax on that income?  I don’t see that as a win+win (as win+win would suggest that it benefits both parties).

  • MikeInCtown

    I’m not sure how the “scam” your mom fell for was different than other legit offers, but they do exist. There are secret shoppers out there and companies that do market these services. My ex wife and I did this a few times for a restaraunt chain. You go during designated hours an dates and get a specified meal. You make notes of times to prepare, decor, stuff like cleanliness. When done you send in the questionairre along with your recipts and they mail you back a check covering your bill anda little extra for the “work”.

    I sometimes take my kids to the “opinion” sessions where they market a product to kids and get their take on how cool something is or packaging for marketing purposes. Normally they walk out with a cool new toy and they are pleased at what they’ve done.

  • Joe_D_Messina

    I get a message at least weekly from “cardholder services” telling me they can lower my credit card rate–funny that they don’t reference the exact credit card.  I answered the call once and their first question was what my rate currently was. I told them, “you called me, so you tell me what my rate is.”  That ended that conversation.

  • Joe_D_Messina

    Wow, I’ve never seen a 30% automatic gratuity. And starting at a group of 6?  

  • andi330

    Mystery (or secret) shopping is a real gig and does pay out real money. Unfortunately there are also scammers out there who try to look like a legitimate business which can be problematic. You should never have to pay money to become a mystery shopper. If your mom is really interested in mystery shopping she should check out the Mystery Shopping Providers Association (MSPA) which only allows legitimate mystery shopping organizations to post on their site. It’s how I got started and I have never had a problem getting paid by any of the companies that I have shopped for. However, you won’t make a ton of money doing mystery shopping. I use it primarily as a way to get a few things for free that I would otherwise pay for. So if I need something from Lowes, I’ll take a Lowes shop. That kind of thing. It ultimately saves me a little money that I would otherwise spend.

  • Jeanne_in_NE

    Baloney.  This issue was rather thoroughly explored a year ago here in the Omaha area when the city imposed an additional 2% “occupation tax” on every meal or catering item sold.  Servers are taxed on their hourly wage, plus reported tips. (And if they under-report a little too much, the IRS dings them on what they figure is a reasonable amount of tips.)

    I’m curious as to what you think a server’s “livelihood” should be?  Minimum wage?  $20/hr (per the Occupy people)?  I’ve never seen a server in a restaurant with only one table to cover in an hour’s time (unless there’s no business at that hour).  Even a place like Cracker Barrel should generate a good server with enough tips to bring home $10 – $15/hour pre-tax.  (Min. 5 tables, $2/table tips – since C.B. people are cheap).

    If I get good service, I leave a good tip.  I tend to over-tip, as a matter of fact.  If I get lousy service, I figure the server is content with $2.11/hr in wages.

    If the restaurant pre-calculates the tip on the cost of the meal PLUS tax, it’s a SCAM.

  • The work at home scams are basically pure scam that capture desperate and often un-educated people. They often require some kind of cash investment for supplies, training, or special programs. I do work at home sometimes, but for a company that contacted me about a special skill I use in my job. It required no investment beyond my already computer and it didn’t need to be upgraded. The work at home scams are shameful and aimed at people whose choices are limited.

    The POS, and I think of that as an acronym for several things, that waiters use isn’t a legal binding contract in most areas I’ve visited. If a waiter includes his gratuity on services when I didn’t know ahead of time that he was going to do so, I can and will refuse to pay it. If I’m with a large party and the service was less than acceptable, I will appraoch management about the gratuity. This is my choice as a consumer.

    A consumer who is conned by their service provider isn’t being scammed, they’re being irresponsible. A person desperate for work is being scammed by people praying on their needs.

  • emanon256

    Yep, it’s a really good Chinese restaurant too.  I never go with large parties, I usually get take out, but when they added the gratuity to take out I figured enough as enough.

  • TonyA_says

    Exactly. But the problem here is we are pretending  that we are paying for good service. IMO, if you want to do that, get a bill, roll it, and give it to the server directly. But I would still want to see professional servers get a decent wage. It might be the only job left after the recession (or depression) that we never recovered from.

  •  Perhaps in travel, but in other businesses, hiring someone can work well if it allows you to take on greater amounts of business.  I hire assistants to do the work that I cannot bill attorney rates for, e.g. filing.  That frees me to spend more billable hours on legal matters which translates to a net gain. 

  •  I agree.  If you always tip high, whats the incentive for the server to do anything beyond what is required.  If a server, or anyone else wants to improve their income levels, let them provide exception service and get compensated accordingly.

  •  If we apply that logic, very few things would qualify as a scam.  Scams are based upon the deceptive or coercive nature of the transaction, not the relative gullibility of the mark.

  •  I agree.  Both are scams.  Its just that the work from home is a bigger scam.

  • I call BS on the play.  Not all customers are good with math.  Not all customers are comfortable making a confrontation.

    At business luncheons in particular, it would be difficult for me to contest an automatic tip, particularly if I were wining and dining a potential client. And no one has accused me of being timid.

  • TonyA_says

    it’s about the cleaning staff not professionals. they are worked so hard thst they hired their own assistants from poor countries.

  •  …new thread

  • TonyA

    It sounds like the cruise is exploiting its workers.  It sounds like they have an oppressively high expectation of how much work the workers are supposed to get done within the time allotted.  In that case yes, employees hiring additional workers is definitely a net loss.

  • But I pretty much always tip at least 20% (college students, need the money, etc., etc.).  However, whenever I’m told how much to tip (usually 15-18%), I only leave that amount.  I win,  they lose….

  • Interesting question: What is a proper tip. A former boss, an executive at American Express, believed that the tip of food should be based on the pre-tax total. And the tip on wine or liquor at flat 10 percent of that total.

    This position leaves me in the minority. Incidentally, I only apply the 10 percent tax when bill for a pricey bottle of wine, not for wine by the glass or other beverages.

  • Good_ol_Cali

    A few years ago I ate at a restaurant in NYC that charges an automatic tip to groups of 4 or more. Wonder if they were going for the clueless tourists?… :)

  • cowboyinbrla

     In fairness… I will say that groups are usually a tipping disaster for a server, and once you get over 6 or 8 people, an automatic gratuity is almost essential. Otherwise, you get one guy in the group who leaves no tip for his share, and a couple of people who put in 15% of their pre-tax amount but forget that there’s also a 9% sales tax they didn’t factor in, so the tip ends up being about 6%. Then there are those who only put in about an 8-10% tip figuring someone else will probably overtip a bit so that it all balances out.

    I dislike the tipping system immensely (I believe servers should be paid a living wage and it’s not up to the diner to subsidize the owner’s payroll directly) but as long as we’re going to be stuck with it, we need to be fair.

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