HOME > Chowhound > Not About Food >

Discussion

does it bother you when they charge xtra for grilled onions on your burger?

It bothers me, I am a miser, but years ago it was never an issue- it just pisses me off when I ask for grilled onions and find an additional $1 added to my check ......what is the BFD????
How does that make my fellow chowhounders feel????

  1. Click to Upload a photo (10 MB limit)
Delete
  1. sorry but I have no problem with it, everything has a cost to the owner.

    1. I'd rather have the topping as an extra charge, than pay for toppings I don't eat.

      3 Replies
      1. re: bagelman01

        Yes everything has a cost, but why is a slice of cold bermuda onion free, but when you sautee it in the same grease as the burger, it becomes a premium item.....

        1. re: paulispumonti

          Cause it takes time for the grill guy to cook it.

          1. re: critter101

            Also sometimes grill space is limited, and they might delay starting another order. I do think it should state on the menu, or you should be told of an extra charge ahead of time.

      2. Yes grilled onions take some time and attention. is the skill/time of the cook worth nothing? i think a buck is a bargain.

        1. Depends on the type of place I'm at. If it's a fast food type place (gourmet or not) then I'd understand. If it's the type of place that's charging $16 for a burger, I'd hope they'd throw it in for free.

          15 Replies
          1. re: Azizeh

            I agree with your point about the higher end the burger, the more I expect to come with it gratis. :) Because I -know- they're making a small fortune on a $16 burger, even if it's local, grass-fed, organic, disease-free, raised-in-cowtopia, magically-delicious beef. :)

            1. re: Azizeh

              actually azizeh I don't agree with your logic here. If you go to a fancy restaurant then their costs are higher (rent, taxes, laundry, extra staff, fixtures, plates, glasses and silverware etc) so I don't see why you would think that they should throw it in free.

              1. re: smartie

                Because, even taking that into account, they still have a huge profit margin on a $16 -burger-

                1. re: Morganna

                  And that is their profit margin.

                  "Excuse me could I have some black truffles on my burger?"

                  1. re: jfood

                    Oh come one. Grilled onions are hardly comparable to black truffles. Sheesh.

                      1. re: Morganna

                        They also live in an industry with a 90% failure rate in a soft economy. If we spec this out you want a garnish that uses more labor, fuel, space, and ingredients to be yours with no added cost.

                        i have yet to see a business plan where that makes any sense.

                        1. re: Morganna

                          jfood knows, he was just being dramatic. Maybe he should place a :-P when he is kidding.

                          1. re: jfood

                            *smile* That'd help me, anyway, I tend towards being too literal sometimes. :)

                      2. re: Morganna

                        surely the profit margin in an upscale restaurant of about 10% is the same when selling a burger at $16 as Applebees selling theirs at 9.99 and McD's selling theirs at 5.25?

                      3. re: smartie

                        My logic is that at a nicer place, they don't tend to nickel and dime you for every little request because you're already paying $5 for an iced tea. It's the same as McDonald's charging 50cents for extra dipping sauces. They know you're paying the bare minimum, so they're not obliged to give you hand outs, I guess.

                        At my restaurant, we throw grilled onions, avocado, cheese, or even bacon on any sandwich for free. A burger and soda will already cost someone over $25, so we don't feel the need to charge someone for mustard or five extra minutes of legwork.

                        1. re: Azizeh

                          I dunno if that's always true though, look at some of the steakhouses that are already charging an arm and a leg for a steak, but make you pay extra for a simple baked potato.

                          1. re: im_nomad

                            Yeah, they don't get my business either. ;D

                          2. re: Azizeh

                            What a strange restaurant you are running.

                            1. re: Sal Vanilla

                              Sal - agreed. I can't find decent avocados around here for less than 99 cents apiece and it takes at least 1/4 of an avocado to make a difference in a panini or sandwich, so you're talking a quarter COG, which should translate to about an $0.63-$0.83 cent upcharge for most restaurants. Shouldn't be free.

                      4. I just want them to be clear and upfront that what they might be suggesting is going to cost me extra...or I feel deceived. Non disclosure is a form of lying.

                        1 Reply
                        1. re: scuzzo

                          Well, if the grilled onions are part of the description, they shouldn't cost extra. If not, most people would expect they might and many would think they should.

                        2. If they're included in the basic burger's description, as happens occasionally, then of course I'd expect to get them gratis, but otherwise they're more than just a garnish. If you would normally pay as much as a dollar for a little slice of process cheese, why not the same or more for grilled onions? They're more trouble for the cook and harder to get right.

                          1 Reply
                          1. re: Will Owen

                            What works in my favour is that it's the same price for American as it is for blue or white cheddar (or bacon, onions, mushrooms, etc.)? Bacon, blue, raw onions.

                            I've had to accept that my burgers will cost more unless there happens to be a pre-set combination; I've accepted that.

                          2. Nope, as long as the fried onions are good, a buck is a fair price.

                            What bothers jfood is when they say caramelized onions and the things barely have a char or when the onions spend about 30 seconds on the flat top. Jfood cannot stand raw onions in or on anything so if they say fried at leastthey should not be raw with a couple of grill marks.

                            4 Replies
                            1. re: jfood

                              That just happened to me, sandwich advertised grilled onions, they were raw, pungent with a few grill marks. uncool.

                              1. re: jfood

                                Oh jfood, you've hit on one that sticks in my craw. Had this experience recently during a brunch, menu said caramelized onions on the sandwich, and it came out exactly as you describe. Dry, raw, grill marks. Caramelized depicts golden, sweeter, not harsh and bitter.

                                1. re: im_nomad

                                  J, red, and im, I'm with you. Was just thinking about this today. Perhaps we all need to take a pledge to complain or send the onions back to the kitchen if they are not prepared as described. Grilled onion needs to be cooked beyond the raw with a brown streak stage. Friendly's "grilled onions" seem boiled in oily water -"smothered" would be more applicable, although smothered implies a tasty, softened onion which has been gently cooked in fat/stock. Short of white-linen restaurants, I've seldom gotten caramelized onions that really were - generally they are just smothered. Notable exception is those on Bertucci's pizzas, which are nice and soft, brown, and mellow.

                                  1. re: greygarious

                                    jfood already does. He asks for the onions on the side and will immediately send back if they are crap.

                                    Likewise jfood hates raw onion and he ALWAYS orders with no raw onion. If it shows up, you cannot get the taste off the burger and he sends back as well.

                              2. We offered a standard burger for one price at our restaurant. That included, lettuce tomato, and condiments, ketchup, mustard, mayo, pickles, etc, fresh onion slice.

                                Then we had the make it or break it burger 50 per item and they were made fresh not, steamed ahead. You could choose from a variety of cheeses, mushrooms, grilled onions in sherry, a hot pepper mix and I think a few others. Then we had the deluxe burger. It was 2.00 more. 2 or 3 gourmet items added to the burger. crab salad and avacado. Avacado and fresh salsa. Mango salsa with cheese. A artichoke sauce with olives, capers and a champagne sauce. Thin fried onions with sweet ham and gruyere cheese. There were a few others.

                                So yes. I totally agree there should be extra charges but a dollar to me is to much for a grilled onion.

                                1 Reply
                                1. re: kchurchill5

                                  >>artichoke sauce with olives, capers and a champagne sauce.<<<
                                  i'll take mine medium, thank you, kim! <can i substitute bearnaise? LOL!>

                                2. I would not have assumed they cost nothing - they are not the same as raw toppings.

                                  4 Replies
                                  1. re: Karl S

                                    Okay, off the topic but related, what annoys me more is that pizza places charge the same additional cost for onions as they do sausage. I understand the upcharge but a few onion slices are pennies, while sausage, pepperoni etc are for more costly

                                    1. re: mmalmad

                                      You are thinking like a homemaker not a restaurant. Produce spoils faster than cured meat, and cured meat can be frozen while the typical produce items used on pizza can't as readily. So there is more waste to produce than there is to cured meat. Secondly, it's more efficient (due to simplicity) for many places to average the costs out rather than distinguish by topping.

                                      1. re: Karl S

                                        i think that argument is true for things like spinach, mushrooms or tomato etc, but onions last a helluva long time if stored properly. I know it's to even all things out, but i'd prefer to see a high-range, mid-range and low-range topping selection, because the +$ would also apply to stuff like pickled peppers and olives.

                                      2. re: mmalmad

                                        Considering the quality of most of the "sausage/pepperoni" served at most pizza joints, I'm not sure if they are more costly than peppers or onions.

                                    2. So by the majority of the responses, if one were to order a patty melt....which come with grilled onions usually, if one were to order the sandwich with raw onions, should one expect it to be cheaper?

                                      1 Reply
                                      1. re: fzappa

                                        No. Removing things from the menu does not give the cutomer a credit to the amount paid.

                                      2. I don't mind at all if they charge extra for the grilled onions, provided that they tell me on the menu (or the server does) that there is an extra charge. Then I can decided if the total cost of the burger is worth it or not.

                                        What bugs me is when they try to sneak the charge in when they present you with the bill.

                                        8 Replies
                                        1. re: gfr1111

                                          Out of curiosity and not snarkiness on the "sneak" comment. If the menu says "1/2 pound burger served with letuce, tomato and your choice of cheese...$8.95". And you order, "Can I have the burger, medium rare with fried onions". Is it the responsibility of the server to tell you, "there is a charge of $1.00 for the fried onions". Would you consider it "sneak" if they did not tell you?

                                          1. re: jfood

                                            I think it is sneaky Jfood. I don't know what biz you are in but say you are a CPA and you charge your client 150.00 to do his taxes and then put a bill in at the end and add $5 for mail that would be the same level of sneakiness.

                                            I am having my carpets cleaned in half an hour assuming they show up and my quote for $120 is hopefully all inclusive. I would not expect them to charge me for the shampoo. But if they ask me when I am here would you like the carpets deodorized and don't tell me it's an extra $x then I would be correct in being mad at them.

                                            1. re: smartie

                                              Jfood uderstands, and he has been both upset and understanding in those gray area situations (BTW - his lawyers charge him for mail separately from the hourlies)

                                              But where does it move from inclusion to extra. In your example with the carpet cleaner (good luck by the way) if you ask them to include Stainmaster guard is that extra, or if there is a red wine stain that takes an extra 20 minutes to hand scrub what about that?

                                              There are certain things one expects with a burger in a restaurant, i.e plate, fork, knife, ketchup, and then there are the extras, i.e. fired onions, cole slaw. It sorta depends on the situation. But if the menu, as in jfood's example specifically lists the extras that are included are the others a pay for extra. If the menu had merely stated, Cheeseburger...$8.95" that may lead to a whole other thread when the server states, "would you like tomato, lettuce, fried onion on that" without mentioning that each has a $1 surcharge. "what is included with the burger?" may have taken that grey area off the table.

                                              The whole concept of gatcha on both the resto and the custo side is a game jfood hates. You order it, you pay for it. If you are going to charge for it tell the customer. Why is it so hard?

                                              1. re: jfood

                                                agreed it's nasty and it is a game. We don't buy a coat and expect to get charged extra for buttons but for some reason food and drinks always seem to have this grey area.
                                                we go for drinks and there are peanuts on the bar but we would be mad if there was an upcharge for nibbling them. However at Indian restaurants in England they always bring chutneys to the table and it is hit or miss as to whether they will charge you if they see you adding chutney to your curry. It is potluck if it's included or added to a bill. Very annoying.

                                                1. re: jfood

                                                  If it was called an onion burger, you have a point pauli. If not, It is reasonable for it to be considered extra.

                                                2. re: smartie

                                                  Grilled onions are not like shampoo. They are like Scotchguard - if it's not listed, assume you will pay extra. I think it is unreasonable to be "mad" in this instance - they are not being sneaky - it is you who have unreasonable expectations.

                                                  1. re: Karl S

                                                    I think you misread my post, I said IF.

                                                  2. re: smartie

                                                    When a customer goes off menu and asks for something extra they need to assume they will pay for that value added. If they don't, they are trying to be "sneaky".

                                                    If the server up sells the item they should specify the cost.

                                                    If I ask my CPA for a second hard copy of my taxes I expect there might be a charge. I am dipping into her resources beyond what was already agreed upon.

                                                    That is an apples too apples comparison.

                                              2. We didn't charge extra for grilled onions. We had several patrons who requested them, so we'd cook a batch and put them on the warmer, then reheat them with the burger.
                                                No problem.

                                                4 Replies
                                                1. re: bayoucook

                                                  good point. this whole discussion seems to be based on the notion that when you ask for the grilled onions on your burger, that they are doing them from scratch per order. That is highly doubtful, what they more than likely are doing is rewarming grilled onions from a large batch that someone prepared earlier as part of the MIse. If they dont have grilled onions as an option on the menu, then when you ask for them you are probably going to get a flat "no:" as a response.

                                                  that being said, they are what that are. That being a value added product. They are both a way for the restaurant to boost profit by providing you with an extra, and an uprgrade to your meal. It is up to you if that added value is worth the added price. If you ask for grilled onions(that arent specifically called out in the description of the menu) and fail to ask about any additional charge, well then, thats on you.

                                                  1. re: nkeane

                                                    interesting logic. so your dessert should now be free as well, because the cake was made by a baker earlier in the day, and when you ordered it the cake was just plated and presented to you? likewise your soup, pizza crust and sauce were made yesterday, so i guess you only need to pay for pizza toppings that someone put on the pizza to order. oh and your bottle of wine, that's three years old, heck you don't need to pay for that. . .

                                                    regardless of when a food was prepared by restaurant staff, it was prepared by them, ingredients are used, people get paid to prepare them, space and equipment is utilized in their preparation, someone does the dishes and sweeps and mops, someone is managing the prep list, someone is stocking the cooler and reordering the onions because everybody's ordering fried onions. if the customers don't consume all of the food, there is waste associated with it. likewise if there is a special order that gets screwed up and must be remade, there is waste (cost to the restaurant) associated with it.

                                                    The idea that a line cook works for a paycheck, but that a prep cook who works earlier in the day works for free, and brings in her/his own ingredients out of the goodness of sweating in a hot box for 12 hours. . .well that's possibly the most ridiculous concept i've ever heard of. if you can't stand the idea of paying people one dollar to order, store, schlep, chop, cry, store, wash, cook, plate, walk to your butt at the table; clear, wipe, wash, compost, recycle, haul, sweep, mop, restock, reset, reinventory, reorder. . . omg! stay home and fry your own onions, please!

                                                    1. re: soupkitten

                                                      wow. you seriously misinterpreted what I said. simply put, what can be done en masse, earlier and before service, is done at a reduced cost because of economies of scale. I was not and would never downgrade someones work based on their job title.

                                                      1. re: nkeane

                                                        That's what I meant up-thread. Staff is preparing for lunch service anyway - throw the onions on the grill and cook, then keep and reheat when ordered.
                                                        An onion is an onion, raw or cooked. It's no more work than prepping the raw ingredients for a burger or sandwich. The onions sizzle on the griddle while other prep is being done. It's simple.

                                                2. I'm kind of in line with many who've stated "as long as they tell you". Same goes for stuff like nachos, and asking for jalapenos, which are not exactly an outrageous abnormal request, and getting charged without being told. I don't understand however, why some places charge for some condiments and not others.

                                                  It would bother me more if the restaurant refused to put the item on the burger to begin with. Burgers are made to order, so if I wanted say, to have a veggie burger, with all the wonderful toppings on that other burger over there (and pay extra for it), the resto should allow this.

                                                  4 Replies
                                                  1. re: im_nomad

                                                    It's an ONION!! Grill it, put it on! No extra charge. Where are we, The French Laundry, for Pete's sake? Takes extra time, Blah Blah Blah etcetera. Wah wah wah. Suck it up. griller!

                                                    1. re: spazita

                                                      Thank you Spazita that after 44 posts finally someone agrees with me.....Like I said in the orig post...it's the same bloody onion, thrown on a grill, in the same grease as the burger and likely carmelized even before your burger is cooked....Years ago, and I'm not going way back here, you could ask for grilled onions on a burger and not be charged for it...Keep in mind to that the price of ground beef has remained relatively stable over the years, but an average burger in a pub/restaurant is rapidly approaching the $10 mark

                                                      Spare me cost of the grilled onion or spare me the rod........criminy

                                                      1. re: paulispumonti

                                                        I'm 62 and remember being charged extra for grilled onions most of the time in the 1960's. Not so often in the past 20 years.

                                                        1. re: grampart

                                                          jfood's with you, fried onions were always a charged item. Tomatoes were always free growing up and now many charge for them, but at $2 per pound jfood can understand.

                                                  2. I can recall correctly, my favorite hot dog joint, Rutt's Hut in New Jersey charges a buck for sauerkraut (it's a side), even if you only order a single hot dog.

                                                    1. For the extra kick that grilled onions add to a good burger, I'm happy to pony up. In many places it's not an option. I do think that the price of EVERYTHING should be disclosed at the moment when "offer and acceptance" are agreed to, whether it's 75 cents for extra blue cheese at Hooters, or a $40 daily special. That is how valid contracts work. The doctrine of reasonableness is too vague.

                                                      1. If grilled onions are an option on the menu, and no additional charge is noted, I order them, but otherwise I'm happy with regular onions (purple, if they got them). And if someone tried to charge me for them without an extra charge being noted beforehand, I wouldn't go back. I've got plenty of burger options.
                                                        I worked the grill in a Dairy Queen in college, and I always kept a pile of onions simmering in the corner, because we didn't charge for them and maybe 1/3 of the burger orders asked for them. A couple handfuls of onion, a slop of grease from the fryer, and a couple shakes of butter salt. I miss those burgers -- we really tried to make them the best burgers in Derby, KS.

                                                        1. I see from the latest on line menu that Krazy Jim's in Ann Arbor now charges 50cents for grilled onions on a Blimpy Burger. When I went to school there I thought the grilled onions were there to hold the occasional pieces of meat together.

                                                          1. I've read through this thread, and it seems to me there is an underlying assumption being generally made about pricing, i.e. that prices of each individual item or variation are supposed to somehow be logical, or follow costs as closely as possible. To me, that is just plain incorrect, and misses how things actually get priced. I've studied pricing a good part of my life, and In my view there are only two rules about pricing that are followed in the real world: (1) you charge whatever you think you can get for any particular item, and (2) at the end of the day the spread between your total revenue and your total costs must be as large as you can make it. As to grilled onions, and everything else, whether a particular restaurant owner charges or not depends on whether he thinks he can, and in turn that is largely based on the customers' expectations and, really the same thing, what the places he views as his competition are doing. He would charge extra for catsup if he thought he could, but anybody who tried would not get any business ("Harumph that guy charges for catsup---I'll never go there again and neither will anybody else--Harumph harumph"). But on other things it's less clear, so different owners, each trying to do what is best for his profit, will reach different conclusions. It is a seat-of-the-pants thing--the question he asks himself is, "if I charge X for this I will get a little more revenue when it's ordered, but I will also turn some customers off so they won't come back and then I will get less revenue, so where is the sweet spot?" The so-called "cost" of grilling the onions seldom enters the decision process, partly because there is no material cost to doing it--the grill is hot, the grill man is there and can certainly do it, etc. etc. Different decision makers will come to different conclusions. No owner will ever know how many customers he kept or lost because he did or didn't charge more or less for grilled onions. As a customer, the best you can do is maybe tell him you're pissed that he charges extra, so maybe he'll rethink--but probably not. So each of us patronizes the places that give us the best value for the things we, well, value. And life goes on.

                                                            BTW, when I can I ask for BOTH grilled and raw onions on my burgers--to me they are very different and they both have a place. But that's just me.

                                                            53 Replies
                                                            1. re: johnb

                                                              what a bunch of baloney. i want to live in this magic place where "there is no material cost" to something that takes staff time and ingredients. yeah, onions and oil are free, and if someone is chopping or frying onions you don't have to pay workman's comp or insurance on that person, it's just when they start to do any other kitchen task that these costs come into play.

                                                              how about the onion cases' footprint in the walk-in? you know with all these "cheap/worthless" ingredients in the cooler (onions, potatoes, bread flour, carrots, celery, lettuce), we could have just eliminated them and built a smaller refrigerator for like *thousands* of dollars less. . . what about overhead in general? you left several business costs out of your careful analysis. . . do you think that it's reasonable that one or two cents of every item ordered at a restaurant pays for equipment/smallwares/plates/glassware/flatware, or linens, or window washing, or the light bulbs on the sign outside, for example? or is the proprietor ripping folks off with the lightbulb, spatula and toilet paper purchases?

                                                              1. re: soupkitten

                                                                kitten

                                                                Not material doesn't mean there is no cost, it means that the EXTRA cost of providing the specific item is very small. Don't confuse marginal costs with fully allocated costs. This is not uncommon, but it is wrong. Let's not get into a dense Econ 202--Micronomic Theory discussion here, but the basic point is that the owner has already laid out all the costs of producing that grilled onion (except for maybe .02 worth of raw onion) anyway. Whether the grill man grills that bit of onion during his shift or doesn't does not change his paycheck, you don't need a larger cooler, and so on. Sure all the costs have to be paid in the end (see my point number 2 above), but allocating all those fixed costs to specific items is not, and should not be, what drives pricing of any individual item. Other considerations drive pricing, specifically how much the pricing decision affects the bottom line, and that effect is felt almost exclusively through its effect on volume, not costs. And volume effects depend on MARKET, not cost, considerations. It is misguided, and ultimately self-defeating, for the owner to price based on an allocation of fixed costs that will not change depending on whether the item is produced and served or not. That is true of any business, not just restaurants. I doubt there is any business anywhere that sets prices based strictly on cost allocation, (and surprizingly frequently pricing appears not even loosely based on costs).

                                                                In short, make your customers happy. Charge whatever you can get away with whenever and wherever you can, but don't charge them for things that they reasonably feel they shouldn't be charged for, because if you do they don't come back and you've shot yourself in the foot.

                                                                Pricing is an art, not a science.

                                                                1. re: johnb

                                                                  spare me the armchair economics. how long does it take you to chop 50# of onions? how quickly can you load 160# of onions on a dolly and take them down the staircase to the walk-in? what would you expect to be paid, once you have completed these tasks? i suppose it would shock you that a pound of onions does not go for $0.08-$0.16, wholesale (pre fuel charges) *anywhere*? your $0.02 estimate on the price of a portion of onions is *way* low, and it assumes that onions cost the same everywhere, and that everyone uses the same variety of onion, and that the fuel charges don't exist.

                                                                  you assume, along with the op, that onions appear with the wave of a magic wand. people *work* to put the onions on your plate, along with everything else that appears there. the customer sees only the grill man, not the prep cook who chopped the onions, the dishwasher who cleaned the cutting area, or the kitchen mgr who manages the prep list and keeps the cooler rotated and the schedule on track (just for starters). some restaurants have employees who *only* do garnishes, or potatoes for french fries, or onions, all day, or who *only* wash produce. these people need to be paid, workman's comp/insurance on them, etc.

                                                                  all the extras count. there have been tons of threads about why there shouldn't be a charge for bread, even in the places that employ someone(s), full time, to bake the bread, and flour isn't free, either.

                                                                  the logic behind "i can buy a steak for $10 at the supermarket, therefore a restaurant has no right to charge me $35 for a similar steak," and "the bread/fried onions/other off-menu extra should be free of charge" is the same, and it's faulty, because it assumes that food appears by magic, and not through the labors of human beings.

                                                                  sure a hotel that charges $18 for a burger can probably throw in the cost of fried onions. the place that *just* does $7 burgers probably has someone chopping onions for a good part of the day-- the op isn't the only person who will order fried onions, after all. these folks expect to be able to order fried onions. . . the employee has a right to expect to get paid, and for medical treatment if s/he gets hurt lifting that 50# case of onions, or the knife slips on an onion. how is it unreasonable to ask the folks ordering the extra item to pay for the extra work of an extra employee who works to directly supply that extra item to them, on their plate?

                                                                  extra menu items absolutely affect the overhead wrt space and equipment. if you're storing 4 cases of onions, 6 cases of carrots, 4 cases of romaine and 2 cases of bok choi, or any combination of other "cheap" vegetables, guess what, you need a bigger walk in, because now you don't have much space to store either the prepared food or the expensive produce. if you need a bigger walk-in, you need more floorspace in general. and at $27/sq ft. . .

                                                                  1. re: soupkitten

                                                                    Thank you kitten. I had NO IDEA that a restaurant had any reason at all to charge more for a steak dinner than a supermarket would charge for the steak. Gosh I'm so glad you cleared that one up for me.

                                                                    So based on your theory, why don't you charge for catsup and mustard? Why not charge extra for the bun, or the tomato slice, or the pickle? And on the other side of the ledger, why charge the same mark-up for a canned soda as for food that has to be cooked and served? I'll will explain it once again. You charge for things you can get the market to accept, and that's where you get your revenue from to cover your costs. If that happens to be grilled onions in the market you happen to be in, fine, charge for them. You try to get the most revenue you can, wherever you can. But if you try to charge for things that your customers don't accept paying for, you lose your customers, and then you lose money. It doesn't matter what specific things you have charged for and have not charged for--what matters is that your total revenue covers your total costs and leaves you as large a profit as possible.

                                                                    If a restaurant tried to figure the cost of every little thing it serves and charge exactly for that, item by item as you continue to insist it should, its customers will go away and it will be out of business. Prices follow market factors, not cost factors. The fact that everything has a cost that can be calculated (making assumptions) is IRRELEVANT to business success. Name me a business/industry that exactly prices everything based on fully allocated costs. I will name you 100 that don't.

                                                                    1. re: johnb

                                                                      As an advisor to numerous businesses jfood can state emphatically that ABC ("Activity Based Costing") is being used in business and the pricing model thereafter is based on the costing. One company has just gone through a 6-month exercise to perform these analysis and recommended a price increase (yes in this economy). There was some resistance but 82% of the customer accepted the higher prices. And the 18% that left the company allowed the company to focus on profitable customers and give them better service.

                                                                      1. re: johnb

                                                                        i'm not insisting that a restaurant charge for every single item. i'm just stating that some menu items have add-ons/extras. ever been to an americanized chinese restaurant where you have a choice of meats and seafood in a certain dish? chicken $7, pork/beef $9, shrimp $12? some customers like the option to pay more for a desired ingredient, or less if they're on a tight budget. same concept. i don't choose to charge every customer for a bacon cheeseburger with fried onions, when some customers just want a plain hamburger. those that want cheese, bacon, a second patty, fried onions, or any combination thereof, can order these items on their burger, "a la carte." it's a very old restaurant concept, and many successful restaurants have employed this practice to better serve their customers' needs.

                                                                        you might think it's great business practice to have a one-price menu-- customer's choice, all inclusive, for just $10.99/person, or whatever. this is another restaurant model commonly referred to as "a buffet." some of these establishments do very well. but otoh, some customers prefer to just order, and pay for, what they want to eat, and not pay for items they won't eat.

                                                                        <<
                                                                        So based on your theory, why don't you charge for catsup and mustard? Why not charge extra for the bun, or the tomato slice, or the pickle?
                                                                        >>

                                                                        well, i *make* the catsup. it's a sauce, it goes with the burger. on other dishes, there are other sauces we make which are served on/with/alongside the dish, and they are integral to these dishes. salad dressings, chutney, syrups and fruit sauces for desserts, cream sauce, hollandaise, yada yada. so a sauce that's integral to the dish is costed into the price of that item. i'd also say that a burger without a bun is oxymoronic-- the bun's costed in as well, as is the garnish, including pickle (we make). most well-socialized folks would tell you that you can have a burger without cheese, or a burger without fried onions-- perhaps they *prefer* to order the cheese or the onions, perhaps not. the price of the standard-issue burger at any establishment includes the standard issue accompaniments and garnishes, which will vary--variety is spice of life, & all that. some places include the fries, some places have fries as a side order. some places will sub tater tots or onion rings for fries for an additional upcharge. who cares? it's not like it's some exotic new thing to charge a la carte for cheese or fried onions on a burger, your assertion that successful places don't under any circumstances do this falls quite flat. in quite a few places, if you want something extra, be it fried onions, avocado, a runny egg, or a rare t-bone steak perched atop your hamburger patty, you order it however you'd like, the items are prepared to order, and you, the customer, pay for them. it doesn't have to be hard-- hey it's gotta be easy for the idiots who run restaurants to get it ;-P

                                                                        thanks for the free business advice though. you get what you pay for, as they say-- or, if you're paying for toppings and garnishes you don't actually want, maybe you don't. i personally appreciate that i can get different burger models around town, with plenty of extras to choose from, at different price points to suit how underdressed i am. if it was all the same standard-issue mcd's burger with crappy hfcs ketchup packets and a business plan to match, it'd be a bad day for burgers.

                                                                      2. re: soupkitten

                                                                        Sorry, but that's a straw man argument.

                                                                        Assuming that the burger comes with raw onion, the cost of buying and prepping onions has absolutely nothing to do with the incremental cost of serving grilled onions; those costs are already built into the price of the burger.

                                                                        The incremental cost of serving grilled onions is limited to the cost of keeping a pile of onions sizzling over low heat. If you don't already have a spot on the grill that can be used for this purpose, then a capital expenditure is required and has to be amortized into the cost of grilled onions. And any extra labor on the part of the grill cook is also part of the incremental cost.

                                                                        IMHO, charging a buck for grilled onions is like charging a buck for a $.02 slice of petroleum-byproduct "cheese," only more so. It has nothing to do with the incremental cost of food and everything to do with maximizing profit. Nothing wrong with that, mind you, but don't try to pretend otherwise.

                                                                        1. re: alanbarnes

                                                                          who's assuming that a burger comes with raw onion? or petroleum by-product cheese, for that matter? not every establishment with a burger on the menu is a fast-food grease pit. . .

                                                                          i'm not talking about fast food joints, i'm talking about restaurants where produce does not come pre-shred/pre-chop in vacuum packed bags, and the cheese doesn't come off the sysco truck, it comes from a cheese specialist or in many cases it's dropped off by the farmer who made it. you want farmstead gouda or cave aged cheddar on your burger? fantastic. but since i'm special ordering it and pulling it out of a special dairy-only cooler where it's carefully stored, unwrapping the paper, cutting off the correct amount of cheese, and putting it on your burger (rewrapping, re-fridging the cheese so it doesn't melt, every time); since the farmer took a special trip to bring it here, and because i know what the cheese *actually* costs, and how much labor went into the cheese. . . guess what, i think i'll charge a whole dollar for that. the folks i talk to seem to think that's a helluva deal, and not a bad way to sample small batch locally produced cheeses that are new to them, either. if someone wants free cheez product on a cheap burger from wendy's instead, it's down the street. or do fast food places charge extra for cheez product? i guess i wouldn't know the answer to that.

                                                                          i have no idea how an indie operator could possibly expect to be able to run a restaurant and feed her/his family if people keep dumbing down the food to the lowest level, saying that since cheez product is supposedly $0.02 from sysco (and i don't have an account with sysco, so i wouldn't know) or factory pre-chop onions in a bag are supposedly $0.02 a portion, which is hooey anyway, and the correlating lowest cost factory farm beef, and on and on. . . that the price of whatever the restaurant puts out should be priced similar to fast food. i ask: what is the incentive for any proprietor to use good beef, or real, locally grown produce, or fine cheese on a product, when customers such as yourself make it clear that they want the cheapest food, with the most free toppings, and that any ingredient used will be compared with the cost of the preprocessed factory dreck at mc donald's, with no regard for quality? (then in a few years these same people will be the ones complaining that nobody puts out quality food, like they used to :))

                                                                          if you're convinced that all the "cheap" fast-food places are doing a great job, and all the other restaurants are ripping you off, nothing i could possibly say would convince you otherwise. but i think i'll stick to putting cave aged cheddar on burgers and charging a buck for it, it seems to make my customers happy--and contrary to what you seem to think, i'm not in any danger of getting rich. i think if i switched to sysco cheese and gave it out for free, i'd lose customers. i also think it would be an insult to the other ingredients in the burger, so i guess that matters more to me. you want to pick a bone with someone for making an obscene profit on a cheap food substance, maybe start in on the movie theater people, with the popcorn and soda fountain and junior mints markups. restaurant people don't deserve the attacks based on inaccurate assumptions about what food costs, or the labor that goes into preparing it. it isn't wise to quibble with someone over a dollar, when at the end of the day, her/his feet hurt worse than yours do-- you generally won't get that person to feel sorry for you.

                                                                          1. re: soupkitten

                                                                            If you're buying farmstead cheese for a premium price and passing the cost (along with overhead and reasonable profit) on to your customers, more power to you. But there are plenty of places that buy vaguely cheese-like food product for $.02 a slice and sell it for $1. That's profiteering, plain and simple. I'd like to think that you're not one of those, but if the shoe fits, wear it. If not, lighten up already.

                                                                            I didn't say anything about fast food joints, and I never suggested that anybody was ripping anybody else off. Moreover, I made it a specific point not to cast aspersions on those who charge extra - however much - for putting something like cave-aged cheddar on a burger.

                                                                            But let's face it - 99+% of restaurants will include the cost of a raw onion slice in the cost of the burger. If yours doesn't, all bets are off. But if it does, the real question is whether it makes sense to charge a buck for keeping that (free) onion slice on the (existing) grill for a couple of minutes.

                                                                            Again, it's the owner's right to gig the customer for an extra buck. And the customer may decide it's worth it. But let's not pretend that there's a real cost basis for the extra charge.

                                                                            1. re: alanbarnes

                                                                              A

                                                                              Jfood is unclear what business you are in, but he has a feeling it is the legal field. Let's do a legal analogy. If a lawyer charges by the hour, and the client books an hour of time and stays an extra 6 minutes then is it OK for the lawyer to charge an extra 1/10 of an hour? Heck the lawyer is already at the desk, the client has already paid $400 and what's another 6 minutes? Or how about the admin as a profit center? send a fax, charge the client $25, heck s/he is already sitting there.

                                                                              The restaurant is serving food and the lawyer is serving advice. Why should one garner a charge and not the other?

                                                                              1. re: jfood

                                                                                Wolfe is not a lawyer and wolfe thinks that is a ridiculous analogy.

                                                                                1. re: jfood

                                                                                  All lawyers have billing software that charges every 10th of an hour. They are exactly like taxis, except miles are minutes.

                                                                                  1. re: Veggo

                                                                                    Wolfe likes the taxi analogy better.

                                                                                  2. re: jfood

                                                                                    well you'd have to make the assumption that the lawyer told you you were being charged for sticking around an extra 6 minutes, and making the assumption that the lawyer was actually serving advice during this time,

                                                                                    1. re: jfood

                                                                                      jfood

                                                                                      Against my better judgment I'll get back into this one.

                                                                                      I don't think the lawyer is a good analogy to the burger, since the economics are so different, but since you brought it up here is a question in response to yours.

                                                                                      Suppose the lawyer promises the client that the following day he will set aside an hour to work on the client's problem. Next day comes. He starts at 10am and thinks about it for 12 minutes, then gets a bit of indigestion from his morning donut which sets him to thinking about the kind of donut he ate and whether he ought to have eaten a good breakfast instead. He thinks about this for 6 minutes, then returns to the client's problem. After another 12 minutes, his mind again wanders, to what to have on his burger for lunch. This gets him to thinking about the pool party he will have that weekend (he's trying to make partner and the partners are invited), and what toppings to put on the burgers. He remembers some thread on Chowhound that talked about that, so he brings it up and reads it for a few minutes, and finds the repartee there very enlightening. He then quickly makes up his shopping list, and after a total of 12 minutes gets back to his client's problem for the remainder of the hour. Thus he has spent 70% of the hour thinking about his client's problem, and 30% screwing around. His salary is $200/hr, and his billing rate is $400/hr.

                                                                                      My questions to you are: (1) What is his cost of working for the client, (2) what *should* he bill the client, (3) what do you think he will actually bill the client? and (4) what does all this tell us about how to charge for toppings on a burger?

                                                                                      1. re: johnb

                                                                                        Let's get back on topic, hounds. A good grilled onion is ethereal. Lawyers are as common as weeds.

                                                                                        1. re: Veggo

                                                                                          Well said, though I will have you know that some of my best friends are lawyers, and I never order grilled onions on my burgers, as you well know.

                                                                                          Now, pursuant to another thread, if I ask that they hold the "grilled onions," that are on the menu and give me a rebate on my burger, because I did not want them?

                                                                                          Just curious,

                                                                                          Hunt

                                                                                          PS Veggo, do not come here over the next few weeks. The misting system just crumped and my main golf course has few trees, even though my ball always seems to be behind one of them.

                                                                                      2. re: jfood

                                                                                        I'm all for a business recovering the incremental cost of added goods and services along with a tidy (but reasonable) profit. So I have no problem with a professional who bills by the hour charging for all the time spent on a client's matter.

                                                                                        But as you note, there are lawyers who charge $25 to send a two-page domestic fax. Some firms have deliveries handled by in-house couriers at $40 per, when an independent courier service will provide the same service for $15. And at some places, a vac-pot of coffee is provided any time clients show up for an in-person meeting - and the client is charged $30.

                                                                                        These practices are abusive, plain and simple. The firms are not covering incremental costs, they're gouging their clients with the goal of keeping each ripoff small enough that it stays under the radar. In my opinion, that's unconscionable.

                                                                                        I don't know the total incremental cost of grilling onions or providing a slice of cheese-like product, but I think it's a fair bet that it's just a few pennies. And I have less objection to a restaurant charging a buck for each of those items than I do to a lawyer charging $25 for a fax that has about the same cost basis.

                                                                                        But let's be honest here - in a place that provides raw onions for free, charging a dollar for grilled onions isn't just a matter of cost recoupment plus a standard margin, it's a blatant attempt to maximize revenue. The owner who does it is turning the grilled onions into a low-cost profit center like the fountain soft drinks.

                                                                                        There's nothing wrong with that within reason, and I don't think the dollar charge is unreasonable. But don't let's pretend that it's something it isn't, either.

                                                                                      3. re: alanbarnes

                                                                                        quit escalating the language here, AB

                                                                                        "profiteer" is a name for a particularly nasty type of person, who offers an essential service or goods to someone desperately in need-- for an exorbitant fee.

                                                                                        when your kid has cancer and someone won't give you medicine until you cough up a grand, that guy's a profiteer.

                                                                                        when your family is hiding from gun-toting killers and your neighbor offers you shelter in his cellar-- if you'll give him your wife's diamond wedding ring-- that's a profiteer.

                                                                                        when you're a poor immigrant who's been deprived of food and water for 2 days in the hull of a ship, and a guy comes around offering bottles of water for $50 a pop, that's a profiteer.

                                                                                        then there's war profteers, wall street profiteers, people who profit from human bondage, these guys. . .
                                                                                        http://www.wirtschaftsblatt.at/home/l...

                                                                                        sorry, i don't feel that anybody who makes a living feeding other human beings deserves to get lumped in with the scum of the earth and then told: "if the shoe fits, wear it". it's a $1 fee for onions, and the establishment may make $0.11 off of it. or they may make $0.40, or $0.05. . . seems like many people on this thread would say that's reasonable, and a price they're willing to pay. but nobody ever died because they were deprived of fried onions, nobody ever lost their house because of a $1 charge for onions at the local diner, and nobody's holding a gun to anyone's head telling them they have to order the onions, or the burger, or go to any particular restaurant in the first place. the customer isn't under any duress, and the charge is not excessive. if you think cooks charging $1 for onions are causing war and genocide and economic collapse, i think you're the one who needs to lighten up, or at least you could have a better choice of words, because i can't help but be very insulted, no matter what type of cheese or cheesefood we're talking about.

                                                                                        1. re: soupkitten

                                                                                          Per the New Shorter Oxford English Dictionary, to profiteer is to "make or seek to make an excessive profit." Full stop. There's no requirement that the goods be essential, that the buyer be in desperate need, that the fee be exorbitant, or that charging it lead to "war and genocide and economic collapse." Just that the profit be excessive.

                                                                                          Food cost percentages at most places tend to run around 20%. Significant variation is to be expected, but If the cost percentage on a slice of cheese added to a burger is 2%, an argument can be made that the seller's profit is excessive.

                                                                                          You've implied pretty strongly that your cost percentages are much higher than that. Assuming that's the case, the comment wasn't directed at you. Why feel insulted?

                                                                                          1. re: alanbarnes

                                                                                            whew. glad to know you're going off of oxford's, instead of the merriam webster, on that one AB. rightee-o, old chap. . . quite. har har.

                                                                                            http://www.merriam-webster.com/dictio...

                                                                                            okay, so i'll take you at your word that you were not trying to be overly nasty with the "profiteer" remark. if you don't mind though, i think this word can have a very ugly connotation, so i'd prefer not to use it after this, personally. maybe we can find a better word to use, i dunno.

                                                                                            to your "excessive profit" point. first you (and not just you on this thread, but *lots* of people) are confusing "markup" with "profit" and they aren't necessarily the same thing. let's look at coffee shops-- they sell lots of cups of coffee, the raw materials are marked up quite a bit, but after their overhead costs & labor a heck of a lot of them are just scraping by. maybe the actual profit, after overhead and labor and taxes and licensing and everything, on a $3.50 coffee drink is $0.25. despite the fact that coffee beans and hot water are cheap, i for one don't feel that $0.25 to the family that runs the coffee shop is "excessive profit." any establishment that sells *only* low priced items, like cups of coffee, or hot dogs, or whatever, either needs to mark those suckers up, or sell *truckloads,* or a happy combination of the two, in order to keep the doors open and the lights on. i hope folks are with me so far.

                                                                                            back to restaurants-- in pricing, the place is going to make a different margin off of different types of items. the place may make a higher margin on steaks than burgers; they may make a better margin on dinner items than on lunch-- but then again, they sell more items at lunch, and at dinner there's less turnover, so they sell less items, at higher margin. . . anyway, this type of situation is really common.

                                                                                            the establishment also frequently has a different margin on different types of items. so a place may make a very low margin on some items and a higher margin on others. beverages (alcoholic or non), desserts, some appetizers, etc. are frequently higher margin items. again, so common you can't walk down the street without tripping over it.

                                                                                            the actual main of the meal might be the item that the place makes the *least* profit on. in fact some establishments like neighborhood bars (like costco in the ot subthread) might have ridiculously low margins on food, or very cheap food specials, because the point is to get people into the establishment with a low priced meal, and once the customer is there, s/he may elect to order a higher margin item, like a beverage or two. so say bill's neighborhood bar loses money on tuesday ten cent wing night @ $0.05 a wing, for example, but makes $0.85 per tap beer. mike's construction crew stops in every tuesday and orders 8 dozen wings. mike drives, so he has a cup of coffee with refills (bill will make $0.35 on this) how many beers must the other guys order, for bill to make a $4 profit? if the guys leave after 1 beer, and bill breaks even, how many guys are in mike's construction crew?

                                                                                            heh heh. don't worry nobody needs to do any math problems, all in fun :-P

                                                                                            okay, so look: let's call a typical low-margin main at sheila's diner a "burger and fries." sheila sells this item for $7, and her margin on this item is only 5%, so she nets $0.35/burger. now: fried onions & cheese are $1, bacon is $1.50. she doesn't have a lq license, so soft drinks only. sheila will net an average of $0.30 per $2 beverage-- different margin, remember? okay: now the burgers at sheila's are nothing special-- but as all the chowhounds in her town know, what's really special about her diner is the homemade banana cream and key lime pies. sheila makes them herself, and although not every customer orders a piece of pie, she nets $1.25 off of each one that does. the pie is totally worth it at $5/piece.

                                                                                            omg is anybody even still reading? okay so customer harry comes in to sheila's and orders a burger and fries, no drink, no pie. sheila makes her $0.35 off of the tab. (and prays that he doesn't order it in to-go packaging, because there goes half of that $0.35-- sorry, nevermind, that's for another thread

                                                                                            )

                                                                                            then in walks customer norbert. norbert orders burger & fries, tea, and a slice of banana cream pie. tab=$14, profit=$1.90---does everybody see that even though norbert's tab is exactly double harry's tab, the profit is way higher on norbert's orders because of the margins? of course whether folks think $1.90 is *excessive* profit. . . who am i to say?

                                                                                            as norbert's paying, customer julie comes in. julie orders a diet soda, and a burger and fries with fried onions and cheese. okay, that's an $11 tab, with profit of $0.30 + $0.35 + x + y. . . depending on sheila's margins on cheese & fried onions, correct? let's ignore any labor costs related to these items, as so many folks on the thread would have us do. nobody stocked them, nobody bought or washed a dish to contain them, they just appeared in the cooler and it takes no labor to prep them or put them on a burger. for sake of illustration, these items appeared via magic wand. okay, so for the sake of argument, everything above the actual cost of the items is *gravy* for sheila. let's say the cost of sheila's cheese is very low, it's processed cheese, but it comes with the little sheet of deli paper between each slice-- remember no labor for sheila to have to do this-- so it works out to $0.20/slice. so sheila makes $0.80 on cheese, wow! okay for the onions-- nobody prepped them, sheila bought them in a 5# pre-chopped bag for $12. assuming no waste, she can get 20 quarter-pound portions out of it, correct? sound right, what with how onions cook down and all? okay so onions cost $0.60. wow that's a lot more than $0.02, isn't it. yet sheila's profit isn't shabby, at $0.40. so sheila makes $1.85 off of julie's $11 tab. hot damn!

                                                                                            but really-- is this profit "excessive?" it's not like people are walking in off of the street and ordering fried onions and cheese without ordering a hamburger. if julie had not ordered onions and cheese, her tab would have been $9, not $11--but sheila would have made $0.65, not $1.85. . . the margins on the add-on burger items made the difference of nearly 2/3 of sheila's profits on this tab. it takes more than 5 customers like harry to equal the house profit of one norbert or one julie.

                                                                                            if the recession affects sheila's area and the harrys become 90% of her clientele, and the julies and norberts are 5% and 5%, how many customers must sheila serve in order to pay her mortgage of $1200? how about if sheila charged just $0.50 for cheese, but eliminated fried onions from the menu entirely?

                                                                                            thanks everyone for sitting through my annoying theoretical math problems, but i hope you see my point. customers have every right to pull a "harry" and only order a low-margin main course, sitting there and make themselves boca-tea, in order to deprive the owner-operator of an establishment any real profit from serving them. but as consumers and chowhounds, sometimes perhaps we should order an "extra" off of the menu-- nice bottle of wine, tempting dessert, one-effing-dollar fried freaking onions in a diner. . . whatever. because we'd be missing that banana creme pie, if it ever went away.

                                                                                            thanks for considering it anyway
                                                                                            --sk

                                                                                            1. re: soupkitten

                                                                                              Thanks for the detailed examples. Yes, I understand that restaurant owners need to make a living, and that different food items have different markups.

                                                                                              But let's get back to the point I made in my original post. You continue to include the cost of onions as part of the cost of grilled onions. If raw onions are free - and they are every place I've ever bought a burger - you can't claim that the cost of grilling the onions includes the cost of the onions themselves. That cost is already built into the cost of the burger.

                                                                                              What's so hard to understand about that?

                                                                                              PS - if Sheila is paying $1.70 for a soft drink and $0.20 for a slice of processed cheese, her inadequate profits arise from her sourcing, not her pricing.

                                                                                              1. re: alanbarnes

                                                                                                But let's get back to the point I made in my original post. You continue to include the cost of onions as part of the cost of grilled onions. If raw onions are free - and they are every place I've ever bought a burger - you can't claim that the cost of grilling the onions includes the cost of the onions themselves. That cost is already built into the cost of the burger.
                                                                                                ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

                                                                                                Unless it is the policy to still put the lettuce, tomato and onion garnish on the plate..... the grilled onions, may or may not be placed on top of the burger, but more often than not, the garnish will still be put on the plate. Also, a onion slice or two is not the same as grilled or sauteed onions. Cooked onions of any kind usually require the full onion to be cooked for enough volume for the topping to be realized., so I would disagree with your position on this one detail.

                                                                                                1. re: fourunder

                                                                                                  Good points. If you order grilled onions and get them in addition to raw onions, then you have to include the produce cost in the incremental cost of the grilled onions. But AFAIR I've always seen grilled onions served instead of - not in addition to - raw onions.

                                                                                                  Also, it's true that it takes more than an ounce of raw onion to make an ounce of grilled onion. So if a serving of grilled onions actually requires more vegetables than a serving of raw onions, the cost of the additional produce has to included in the incremental cost.

                                                                                                  But soupkitten appeared to be including the all produce and prep costs as part of the incremental cost of grilled onions. Regardless of whether it's reasonable to charge fifty cents or a buck or ten bucks for grilled onions, that's just faulty logic.

                                                                                2. re: johnb

                                                                                  Well at least the 202 course has been upticked from Intro to Theory, thank you.

                                                                                  Since theory is now on the table

                                                                                  When one does not allocate a profit margin to marginal costs then the overall contributed margin of that product is a contra-value to the profitability of the company. Economic theory (i.e. course 202) would argue that when sales of negative-contributed margin products approaches infinity, it has eaten through (pun intended) all of the profits of the products that were falsely "allocated" all of the fixed costs reducing the profitability of the company to, first zero, and then to negative infinity.

                                                                                  In layman's terms company goes under.

                                                                                  The supply and demand argument has significant factors in it as you describe as emotional sensitivities to the equation. That theoretical discussion is probably not covered in a general 202 course but probably is found in a 300 or 400 level course.

                                                                                  If someone wants free onions then the next time will be free onions and bacon, then add some cheese, then change the burger to a steak... Ah yes the wonderful world of economic theory never stops until one reaches infinity.

                                                                                  1. re: jfood

                                                                                    jfood, your post is quite entertaining as usual, but a bit muddled, I think :). Sorry if I confused the content of 202 with 404, but it has been a few years. BTW, based on your redacted post, I thought you might like the Mark II version of mine better than the Mark I version.

                                                                                    As to free onions leading to free bacon and so on until the company goes under, well the world of economics is not quite that wonderful, but I think you knew that. Note I never said anything was or should be free--it's only a matter of how you charge for it, ie how you present it to the customer. The goal remains to maximize revenue/profit, just do it in whatever way makes the medicine go down easiest and thus makes your place a popular hang-out. Nit picking the customer by charging add-ons for everything under the sun seldom accomplishes that. But of course, it all depends on the psychology of your customer(s), otherwise known as the market.

                                                                                    1. re: johnb

                                                                                      And, as you can see here, lots of otherwise testy people don't think that being charged for grilled onions is being nitpicked upon.

                                                                                      1. re: Karl S

                                                                                        That is true, but there are others who do, including the OP who started this whole thing (personally I'm basically neutral, by the way), and everything depends on how many fall into each camp. Collecting a buck or less for an add on is a pyrrric victory if even just a few don't come to your place because the competition down the road doesn't do it.

                                                                                      2. re: johnb

                                                                                        Hey whatever works to get fried onions on jfood's burger is fine with him.

                                                                                        He just resents this entitlement concept that has become so pervasive, urghh drives him nuts.

                                                                                        But your basic construct of, hey it's already sitting there seems a bit over the top. Understandable at one level but jfood cannot buy into it.

                                                                                        It reminds him of two Februaries ago when JetBlue had all those issues at JFK. Everyone they interviwed said "I'll never fly them again." Yeah right.

                                                                                        And if a customer does not come back because of a fifty-cent charge for fried onions, then they were not a good customer. For every poster that says how come they are nickle and diming me there should be one to say why not pay for what you order. That $0.50 is a true zero sum game, someone has it and someone does not at the end of the day.

                                                                                        Speaking of fried onions, jfood just had two HN dinner franks for lunch with some caramelized vidalias (two hour reduction) and he would have paid $1 extra per dog for them. Over the top good.

                                                                                        What bothers jfood more than the charge is the total incompetence that some restaurants show in making them. Freid onions take some time and love. Throwingthem on the hot part of the flattop until they have some burn marks is totally unacceptable.

                                                                                        Oh well, back to grilling a whole chicken under a brick in the rain.

                                                                                        Have a good 4th.

                                                                                        1. re: jfood

                                                                                          To anyone who cares,

                                                                                          I used to own a restaurant where I tried to keep the prices down and let the customer decide what was best for them. We gave out free cole slaw and new pickles on every table...all you could eat. We gave out a 10 ounce burger for $4.99. Cheese burgers and bacon were a dollar additional for each. We provided a leaf lettuce, tomato slice and slice of red onion. as free garnish. Fried/Sauteed onions were .75 additional and Fresh Cut French Fries were also a Dollar additional. A side house salad was also an additional dollar. We did not offer a Deluxe combination on the printed menu.

                                                                                          Many times we would get comments only on the fries and cole slaw...never the toppings with regard to additional costs. Some people who ordered the fries and salad felt both items should come with the the burger and not be an additional charge of $1.00...instead of cole slaw, they felt they should have been able to substitute the salad for free.

                                                                                          In the end, rather than have to deal with the comments, we simply raised the prices to 8.99- 9.99 for the burger/cheeseburger (a 4.00 increase) and it included the fries with garnish(L-TO). Bacon, Sauteed Onions and Mushrooms were still additional. We never heard a complaint again on the fries being extra. For the customers who said they did not want the fries(very seldom), we reduced the price one dollar. We no longer offered the dollar side salad. If the customer requested one, we just gave it to them gratis in their minds.

                                                                                          Peace was maintained. Bottom line. Nothing was free and everything is somehow included in the price....even if it has to be classified as incidentals.

                                                                                          I now believe everything should be included in the price somehow (as an owner), the bread, catsup, mustard, steak sauce and or bbq sauce. Giving choices is not worth the complaints. I tried to keep the check totals down for the customers....but it wasn't worth the negative perception of those who complained. In the end, I believe we gave a quality product and it was worth what was charged without any worries.....for myself and from the customers.

                                                                                          1. re: fourunder

                                                                                            10 oz cheeseburger with fries for 999 and a few extra cents for some fried onions and bacon?

                                                                                            Major deal for jfood.

                                                                                            1. re: jfood

                                                                                              you know I dislike how restaurant customers think that restaurant owners 'nickle and dime' them for the extras. It's never the owners who think that the customer is 'nickle and diming' them that we hear from. It would be an interesting POV.

                                                                                              I personally think that these whining and whinging customers need to think business. If every customer wanted free fried onions that would be x lbs of extra onions a week, labour costs and so on. Now watch prices rise. And think about your own businesses or the ones you work in.

                                                                                              1. re: smartie

                                                                                                Jfood hears you smartie. All the self-entitlement and the i not retruning if you make any money on me is just a silly position.

                                                                                                1. re: jfood

                                                                                                  yup, there's no such thing as a free lunch.

                                                                                                2. re: smartie

                                                                                                  Are you sure? Whether or not you like their burgers, giving out free grilled onions doesn't seem to have hurt either 5 Guys or (I'm pretty certain, but I live in the East) In-n-Out, arguably two of the most successful burger businesses out there. And their prices are not all that high either. What do they know that we don't know? If they had done Activity Based Costing from the get go, maybe they'd have charged extra, and maybe then they'd be stuck in Limbo like their competitors. Who knows?

                                                                                                  1. re: johnb

                                                                                                    the process map that bagelmann has described is a very detailed one in which nothing starts into the cooking process until the order is entered. So yes, jfood firmly believes that 5-guys has performed ABC to arrive at their all-in price including onions. They probably like when someone like mrs jfood decides not to take them and the loved jfood when he ordered without lettuce and tomato. Glad you have bought into the way thriving businesses are surviving.

                                                                                                    But these onions are NOT free. They have been calculated into the cost and the price. That is like saying the activities are free at and all-inclusive resort, or the lobster is free at a buffet.

                                                                                                    1. re: jfood

                                                                                                      right. I don't know how much these 2 examples charge for their burgers but say it's 4.99 with onions. Perhaps they would have charged 4.50 but they costed in the onions and are happy when customers order them without which is saving them a few cents multiplied by the number of customers who don't want onions. Yippee they think, we sold 150 burgers today of which 82 wanted no onions, saving us $x.

                                                                                                      1. re: jfood

                                                                                                        Of course they are priced in. That's precisely what I've been saying all along. But they haven't been priced in by charging explicitly for the grilled onions, doing some silly cost allocation of cool box space and all the rest. They price them in somewhere else where the customer is willing to accept the charge and still feel he is getting a good deal and being treated well. That's what smart businessmen do, and it's what separates successful businesses from failures. Allocating costs to everything and trying to relate all prices to such allocated costs is a fool's errand. Yes yes jfood, now you have gotten it!!! Go out and explain it to your clients.

                                                                                                        And on that note I'm going to bed.

                                                                                                        1. re: johnb

                                                                                                          it just shows that it's all in the mind!

                                                                                                          the complimentary meal on board a long flight, along with drinks and newspapers are all factored in. Drop the price by $20 and charge for everything and people will complain.
                                                                                                          Charge a patient $150 for an office visit and do urinalysis, blood work, give paper gown, change roll of paper on exam bed, EKG etc and it's a bargain. Charge $100 and extra for all of the above and everyone complains.
                                                                                                          If you think something is for nothing then it's a bargain, if everything is listed and charged it's nickel and diming.

                                                                                                          1. re: johnb

                                                                                                            Have they been priced in properly or are they extra?

                                                                                                            If they have all been priced into the twenty onion sandwiches then there are none extra for sale as an extra to the onions.

                                                                                                            You cannot have a fully allocated pricing and have extras, they are magnets of similar polarity.

                                                                                                          2. re: jfood

                                                                                                            Having discussed 5 Guys pricing with one of the franchise owners I know well, the following formula is in use (at the locations he owns)............

                                                                                                            Food cost times X + price. It is assumed (from studying ordering history) that a patron orders an average of six items on the burger (Lettuce, tomato, mushrooms, onions, pickles, sauce). All toppings are cost averaged together. So, Food cost is: Patty (or 2), bun, toppings (average cost of 6)
                                                                                                            If a patron orders less than 6, it makes up for a patron ordering more than 6. Most patrons try a lot of toppings the first time because tghey are impressed by the selection available at no additional charge, BUT they tend to use less toppings on repeat visits, as too many together lose their distinct flavors.

                                                                                                            Mrs. Bagelman uses lettuce, tomato, mushrooms and ketchup.
                                                                                                            Bagelman01 uses Lettuce, pickle, mushrooms, fried onions and barbecue sauce.
                                                                                                            bagelette #1 ketchup only
                                                                                                            Bagelette#2 extra pickle, lettuce, onions, kethup

                                                                                                            REMEMBER-these are not grilled onions, but softened translucent in oil.

                                                                                                          3. re: johnb

                                                                                                            Whether or not you like their burgers, giving out free grilled onions doesn't seem to have hurt either 5 Guys

                                                                                                            ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

                                                                                                            johnb,

                                                                                                            Sorry, but I'll have to disagree with your example of FiveGuys. Yes the toppings are free according to their menu board and policy, however, their burgers are only 3.3 ounces by company specifications. I cannot recall the prices for their burger at the moment, but last time I did a calculation on their value, I recall the extension was either $14 or $16 per pound for their fast food burger. You are getting charged heavily for those onions you seem to think are free.

                                                                                                            1. re: fourunder

                                                                                                              Looking at the cost per pound for the ground beef is pretty meaningless.
                                                                                                              McDonald's value Menue in our area has a single hamburger for $1.00
                                                                                                              They are 1.6 oz. So the per pound cost is $10 for NOT fresh made to order patties.
                                                                                                              5 Guys is $4.89 for a regular burger (junior cost les, but more per pound): so hamburger is $11.85 per pound.

                                                                                                              I'd gladly pay a 19% premium for FRESH, never frozen meat, patties shaped by hand, not compress in a machine.

                                                                                                              Furthermore, if you consider the $4 plus pricing on the 1/4 pounder at McDs, the price per pound is higher than a 5 Guys regular (2 Patty) burger

                                                                                                              Lastly, you don't get more toppings based on the size of the burger

                                                                                                              1. re: bagelman01

                                                                                                                Looking at the cost per pound for the ground beef is pretty meaningless.
                                                                                                                ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

                                                                                                                Unless you consider what I receive as a consumer.....a pre-cooked weight burger patty of 3.3 ounces unable to be ordered as desired and usually is overcooked with fries and a beverage that will run you around $11-12....plus tax and tip into the jar on the counter.....it's not a bargain....especially after you tell me I'm paying for the cost of the six toppings which I may or may not have on my order.

                                                                                                                I can easily go to some restaurants or diners in my area and receive a burger cooked to my liking and probably double-triple in size with the same fries and beverage.....and or the option of an adult beverage for the same amount it would cost me at Five Guys. In fact, there is a local restaurant/pub I know where I can get an 8ounce New York Strip with fried onions and french fries for $14.00 @ lunchtime.....suddenly the Five Guys burger doesn't seem all that attractive or tasty compared to my other options available to me.

                                                                                                                1. re: fourunder

                                                                                                                  Regular burger (2 patties), Regular Fries, Regular fountain soda PLUS TAX=$9.94 in New Haven County, CT and $10.04 in Fairfield County, CT. Don't know where it would cost $11-12 PLUS TAX in a 5 Guys.....

                                                                                                                  Tipping is an individual decision. In this area very few people put money in a tip jar when ordering at a fast food counter. The order taker doesn't serve you. No one delivers food to your table, or brings you refills on drinks.

                                                                                                                  I don't tip when ordering at 5 GUYS, but tipping is for another discussion, not the cost of grilled onions.

                                                                                                                  1. re: bagelman01

                                                                                                                    bm,

                                                                                                                    Why is it you only state what fits your argument when you discuss these topics....
                                                                                                                    ~~~~~~~~~~~~~~~~~~~~~

                                                                                                                    Tipping is an individual decision. In this area very few people put money in a tip jar when ordering at a fast food counter..............I'm sure you are wrong about others, but it's nice to know you do not.
                                                                                                                    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

                                                                                                                    Don't know where it would cost $11-12 PLUS TAX in a 5 Guys............

                                                                                                                    Did you ever hear of a *LARGE* sized beverage and order of fries?.....or, I would be willing to bet any Manhattan location would satisfy your curiosity.

                                                                                                                    http://www.fiveguys.com/menu.aspx

                                                                                                              2. re: fourunder

                                                                                                                "You are getting charged heavily for those onions you seem to think are free".

                                                                                                                Precisely. And that is perfectly correct pricing (I'm not sure I agree with "heavily", but OK). While there is no specific charge for the add-ons, still nothing is (truly) free, even though it is viewed as such by the customer, which is the market. Net result--The customers are happy, that sale makes money, and the business is expanding and very profitable. Win-win. That is how pricing is done by successful businesses, by listening to the market and giving it what it responds to, not by costing every little item and trying to recover costs related to each individual item, which as I have said repeatedly, is a futile exercise.

                                                                                                                Smartie's post above got it right.

                                                                                                                1. re: johnb

                                                                                                                  which brings us full circle to the other post here where someone asks if it's ok to get a discount if you want an item removed from the list of ingredients!!

                                                                                                                  1. re: johnb

                                                                                                                    That is how business is done by "seat of the pants" businessmen.

                                                                                                                    Maybe you are right though in that many restaurant owners price this "market only" way. That could be the reason why 90% fail. Yup, that sounds like a good correlation. Guess you and jfood have different definitions of "successful businessmen".

                                                                                                                    1. re: jfood

                                                                                                                      Who said anything about seat of the pants? Certainly not I. Market based pricing can and should be done using a scientifically-based approach, with the objective of maximizing revenue and profit, ie achieving success. There is no connection between pricing based on market factors and sloppiness. And there is also no connection between cost allocation pricing and "science." If that is what you are telling your clients, then I fear for them. And by the way, I thought ABC was a management fad of the 90's that had long since been shown the door. But if you can make money flaking it, more power to you.

                                                                                                                      1. re: johnb

                                                                                                                        "psychology of your customer(s), otherwise known as the market." - OKeedokee, price according to psychology

                                                                                                                        "giving out free grilled onions doesn't seem to have hurt either 5 Guys" - Okeedokee, you do think they are free

                                                                                                                        "They price them in somewhere else where the customer is willing to accept the charge and still feel he is getting a good deal and being treated well" - sounds like psycological pricing again

                                                                                                                        jfood will pass on to his customers that the success that they have enjoyed over the years has been futile by knowing what products cost and then charging a reasonable price for the products and services. All we need to do was perform some psychologic seat of the pants analysis and mumbo jumbo the money flows to the bottom line.

                                                                                                                        That sounds like more of a middle eatern bizarre pricing theory than pure economic theory, which you presented in your previous post. And it strikes jfood as an agreement to the persistent upselling that occurs in may businesses, including restaurants.

                                                                                                                        As they say on the People's Court. Stick me with a fork, I am done.

                                                                                                            2. re: jfood

                                                                                                              Major deal for jfood.
                                                                                                              ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                                                                                                              jfood,

                                                                                                              Major deal good......or

                                                                                                              Major deal bad?

                                                                                                              FWIW, the add-on bacon was four strips for the dollar....and if the customer wanted mushrooms and onions, they were only charge for one item.

                                                                                                              ;-)

                                                                                                              1. re: fourunder

                                                                                                                a 10 oz burger w all those toppings is better than good.

                                                                                              2. No. I order mine without, so it is moot to me.

                                                                                                Hunt

                                                                                                1. This post came to mind today when I was getting my coffee before work. The girl in front of me ordered a regular iced coffee, with an extra shot of espresso. It clearly states they charge $1.00 for a shot added to any drink. Barrista goes to make it, the cashier is about to ring her up, and then agains mentions they will charge the added $1.00. The girl became VERY upset, and freaked out over it! She made the barrista stop completely, saying she's never been charged that, how dare they!!?? Everyone looked at her as if she's lost her mind.

                                                                                                  If the price is listed, I never have a problem with it. If I want bacon, or a perfect addition of grilled onions, cool beans. $1.00 is a small price to pay, if i'm craving it.
                                                                                                  Now, sometimes waitstaff will suggest these "upsells" and not mention the additional cost. That's borderline sneaky and greedy- BUT...All it takes is that happening one time, for you to learn to ask "Is that included in the standard price?" But, as others have mentioned, there's no free lunch. Or grilled onions, for that matter!

                                                                                                  42 Replies
                                                                                                  1. re: Honeychan

                                                                                                    Honeychan,

                                                                                                    I am with you. Maybe it's just my backwoods sensibilities, but if I deviate for the stated, I expect to pay, and point this out. If I want more, of different, then I expect to pay, and am ready to do so.

                                                                                                    If I want less, I expect to pay full-price, and live with that too.

                                                                                                    Hunt

                                                                                                    1. re: Bill Hunt

                                                                                                      Fair enough. But here's the corollary question. What if they cheerfully give it to you and don't in fact charge you extra. How does that make you feel about the place? Does it make it more likely, cet. par., that you will come back and/or recommend the place to your friends?

                                                                                                      1. re: johnb

                                                                                                        If I offer to pay, and they decline, then I enjoy, and usually tip even better, provided that the service was also good.

                                                                                                        I say "thank you" a lot.

                                                                                                        Hunt

                                                                                                        1. re: johnb

                                                                                                          Fair enough. But here's the corollary question. What if they cheerfully give it to you and don't in fact charge you extra. How does that make you feel about the place?.......
                                                                                                          ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

                                                                                                          If the decision is made by ownership....good. If the decision is made by management, good or arguable. If a server makes the decision without approval from manager or owner.....I would consider that theft on the part of a server trying to receive a higher tip, cheerfully given or not.

                                                                                                          1. re: fourunder

                                                                                                            Bill and fourunder

                                                                                                            Thank you both for responding to my question, but neither of you has actually answered the core of it, so allow me to try again.

                                                                                                            Here are the hypothetical facts. You are in a restaurant and you want grilled onions on your burger. You inquire, and are told that, as mentioned in the menu, grilled onions and other toppings are provided at no extra charge. You enjoy your burger with grilled onions.

                                                                                                            The question is this. Given this policy on the part of the restaurant, and anything you infer about the place as a result of it, are you more likely to return than if they charged for the grilled onions. Also, are you more likely to recommend the place to your friends?

                                                                                                            1. re: johnb

                                                                                                              The question is this. Given this policy on the part of the restaurant, and anything you infer about the place as a result of it, are you more likely to return than if they charged for the grilled onions. Also, are you more likely to recommend the place to your friends?
                                                                                                              ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                                                                                                              I would not base my decision on any return to any establishment based solely on the toppings of a burger, whether I was charged for it or given it for free. I would only return or recommend the place to a friend based on if I like the burger itself and how it was prepared and presented to me....not on whether a topping was free or not. I've ordered many things where it sounded great on the menu or blackboard, but when it reached my table and I tasted it.....I immediately came to the conclusion I ordered the wrong item and wished I had ordered something else. Even though it was a poor decision on my part, I did not blame the restaurant and have returned to any establishment where this was typical of my experience.

                                                                                                              Using Five Guys Burgers as an example....I would not go back there for a burger....I would not recommend them for a burger......I have gone back and have ordered fries only.....I would recommend to friends if they want a good burger to seek another place, but if they want some good fries, by all means go to Five Guys.

                                                                                                              Now if your question had nothing to do with the burger itself, but a place that offered good grilled onions....yes I would recommend the place....but if the place had horrible grilled onions, no I would not recommend. This would be true if the onions were free or charged for.

                                                                                                              ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                                                                                                              "You enjoy your burger with grilled onions".

                                                                                                              Yes, I would recommend the restaurant all things considered.

                                                                                                              1. re: johnb

                                                                                                                Wouldn't make a necessarily make a difference to me. The policy itself is only one part of a much larger question of value - the question of whether toppings are gratis or a la carte is insufficient to answer the question of value, let alone other relevant considerations.

                                                                                                                1. re: johnb

                                                                                                                  Let jfood answer the question as well.

                                                                                                                  If that were to occur jfood would think nothing more, nor nothing less of the restaurant. Likewise it would have absolutely no effect on whether jfood would recommend the restaurant.

                                                                                                                  People who get excited about free onions, or free refills or free tomatoes are the same people who go to Costco to get the freebies.

                                                                                                                  1. re: jfood

                                                                                                                    The fact that you mentioned Costco and its freebies in this thread is interesting and pointed, and it goes directly to real underlying issue, the truly important question of how customers react to things they perceive as giving extra value and how restaurants and other businesses might take that into account when setting their prices.

                                                                                                                    Do you suppose Costco, an extremely successful company, gives out those freebies out of the goodness of their heart? If you think that, you would be wrong.

                                                                                                                    Do you suppose Costco gives out those free pizza fingers or whatever in order to convince people to buy more pizza fingers? If you think that, you would be wrong, although I'm sure they sell a few more fingers in the process..

                                                                                                                    Costco does the freebies to bring more shoppers into the store more often, as you suggested, and it works. I have no inside information as to how many more show up, and I'm sure that few would ever say, or even believe in their own mind, that freebies cause them to go more often, but there is little doubt in my mind that Costco does tens of millions or more of extra sales annually because people like their experience there, of which the freebies are an integral part. A lot of that revenue flows to the bottom line, and Costco's extra profit unquestionably makes up for the cost of providing the freebies many times over.

                                                                                                                    To my mind, this is a perfect example of not charging what something "costs," but using it as a way to increase profits through another mechanism, the magic of volume where most of the costs are fixed. IMO It should be an object lesson for any restaurant owner or other businessperson who deals with the general public.

                                                                                                                    1. re: johnb

                                                                                                                      I could be wrong, but aren't the freebies, if not wholly or just in part, subsidized by the makers or manufacturers of the products?

                                                                                                                      1. re: fourunder

                                                                                                                        I'm pretty sure this is the case. I've heard the folks giving the samples telling people "I'm sorry, I don't work for Costco, I don't know" when they ask them where something is.

                                                                                                                        1. re: Morganna

                                                                                                                          They are indeed subsidized by the food's manufacturer.

                                                                                                                        2. re: fourunder

                                                                                                                          Could well be, at least in many cases, since there surely is at least some increase in sales of the specific products, but it's hard to imagine the specific product sales increases overall justify the amount of free stuff handed out, particularly in view of the sheer numbers of people who cruise around there glomming free stuff with little thought of buying all those products. From Costco's viewpoint, I'm satisfied that increasing store volume is the primary reason they do the freebies.

                                                                                                                          1. re: johnb

                                                                                                                            You can't even step foot in Costco unless you are already a member so Costco really doesn't really need to incentivize it's customers with freebies. They are working with a motivated customer base that shops there regularly. A free piece of cheese really doesn't change the equation.

                                                                                                                            1. re: KTinNYC

                                                                                                                              KT,

                                                                                                                              You must have missed the thread on how to sneak into a Costco to purchase a Hot Dog........:-)

                                                                                                                              http://chowhound.chow.com/topics/625572

                                                                                                                              1. re: fourunder

                                                                                                                                I did, please point to that thread! The Costco hot dog and soda is an awesome bargain.

                                                                                                                                  1. re: fourunder

                                                                                                                                    Thanks, fourunder. I'm not sure how I missed this thread.

                                                                                                                                    You pasted the link twice. Here is the link for anyone reading along http://chowhound.chow.com/topics/625572

                                                                                                                              2. re: KTinNYC

                                                                                                                                I don't see it that way. Being incentivized to becoming/staying a customer (taking out a membership, and renewing it each year) is one aspect. But also powerful is being incentivized to come back more often.

                                                                                                                                Actually, as I think about it, getting people to renew that membership is really a key to a lot of things, and the freebies surely play a role in that. I'll bet a lot of people say to themselves, "it's $40/50 but heck I can eat that much free stuff" and convince themselves to go ahead. Sounds silly, but in the aggregate it keeps some of them coming back.

                                                                                                                                1. re: johnb

                                                                                                                                  Actually, as I think about it, getting people to renew that membership is really a key to a lot of things, and the freebies surely play a role in that.
                                                                                                                                  ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
                                                                                                                                  jb,

                                                                                                                                  I'm with you on a lot of your comments thus far , but this one.......Sorry, but no.

                                                                                                                                  I'm a pretty cynical guy....especially when it comes to topics on this site...but even this one is a stretch for me to believe to be even remotely true....unless of course, you are one of those who only go on your lunch hour.

                                                                                                                                  1. re: fourunder

                                                                                                                                    Well OK then, but if my theory is wrong, the fact remains they do give away a lot of stuff, and they aren't stupid--there has to be a reason. So what's your theory?

                                                                                                                                    I personally don't have a Costco membership--I did once, but didn't renew because I didn't see the value in it for me. But then I never did partake in all those freebies. The lines were too long to suit me. Hmmmm.

                                                                                                                                    My son-in-law is a Costco freak (he even goes there sometimes to buy just a gallon of milk). So when we make the day's drive to visit them I go along and stock up on things I can use, like parm. cheese. Works for me. I still get a kick out of watching the lines for the freebies, not to mention the huge boatloads of merchandise the bargain hunters are buying. Got to be a connection there somewhere :)

                                                                                                                                    1. re: johnb

                                                                                                                                      They give freebies to to make the new products known and entice shoppers to purchase on a regular basis or as an impulse purchase. The mere fact they give out free things means little. If they gave out only free crackers without all the dips or cheeses to sample, or poured out 2 ounce samples of Poland Spring Water or Kirkland 1% Milk on a daily basis, do you really think anyone would look forward to any such items and would renew their memberships for such freebies.

                                                                                                                                      All Buying clubs win or lose members solely on the perceived value of the products they offer or carry at any given time. Once the brand recognition is lost and it's replacement is seen as inferior, the BC loses it's member to another BC or the regular supermarket(who also gives freebies).

                                                                                                                                      As for the products, I know the guy who owns the IRON CHEF brand of foodstuffs and sauces. He sells to Costco and tells me if his items sit on a shelf for more than 30 days, the products are discontinued. The manufacturers and Costco both have vested interest to get the products out and the membership has to be made aware what the products taste like and what's new and available.

                                                                                                                                      Freebies plays a very important role in sales first ..... and not membership retention, which is a very minor consideration.

                                                                                                                          2. re: johnb

                                                                                                                            Wow...thank you so much. jfood has not laughed that much in a long time.

                                                                                                                            Each paragraph just got funnier and funnier. He thought at the end you were going to say that the best business model for a restaurant was a soup kitchen. Drats, jfood thought he had your punch line.

                                                                                                                            Jfood also learned from another poster that when you write something as sarcastic and silly as this you are supposed to place the little P-) sign at the end of the post.

                                                                                                                            Whew, jfood has to grab another kleenex to wipe his eyes after crying and laughing simultaneously.

                                                                                                                              1. re: jfood

                                                                                                                                Don't forget, it was you, not I, who initially pointed out that the freebies bring in more customers. I happen to agree with your insightful point.

                                                                                                                                1. re: johnb

                                                                                                                                  At least one of your conclusion in the first paragraph is correct. And jfood has never written fiction, is not a cost consultant and will not comment on the brains of Costco management as they do a very nice job and jfood very much respects their business acumen.

                                                                                                                                  Jfood believes that samples are an excellent means of selling products. It has been shown through numerous studies that impulse buying is a tremendous additive factor to net income. Costco, and both of its previous pre-merged companies (one of whom was a client of jfood's), thrive on the impulse. Just look at the check-out line; rare that you see someone with one item.

                                                                                                                                  But most of your conclusions are so full with misconceptions that jfood would not know where to start but let him try.

                                                                                                                                  Samples are in no way there to retain membership. They are there to sell products. Most times Costco does not even pay for the samples being given away, but the manufacturer is absorbing the full cost, including the people with the funny hat. But even if they did the delta to net income from the impulse buyer would totally offset any cost of the samples.

                                                                                                                                  And to your request:

                                                                                                                                  -If you were an adviser to Costco, would you tell them they should stop giving things away and start costing out the samples and charging for them at their cost?
                                                                                                                                  Answer - No and charging at your cost is just silly and a recipe for bankruptcy

                                                                                                                                  - as might be inferred by many of your comments in this thread?
                                                                                                                                  Answer - Your inference is wrong

                                                                                                                                  -What would be your advice to them?
                                                                                                                                  Answer - Allow products with the highest gross margins access to as much shelf space as possible until such time as the marginal income from that increase shelf space starts diminishing. If a product cannot generate a threshold CV then use the shelf space for a higher CV product. Advise the manufacturer of these decisions and allow them to attract buyers to the product through samples or store coupons (Costco does not accept manufacturer coupons)

                                                                                                                                  -What is your prediction as to the effect your advice would have on their business? Answer - you figure it out, it ain;t that hard

                                                                                                                                  -Why do you think they doing what they are doing, ie giving things away not costing them out and charging for them?
                                                                                                                                  Answer - Look up the concept of "loss leader" in your basic retail pricing book, then look at the grocery store circulars that arrive in the mail on thursday and see the advertisements for Coke one week and Pepsi the next. That will give you a real life answer to the "loss leader" research. Then read the chapter on impulse buying and look at the business model for Costco. Then connect the dots.

                                                                                                                                  BTW - Your analogy of trying to place loss leaders in the same category as fried onions as a freebie is totally false as well. But at least there is consistency in your conclusions.

                                                                                                                                  1. re: jfood

                                                                                                                                    Well, it would seem the differences between you and me are not as great as either of us may have thought. I don't disagree with most of what you have said, and am willing to accept that perhaps some of your disagreements with me stem from my not having expressed myself as well as I might have.

                                                                                                                                    However, I will say that just because Costco's sample program pays for itself immediately, that in no way shows that it isn't also an important aspect of the company's image among its "members," and potential members. I remain convinced that the marketing folks at Costco, in their heart of hearts, know full well that it is very much a non-zero impetus to customer counts, general sales, and memberships, in addition to sales of the sampled items. I again note it was you, not I, who initially pointed out that the Costco freebies bring in traffic to the store, i.e. increase general sales.

                                                                                                                                    Your discussion of shelf space was nice but essentially unrelated to the issues at hand, not to mention it can be found in any Marketing 101 textbook. Also, giving samples away and having loss leaders is not the same thing. And as an aside in my view neither Coke nor Pepsi is "loss leading" anything during their "sale weeks." To me those are not loss leaders; they are the real prices, and they very likely cover full costs most of the time. The off-weeks are for the super profitable excess prices. Most people just haven't caught on to how they are being shafted by their friendly local bottler, who is selling them cheap sugar water (using even cheaper HFCS) and laughing all the way to the bank. But I digress.

                                                                                                                                    And I'm not sure what you are referring to when you say I tried to put loss leaders in the same category as fried onions as a freebie. In this recent set of posts I have been mostly talking about "free" samples, not loss leaders.

                                                                                                                                    This has gone on long enough. To restate as simply as I can, my main point from the beginning was that an optimal pricing strategy, for some businesses including restaurants, may well include selling some things (but not all things) at a price below fully allocated cost, but seldom below marginal cost. Even selling below marginal cost, or going to the limit and giving things out for no charge, may in certain carefully defined situations also be optimal, i.e. if by doing so prices elsewhere in the product mix can be raised while the customers feel they are, overall, getting a better deal, and/or if it has the effect of raising the firm's total revenue more than the marginal cost it occasions. All of this is logical and very basic cost theory, in which I too was schooled and have even had some experience.

                                                                                                                                    1. re: johnb

                                                                                                                                      Para 2 - I again note it was you, not I, who initially pointed out that the Costco freebies bring in traffic to the store, i.e. increase general sales. - Huh? Where did jfood state that samples bring in people? jfood said it increases impulse buying...totally different.

                                                                                                                                      Para 3 - Starts nicely then goes to that place in life where chicken little meets Pinocchio.

                                                                                                                                      Para 4 - If you cannot see the overlap between loss leaders and samples, then jfood is way too tired after a long day at work to teach that simplistic concept.

                                                                                                                                      1. re: jfood

                                                                                                                                        As I noted below, I'm trying to let go of this bone, so I'll limit my response to the question you asked me in your first point. In a previous post (July 4, 4:53 pm) you brought Costco into this thread when you said:

                                                                                                                                        "People who get excited about free onions, or free refills or free tomatoes are the same people who go to Costco to get the freebies."

                                                                                                                                        Well, my read of that is that you said there are people who go to Costco to get the freebies. Whether that's a good thing or not, it sounds to simple-minded me like increased traffic.

                                                                                                                                        1. re: johnb

                                                                                                                                          jfood can understand that interpretation. Thanks for the clarification.

                                                                                                                                          Jfood was commenting on the people not the cause-effect of the freebies. if one can get excited about free fried onions and recommend a place because of this then those same people get excited about a free piece of crappy frozen pizza at Costco.

                                                                                                                                          Similar to the concept of the people who stop at the end of the escalator are the same people who get on a half filled elevator, push the top floor and then stand right in front of the door, then get angry because others need to get off at their floors first.

                                                                                                                                          Both are a silly part of the gene pool.

                                                                                                                                          Ciao

                                                                                                                                          1. re: jfood

                                                                                                                                            I sometimes fantasize about shooting people who push both the up and down call buttons, then, when the elevator stops, ask which way it is going.

                                                                                                                                      2. re: johnb

                                                                                                                                        How is this Costco's sample program? As you have been told by a number of different sources the program runs independently. You just won't let go of this bone and as it is the crux of your argument, that the samples are given to bring people in the stores, your entire argument is built on a falsehood.

                                                                                                                                        1. re: KTinNYC

                                                                                                                                          I really do want to let go of this bone, but you say I have built my argument on a falsehood, so to that I will respond.

                                                                                                                                          It is true that the samples are not at a direct cost to Costco, and outside (tho partially Costco- owned) firms do the work. If you want to say therefore that it is "independent," and not Costco's program, fine. My view is broader, i.e. that the samples are also an integral part of the Costco image, no matter how they are paid for or who is involved in handing them out. Costco, a smart company, manages its image very closely. They certainly manage what is going on in their stores and use it to their benefit in multiple ways. The fact that the samples pay for themselves does not mean that they don't have other benefits. I think the samples do have other benefits, like increasing traffic, and they do manage it to maximize its benefits for them the same as they manage all facets of their business. How much this traffic increase is I don't know, perhaps not much, but it doesn't take much to drop lots of cash to the bottom line and make the effort worthwhile, particularly when it comes at a negative net cost.

                                                                                                                                          1. re: johnb

                                                                                                                                            My son always looked forward to shopping with dad because of the smörgåsbord lunch that I took him too. I didn't even have to buy the hot dog.

                                                                                                                                2. re: johnb

                                                                                                                                  I need to shsre some info as a 'PROFESSIONAL'
                                                                                                                                  For years, there werte two companies that did the demonstrations at COSTCO. Top Priority Sales, who wore RED aprons and handled NON-FOODS. And CDS, Club Demonstration Services, who wears Teal aprons aND HANDLES FOOD ITEMS.
                                                                                                                                  I managed the Top Priority demonstrators in 6 New England Costco locations from 1995 to 2002.

                                                                                                                                  Costco owns a percentage of CDS, but it is a separate company. Manufacturers contract to have their product demonstrated/sampled.
                                                                                                                                  The demo company actually goes through the cash registers and BUYS the product to be sampled. The demonstrators are sales people. If they do not produce, they are replaced. Sales figures and inventory counts are taken at the start and end of the shift and reported.

                                                                                                                                  That $11 per hour demonstratot is costing the manufactured about $35 per hour plus the cost of good. The demonstration company provides, the tables, ovens, paper goods, etc.

                                                                                                                                  The sole purcpose of the demonstrations is to sell more merchandise. Consumers are reluctant to purchase large COSTCO size packages of items they might not have tried.

                                                                                                                                  The demonstrators serve a two bite portion. They are not supposed to make a 'free lunch' available to return table visitors. However they cannot really refuse a sample to any COSTCO adult member.

                                                                                                                                  So, not only does the manufacturer bear the expense, but Costco shares in the profit generated by the demonstration company.

                                                                                                                                  In fact, so important is the sales role of the demonstrator, that they are shopped twice each month by secret shoppers employed by a mystery shopping service. I am not at liberty to name the shopping company.

                                                                                                                                  To sum up this reply to johnb's post. Costco doen't 'give' out the freebies. The manufacturer pays for them (even the packers of Kirkland brand product). If product doesn't move it is dropped from inventory.

                                                                                                                                  Ever see an asterisk on a price sign at COSTCO? This means the product is on its way out. The price may have been reduced, the packaging may be changing or just being dropped.

                                                                                                                                  The $1.50 hot dog deal is a COSTCO loss leader to bring customers into the store. The manufacturers (Hebrew National, Heinz, Coca Cola, etc.) do not subsidize the food court.

                                                                                                                                  1. re: bagelman01

                                                                                                                                    Thank you bagelman. That is excellent information. From what you say, it seems reasonable to conclude that Costco gets many benefits from the process and still makes an immediate profit through the increased sales that the "free" samples engender, as presumably do the manufacturers. I obviously was wrong about the (breathtaking) speed with which the profitability comes in, as well as the fact that even the sales of those products alone is enough to justify giving away the samples. Very smart marketing on everybody's part. But based on what you know, if it works this slick, why is it seemingly mostly limited to Costco and similar stores (Sams Club etc.). Why don't manufacturers do the same thing to the same degree in other stores? Only due to large size packages? Very very interesting.

                                                                                                                                    1. re: johnb

                                                                                                                                      Publix grocery stores frequently have cooking demonstrations with samples. I avoid the cardinal sin of shopping when I'm hungry, so I'm not there for a chowdown. Many are quite good, and they provide recipe cards. When they cooked up Phillips crab cakes that were on sale at a promotional price, I bought all they had in sight.

                                                                                                                                      1. re: Veggo

                                                                                                                                        You are right, and many if not most grocery stores, and other types of stores, have such demos from time to time. But I think Costco and its imitators are in a different league. By that I mean that, unlike the Publixs (Publi??) of the world where you stumble into demos occasionally and unexpectedly, in Costco you know that on certain days they will be doing it in great abundance, and you can count on really stuffing your face if that's what you want to do. It has become part of them in the mind of consumers, and I believe there are shoppers who plan their shopping trips to take advantage. As such, it has become more than an immediate sales gimmick and has entered the realm of image. I can't prove its level of marketing importance, a statistic that is unknowable, but I have to believe it's there and they are very aware of it.

                                                                                                                                        1. re: johnb

                                                                                                                                          Note: Outside of Holiday season, Costco schedules Demonstrations daily from 11-4. There are a minimum of 3 demos. 1 in the rear of the store, 1 mid store and one near the checkouts. Bakery demos are usually only Thurs-Sunday. This Sunday, I was in Costco in Milford, CT at 1Pm and there were 11 food demos taking place. This does not include the 'fudge road show' which was manned by the manufacturer and not CDS personnel.

                                                                                                                                      2. re: johnb

                                                                                                                                        There are often demonstrators with samples in supermarkets here in Connecticut. The manufacturers contract with merchandising companies for the events.
                                                                                                                                        In fact, the Shop-Rite in Milford, CT even built a demo kitchen on the sales floor near deli and produce for this.
                                                                                                                                        This week I saw demonstrators in Stop and Shop and Big Y.

                                                                                                                                3. re: johnb

                                                                                                                                  Well, this is difficult, as I am not a fan of grilled onions. If they are part of the descripiton of the burger, I will ask that they are at least on the side, or are omitted. I do not expect that there will be a rebate of any sort. If my wishes are met, I will chalk this up to good service.

                                                                                                                                  If the burger is good, then I will recommend it to others.

                                                                                                                                  I realize that this does not exactly address your post, but reflects my personal tastes. I do the same for many additions to a burger. If I want fewer of these, but maybe a side of BBQ sauce, I expect to pay for the BBQ sauce, but do not expect a rebate for no tomato, etc. If the burger comes, as I ordered, and I am not charged more, then I am happy, though would also be pleased, should I get charged for the side of BBQ sauce.

                                                                                                                                  Sorry that I cannot fill in all of the blanks.

                                                                                                                                  Hunt

                                                                                                                                4. re: fourunder

                                                                                                                                  I will answer that. I would be pleasantly surprised. Something I wanted, but did not expect to get for free - that I got for free? Sure. But in my experience people, in general, do not say "You need a recommendation for dinner tonight? Oh try George's they give you free onions on a burger!" And as a restaurant owner that would not be what I would want people to think of when they thought of my place. People recommend places because they are high quality and perhaps a good value (overall). That is, luckily, just what good restaurants strive for.

                                                                                                                                  Of course, cynical me answering that question would say "I wonder how much they are overcharging me for the plain ol' burger that allows them to stack on things for free" or "I wonder if the other stuff is free because otherwise nobody would order it"

                                                                                                                          3. This thread came to mind while I grabbed a quick lunch today. We have had a taco truck in the 'hood for a couple months now, on weekends. Good, authentic mexican, and visibly busier by the week. Several times I have had a few tacos al pastor with cilantro, fresh salsa, and diced fresh onion. Today I ordered 3 @$1 each, and the plate came with.....a nice pile of grilled onions!
                                                                                                                            They won a customer for life.

                                                                                                                            2 Replies
                                                                                                                              1. re: alkapal

                                                                                                                                It's an amazing deal, not just the price but the character of the experience. I do chatter away in spanish and I'm also getting more meat in my tacos so maybe I'm getting the "hermano" treatment. They set up a few tables under a yawning live oak, and I bring my 4.7 liter mini-cooler with 3 iced down Tecates, and I give one to the cook. They have tangy homemade red and tomatillo sauces. But those cebollas a la plancha, the grilled onions, are the start of a beautiful friendship.

                                                                                                                            1. Yep, I remember when you had the choice of fresh or grilled onions at no extra charge. Funny you should bring this up, I have stopped going a burger joint that charges for grilled onions in favor of a place that offers them for free. I can see charging for other ingredients but I draw the line at onions. I'll vote with my wallet and go to the place that doesn't charge me extra. That $1 that they are charging actually ends up losing them $7 by my not buying there.

                                                                                                                              4 Replies
                                                                                                                              1. re: free sample addict aka Tracy L

                                                                                                                                If you are their only customer they "lose" $7 but I'm sure there are enough customers to make up for your absence that pay the $1 surcharge to keep the restaurant in business.

                                                                                                                                1. re: KTinNYC

                                                                                                                                  I really don't care if people make up for my loss of business. It is my budget; therefore my vote.

                                                                                                                                  1. re: free sample addict aka Tracy L

                                                                                                                                    You're right. It's your choice whether or not to frequent this restaurant but I just wanted to point out that the restaurant wasn't really losing $7 if they sell $20 worth of grilled onions. I'm sure if they lost enough business due to their new policy they would have to stop charging for the onions or increase prices elsewhere.

                                                                                                                                    You've voted with your wallet, good for you.

                                                                                                                                    1. re: free sample addict aka Tracy L

                                                                                                                                      That is a great point, and one that many should consider. You intent should not be to hurt them, only to vote with your $. Too many feel that they should be accommodated, just because they have a choice. That should factor in to the restauranteur's decisions, but then their (the restauranteur's) choice should be based on the market, and what they need to derive from their endeavors.

                                                                                                                                      Hunt

                                                                                                                                2. this is actually a reply to the original post!

                                                                                                                                  i say, if they tell me in advance grilled onions are a buck extra, that's fine with me. i can choose whether i want them or not, or want to return to the establishment.

                                                                                                                                  mr. alka's answer to this query was much more practical. he said, "i'll pay a dollar for the grilled onions so i don't have to pay for the alka-seltzer later on!"

                                                                                                                                  1 Reply
                                                                                                                                  1. re: alkapal

                                                                                                                                    I must wholeheartedly thank all of you who responded to my OP on this subject matter- I thought it was all rather trivial, and am impressed with the dichotomy of opinion....and the voluminous volume of responses....while the bulk of responses leans towards paying the xtra buck for the grilled onions, I still hold my own..... They give you the lettuce, tomato, and onion as a free garnish in 98.9% of the restaurants where you order a burger...most of which is wilted iceberg, lame in-edible tomato, and the obligatory slice of bermuda onion.....How many of you actually put that wet oversized piece of lettuce on your burger???? How many of you really eat that rock hard tomato sometimes with green stem still visible that has been sitting in a hotel pan on top of some counter for many hours......and when you do put that tomato on your burger, you end up removing it because once you bite into it, the whole slice comes off with your first bite- because you can't chew it, and we have the worst tomatoes in the world ( tomatos, sorry Dan) ....so dear restaurant owners, either improve the lettuce and tomatoes....or stop charging me for my grilled onions.....which cost NOTHING TOO GRILL- ......and get rid of those tiny paper ramekins of Mayonnaise Slaw that is usually well above the temperature danger zone.....

                                                                                                                                    Look...I can even go into a SUBWAY now and they'll bake the darn entire sub and not charge my a dime xtra for the effort......and they even use Red Onions!!!! Ha ha

                                                                                                                                  2. I don't really count grilled onions as a regular topping, it's more like an addition...like cheese so I don't really care.

                                                                                                                                    They probably should have said before hand though.