Why you overspend in restaurants

Saturday, 7 May 2016 | MYT 9:58 PM

Why you overspend in restaurants

by mark reijman

THERE are many different ways in which restaurant owners influence the total amount on your bill and leave you many ringgit poorer than you had expected when you came in.

Restaurants are a great laboratory: you have customers in a controlled environment in which they are forced to make a number of choices, and each will cost them more or less money. 

To balance the scales, here, I will reveal how! 

The first method is the common practice in Malaysia to exclude the 10% service charge and 6% GST from the listed prices and mention this in a footnote at the bottom of the menu. 




Of course, we can calculate a 16% increase to all the prices. 

But the human mind is lazy and we typically don’t – and just compare the listed prices instead. 

The final costs are only revealed when the bill comes, too late to do anything about it!

In order to focus on the food and not make the menu a price comparison, some restaurants will write out the prices, instead of using numbers. This looks very expensive and it is! 

Reading words is a much harder cognitive task than comparing numbers. It reduces the focus on money and makes comparing prices much harder, gently seducing us to focus on the food, not the price. 

At the very least, the ‘RM’ will be removed from the menu. This also reduces our association with money.

If you are in a premium restaurant (or one that wants to be considered as such), you will notice round numbers in the prices. 

If you eat in a restaurant, which offers great value, you will see many X.95 prices. 

You will not see many X.99, as this is considered to be cheap and of low quality by many people. 

For example in Malaysia, one fastfood chain often uses X.15, X.65 and X.95, while another uses round numbers.

To portray high quality, the menu will have extensive descriptions of each dish, explaining the ingredients, flavours and cooking techniques in great detail. 

Academic research has found a significant correlation between the length of the description and the price of a course. 

Longer descriptions will leave customers more satisfied and makes it easier for them to part with their money. 

Mentioning branded ingredients (a cocktail with Veuve-Clicquot champagne, hamburger with Heinz ketchup, steak from Wagyu beef) also helps to explain the price of an item to you.

If you go for the authentic atmosphere, expect that any connection with family will raise the price, for example "Grandma’s Apple Pie". 

This is because it creates an association with artisan, homemade products, with high quality ingredients, instead of industrial scale production. 

Authenticity can be further enhanced by having a hand written menu on a chalkboard, instead of printed menu’s. 

Using ethnic food terms also helps to establish the aura of authentic ingredients flown from all around the world.

For example, "mozzarella di buffalo", "Spanish prosciutto di Parma", "Hokkaido scallops", "Norwegian Salmon".

Courses that the restaurant really wants to sell can be printed in italics or bold, it could be separately boxed or accompanied by a picture, the "chef’s recommendation" or highlighted by your waiter. This will make the courses stand out and look special. 

Even if the only special thing about it is its typeface, you cannot help but notice. 

Dimmed lights and classic music also help to conjure up an association with luxury, making you to expect higher prices and increasing the chance you will order wine.

As mentioned in an earlier column, expect to be anchored with an extremely expensive item on the menu, in order to make everything else on the menu look affordable. 

Even if no one ever orders the item, it will still increase revenue by seducing people to order something that is expensive and they normally would not have ordered, but which seems reasonable in comparison to the expensive item.

I have been in restaurants where I received a drinks menu, wine menu, dinner menu, deal menu, chef’s specials menu and a dessert menu. 

It is easy to be overcome by choice overload. In order to eliminate it, restaurants sometimes offer the surprise menu, offer a dessert that consists of small bites of many different desserts or tapas, which allows you to choose many different small plates. All of which are meant to lighten the burden of choice (and your wallet). 

In the same vein, a single price for all desserts allows people to choose what they like best and draws attention away from the price, increasing the chance you will actually order dessert. 

It will also make some desserts look like a very good deal, as your favourite dessert will have the same price as the standard sorbet.

Although not all of these methods can be used simultaneously, many can work in conjunction with each other. 

How many of these methods will you notice the next time you visit a restaurant?

Mark Reijman is co-founder and managing director of [You must be registered and logged in to see this link.] dedicated to increasing financial literacy and to help you save time and money by comparing all credit cards, loans and broadband plans in Malaysia