Just Thinking
Apr 12th, 2007 by Don Ray
It appears that a new restaurant is already planning on closing. What the actual reasons for closing are, I am not sure. However the thing that may have forced the issue revolves around the Jubilado discount and including a tip on a table of 6 or more customers on the bill. Maybe this is worth discussing some. Maybe not, but it is on my mind and I need to get it off so I can go have some fun.
I am just going to through out my thoughts. They are my thoughts and maybe not worth a lot. I knew when this restaurant was planning on opening that it was not planning on giving a discount. I had a copy of the law sent to a friend in the area and asked him to see that the owner had it, because I knew that there would be some people that would make an issue of it if they could not get their discount. I have to admit that any restaurant that is owned by a non-Panamanian will be held and probably should be held to a higher standard of complying with Panama law than all Panamanian restaurants. If I were going to run a restaurant, I would make my business model include the discount.
In this case, I think it would have been easy to run a business model, assuming a certain percentage of people would be eligible for a discount and some percentage would not. If you serve liquor it never gets a discount and many times that can offset the meals discount. If 50% of the clients are going to deserve a discount, then a 12.5% increase will bring you back to your planned profit. I don’t know if a business model was done or not, but you cannot intend on being in the restaurant business in Panama forever and not plan on following the law.
Putting a tip on a table of 6 or more people is not all that uncommon. I have no problem with that, if it is clearly stated on the menu when I sit down. If it comes after the fact, I would be upset. In Panama, the normal tip that I have seen is 10%. More than that will probably also cause a problem.
That pretty well covers the business owner. My feeling is if you are going to do business, you need to plan on abiding with the law. If in the long term you think you can’t make ends meet and follow the law, then don’t open.
Now from the customer’s view, I think there are other things to consider. I don’t believe that it is a law that you should always ask for a discount, even if you are legally entitled to it. You are not going to have your pensionado card revoked for not asking for all available discounts. There are a lot of restaurants I go to and never ask for a discount. If I go to a big American chain such as TGI Fridays or Dominoes or some other American franchise, I always ask. I know they know the law and I know they have made their prices in accordance. They make enough profit and I don’t need to make them any richer. I am not saying not to ask for the discount. If Panamanian’s ask for a discount at the restaurant, then you don’t need to do any different. If a Panamanian isn’t going to ask for a discount, then, I am not either.
I will add that I have seen many hotels, doctors, and others, that should give discounts, give other than what I thought the law stated. I have never thought it was worth the effort to find out their reason. Maybe the law isn’t perfectly written and some have ways to justify their practice. I just know I am not going to let it keep me from enjoying each day I am fortunate enough to be here.
And there you go Don! Some of my thoughts exactly. My other thoughts were…What was the original intention behind this Jubilado discount law? I don’t think it was written to lure ex-pats to Panama. No, I think, but am not sure, it was intended to give Panamanian Jubilados (who receive very, very ,very little) a break. And as you said, just because you are entitled to it, doesn’t mean you should ask for it in all circumstances. The Plaza Patilla hotel gives the Jubilado discount off of their “rack rate” of $100. However, they used to run a “special rate” for $49. You get the idea.
When I was a young single mother of 2, I qualified for food stamps and other government benefits. I never took advantage of those programs because I was getting by on my own, not easily, but doing ok. And I wasn’t raised that way. It was meant for people who truly couldn’t afford to feed their family, and needed help to get by.
In the same vein, by husband refuses to stand in the Jubilado line at the bank, because he is capable of waiting in the long line like everyone else. He uses his Jubilado discount for his medications and for airplane flights, usually nothing else. And we both feel very blessed to live in Panama, and to enjoy the already lower cost of living.
Vicki
This whole situation is weird. I agree that the business model should have included the Jubilado discount. Your suggestion is just one of many approaches that could be used to deal with the discount. From a business prospective, it just shouldn’t be that big of a deal. Nonetheless, we’ll see how this unfolds…
Hi Vicki, thanks for taking the time to leave a comment. I have to admit, I use the jubilado lines in the banks and the utility offices to pay bills. I do consider it a benefit and it doesn’t cost anyone anything. I am old enough that I qualify. On meals, I pick and choose when to use it.
Rob - Thanks for stopping in. As you say, we will see how it unfolds.
Dear Don et al,
Every expat-luring article that one reads that includes visa programme benefits in Panama mentions discounts on goods/service business rates with the Pensionado Programme. Period. End of story. Why is there this dual level of benefit/no benefit depending on where one hails from? The law states that all restaurants MUST post menu prices and a Jubilado is entitled to a discount commensurate with discount rates legislated. I agree with you and personally know Jubilados here on retirement visas who DO NOT even consider asking for their discounts in a Panamanian restaurant/mercado where prices are rock bottom as it is! We are not ‘class-less’ here. Some people have limited budgets and limited assets that may have to last them *decades*. You watch the dollar (diving now) & inflation. Look at the soaring EURO. All is not well in never never land. Who is planning for the coming debacle or has even thought about it? *Take action now US ex-pats*. Thank me later, be careful with your assets. Conserve!
On the other hand, how many stories have we all heard concerning the ‘aggressive’ pricing tactics of business people here, Panamanian or otherwise, who offer goods & services at ’special gringo adjusted prices’? Quite a few. You get around, Don & you know that there is a dual system of pricing here in many cases. So I say, if someone offers you a cookie, you take it. Period. Prices are ALWAYS set based on *value* not on what a certain business owners’ monthly nut is or implied discount ‘losses’ which are recouped with tax credits anyway, ONLY IF the business owner is running a legit, licensed business. Is the person in question doing so? Ask him.
I am sorry and truly feel for the Panamanian families who work very hard to eek out a living. It is what it is. We help out where I can. We all do. We spend tons of money here. We hire people. We buy food, clothing, shelter, gas, electric, bus rides, taxi rides, internet, laundry, diesel, autos/trucks, mechanical services, construction materials.. my fingers are tired..
I was at the restaurant in question. We paid the tip. The owner shot himself in the foot. He turned away ALOT of business for a lousy few bucks. The food was priced at “TGI Friday & Dominoes” price levels for what you received on the plate. Plus beers are $1 for local stuff. There were many drinkers there on the nite in question.
!!Business owners!!, POST your rates/prices clearly. POST clearly your level of participation in *legislated* programmes. I am sorry this particular individual failed. Communication & honesty are the keys to success here.. along with *value* and treating people (all people!) in a decent fashion …
Out,
kk
Hi KK. There is no option to give or not give according to the law. If ones says I can’t price it higher and have business, then that is a business decision.
If one says, I won’t give a discount, then you have stepped over the line and are truly in violation of the law. I have no sympathy for a person with that attitude.
I agree that people will go for a quality meal independent of the price (within reason).
Don,
I agree with what you say wholeheartedly, and I will use my card when we get it the same way you do. KK, not to start a war, and I see your point with the *Take action now US ex-pats*. comment, but think of us from up in Canada as well, as we have to add another 18-20% to our money in exchange to pay the US equivalent. I think a lot of the people that are retiring to Panama are doing so because of the country itself, and because it is cheaper to live. I know we will have to watch our pennies when finally retired there.
Another thing you mentioned Don was the 10%…That one really burns me. We only had 3 restaurants in our 3 weeks in Panama that didn’t have a built in 10% charge…When I see that, the tip is minimal at best…To me it is a ripoff, and I doubt the staff are getting the money, but I refuse to tip the same amount when I have to add the 10% first..
Hi Doug - Thanks for taking the time to leave a comment. I do not like it when a restaurant automatically includes the tip. I understand their doing it if it is a large party. However if it is a small party (2 - 4 persons) and they include a tip, then I put them on my “don’t return here” list. If they do include a tip, I wouldn’t think about giving them anything extra. I always tip 10% in Panama and much of the time more if the service was good and the waiters were pleasant.
There is a good Peruvian restaurant in Boquete that includes the tip and because I know they do, I refuse to go there. There are plenty of restaurants that don’t and these restaurants may need the business more anyway.
Hi Don,
You are right. When the 10% tip is included, you don’t have to give anything extra. In general, the already included tip goes to the staff.
Hi Ari. Thanks for stopping in. I won’t make it to the Orchid festival. I am going to your home city for a week. I will leave tomorrow and if all goes well, will return in about a week.
Dear Don,
I meant no offense, and don’t pass judgment on anyone for using their Jubilado discount. And I certainly don’t condone someone blatantly disregarding the laws. I guess I could have been clearer in my points. One: I don’t think the law was created for the purpose of luring ex-pats, although it certainly should apply one and all. And the other point I failed to make is that there is nothing more hideous and shameful than seeing a haughty gringo making a scene somewhere because they didn’t get their $1, or $3 off a purchase, even if they are being swindled. You take your receipt, get the info and file a complaint.
I’m sorry if you took offense, I certainly didn’t mean any. And again, I truly enjoy the site, and check in often for good info and news.
Vicki
Don great points made. I do think that if a tipis added for a large party it should be stated on the menu. Speaking from the other side of the table since I helped managed a restuarant for my friend in the states, there is nothing more frustrating to a hard working waitress who works her tail off serving a large party and be left an inadequate tip! I often seems that those who are most demanding are the misers. We often served a large number of seniors and being one I appreciate that they were on a tight budget. I didn’t mind if they were nice and expressed thanks, but oh those sour pusses who ran you ragged and then didn’t leave a tip! You just hoped they would never come back.
I agree that Mike should have realized he needed to raise is prices to include the discount, but I also know that he has had a lot of things go wrong and incurred a lot of unexpected expenses and met with much frustration. I think this incident just kind of pushed him over the edge. Most of us hope he will reconsider and just alter menu pricing to cover the discount. His prices were extremely reasonable execially when one consideres the quality of the food.
Hi Vicki - I never take offense. I tried to see what I wrote to give you that impression. It is too easy for written words to be misunderstood, so I try to think anything that is written is not personal and not necessarily directed to me. I am probably one of the worst offenders of not writing clearly. I agree with all you wrote. I would add that there is nothing worth than a gringo restaurant owner in a foreign land getting into an argument with a customer as well. It always take two to have a dispute. Someone has to decide to be civil.
Nancy - Thanks for taking the time to comment. I hope Mike takes a break and gives it more thought. I can understand having problems in a business startup. I personally support giving him time to know what the proper prices should be. However, if he is taking a hard line and saying “I won’t comply with the law”, then he might as well pack it in. That attitude won’t get any support from me. I am reasonably easy to forgive, but the one thing I can’t abide is people who go to another country to run a business and don’t want to comply with the laws.
I have no tolerance for guests of Panama not complying with the law or being offensive to its citizens.
I don’t understand what all the outrage is about over 10% being automatically added for a tip in a restaurant. When we lived in Costa Rica all restaurants added 10% automatically. As we always leave at least 15% we make up the difference out of pocket. I have heard all the arguments about overtipping and quite frankly, I find them lame. A waiter or waitress in Panama works just as hard as one in the US or Canada, where the tipping is now at 20%. Maybe the restaurant adds 10% to make sure the waiter or waitress actually gets a tip. I have seen how some gringos tip and quite frankly it’s embarrassing.
Hi Kathy. Actually the complaint was for 15%. 10% is normal for Panama and I think it is appropriate to leave what a Panamanian would leave. Leaving more is sometimes frowned upon because it is above standard. I try to do as the Panamanians would do. However if the food is very good and the service is above the standard, then I will also tip above standard.
I also have no problem if the menu clearly states the policy. Normally this would be done for tables of 6 or more.
Hi Don Ray
I’m going to have to respectfully disagree with you.
I don’t believe if I tip a little bit more it will change the scheme of things in Panama. But I have the ability to put a couple of extra dollars in the pocket of someone who is working very hard to make ends meet. And that for me has to be the bottom line.
I am not sure there is a disagreement. I said if the food is very good and or the service justifies it, I also leave more than the normal 10%. However, if a gringo is accustomed to leaving 15% or 20% as a norm in the US, doing the same here is not necessarily a good thing. It is better to find out and understand what the locals do and why.
Also if the tip is included in the bill you have no assurance that it will ever find its way into the pockets of those that waited on you.
Don Ray, it is always enjoyable talking with you. Have a great, relaxing trip to PC.
Kathy
Thanks Kathy. I am having a very relaxing time.