The Restaurant Industry’s Ability to Make You Spend More Money

by A Guest Writer · 5 comments

in Guest Posts


A little known secret of the restaurant industry is its easy ability to cause its patrons to spend more money than they would have otherwise. This does not come from the lure or temptation of food, but rather from the layout of the restaurant’s menu. By not placing dollar signs next to the prices on the menu, the restaurant sends signals to the customer that the prices are not actually money, which thereby causes the person to spend more than they would have liked. In a downward economy, this type of ploy makes all the difference in the restaurant business.

This study by the Cornell University School of Hospitality Research tested different visitors to St. Andrew’s restaurant in Hyde Park, New York with menus that had the price listed as dollar increments, simple numbers, and numbers that are written out ($20, 20, or twenty). The customers would spend more when the amount was written out in words, although it was determined that this was due to the lack of a currency sign next to the number. This survey has been well determined within the restaurant industries, with more and more businesses advertising their food without any sign of currency on their menu. Customers were found to spend 8 percent more without a dollar sign through this study, though it was surprising that the spelled-out format did not yield higher spending.

According to many leaders of the study, people who are more price conscious tend to add up prices in their head when going to a restaurant, but do not do this when the price is written out, or when there is no dollar sign next to it. The dollar sign inevitably comes to remind people that they are spending money, and the lack of the sign takes away this emphasis on money. Restaurants have thereby discovered that customers are more relaxed when they are not adding up the bill in their head throughout the meal, and tend to spend a bit more money as a result.

As a frugal customer, you need to be aware of this marketing ploy that many restaurants present to their customers and not fall into it. Be aware that the price is not less than you think it is, but simply looks to be less because of the lack of a currency sign. Once you add the prices up in your head regardless, you need to realize that you are still spending the same amount of money, and the price is not diminished. In this type of economy, the restaurant industry has thrived over menu upgrades such as this, although many customers are slowly learning this secret and are maneuvering ways around their psychological approach to eating.

What are your tips for being frugal at restaurants? Do you try to save as much money as possible? Or do you allow yourself to splurge on nice occasions? How often do you eat out?

This post was contributed by Tara Miller, who writes about the online teaching degree. She welcomes your feedback at TaraMillerr00 at


1 Amber July 8, 2009

I’ll certainly recognize that it’s a good thing to be aware of marketing tactics being used on you. However, I’ve found that it’s very helpful for me to *stop* adding up the bill at a restaurant. Before I had my spending under control, I would inevitably order the cheapest item on the menu and scowl if my companion ordered something expensive. This was to the point of ridiculousness. When my friend took me out for a fancy dinner for my birthday one year (he was paying) he had the restaurant leave off the prices on the menu entirely so that I wouldn’t be swayed by expense and would order what I “really wanted.” I chose the hamburger, of course the cheapest item on the menu.

Now when I go out to eat, I think of restaurant dining as a mini-vacation. The money is *completely* discretionary and I’ve budgeted for it. If I got to fancy dinner, I don’t want to get the chicken to save $3. I’d rather get the chilean sea bass, spend more money and enjoy it more. I know that relaxing my penny-pinching ways around the restaurant dinner table has improved my dining experiences.

My point being, I think there’s a fair chance that even though people are paying 8% more on their tabs when they aren’t thinking about the money, they’re enjoying their meal 8% more. As long as they’re not going over their restaurant dining budget, maybe it’s a good thing.

And as a side note, I think it’s far more offensive that prices are never listed for cocktails. Is my chocolate martini $8 or $10? Nevermind, I’ll go without.
.-= Amber´s last blog ..Spotlight =-.

2 dixie July 8, 2009

Whoa, I never realized that before. I think I’m going to pay more attention to that little detail in menus from now on.

One thing I always do is only order water because it’s free. Soda and tea prices seem to get higher and higher these days. If my boyfriend orders a soda I’ll just take a few sips off his and that satisfies my sweet tooth.
.-= dixie´s last blog ..New/old car =-.

3 July 9, 2009

Very interesting research.

I also read somewhere that restaurants also stop listing prices in a straight column, but instead list the price right after the dish description. This apparently cuts down on the number of people who search up and down the price column looking for the cheapest item.
.-=´s last blog ..Supermarket Speed Bumps That Get You to Spend More =-.

4 Neil July 9, 2009


It’s interesting that such a small detail would make any difference at all.

My tips for saving money are to get a jug of water once the kids have had 1 drink each (cheaper and better for us) and be aware when the restaurant is trying to make up for cheap headline prices on meals by pushing up the price of extras.

None of the above applies to special occasions, as the commentator above said just relax and enjoy them!
.-= Neil´s last blog ..The Elusion of Financial Freedom That Debt Can Bring =-.

5 Mary R July 17, 2009

I have two strategies for eating in restaurants depending on the situation.

1) If I’m going to enjoy company with friends, but not necessarily the food (because let’s face it, a lot of restaurants are just marginal), I’ll eat something small at home first and then order something cheap at the restaurant, so I can still be a part of the eating…

2) If I’m going to enjoy the food and the restaurant, I’ll focus on value rather than price. This means, I’ll order an entree which might be more costly, but the portion will be bigger and it will be a better overall value than appetizers or salads in terms of what you actually get for the money…
.-= Mary R´s last blog ..Okinawan Baby Shower Lost in Translation =-.

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