Cover charge

Club bouncers are sometimes responsible for collecting a cover charge.

At bars and nightclubs, or restaurants with live entertainment a flat fee for entry, sometimes known as a cover charge^{[citation needed]}, is made, in addition to payment for food and drink. Some restaurants without entertainment have a cover charge or ("couvert"), which would include bread, butter, olives, and other accompaniments, in many countries.

Business models

Cover charges

Bars and clubs that use cover charges use them for several reasons. In some cases, popular bars and clubs have a substantial excess demand; patrons are lined up outside the club waiting to get in. In this case, the club can gain additional revenue from customers by requiring an entrance charge. Other bars and clubs use cover charges only on nights when there is live entertainment or a DJ, to increase their revenue.

Cover charges are usually much lower for local, semi-professional bands or entertainers than for better-known touring bands from other regions. In North America, the cover charge for a performance by a local teenage band may be as low as a few dollars; a show by a nationally-known band with a recording contract may have a $10 to $15 cover. Some expensive jazz clubs and comedy clubs have both a cover charge and a minimum drink requirement.

Price discrimination

In economics, the term "price discrimination" refers to charging different prices to different customers, based on the anticipated elasticity of demand of different customers. Bars often offer student discounts because university or college students will have a different willingness to pay than an average consumer, due to their budget constraints. Thus, the bar sets a lower price for entry for university and college students because students have elasticity of demand.

In some bars there are different cover charges for legal drinking-age customers and for minors who may not purchase or drink alcohol (e.g., a $5 cover charge for those over 21 and over $8 cover for minors). Some bars have lower cover charges for some categories, such as college or university students with student identification; some have lower cover charges for members of the club or of nightclub organizations or associations. Cover charge is waived at some clubs for early arrivals (before 11 p.m. or midnight), for people who order food, or, if the club is in a hotel, for hotel guests.

Revenue-sharing with performers

The bar usually allows the band or performers to provide a list of guests who will be admitted without paying the cover charge ("the guest list"). The bouncer may waive the cover charge for some customers, such as regular customers who usually purchase a large number of drinks. As well, bouncers sometimes waive the cover charge for their friends, in what could be described as nepotism.

Bars and clubs have different policies for how the cover charge is shared, if at all, with the performers. Different revenue-sharing agreements are often negotiated by different performers. The range of revenue-sharing arrangements range from the band or performers retaining all of the money collected for the cover charge, to a split between the bar and the band, to arrangements where the bar retains all of the cover charge. A variant of these revenue-sharing arrangements occurs in cases where the bar also gives the band a share of the bar's alcohol sales receipts. Some bars may also agree to a guarantee, in which the bar promises to pay the band a certain amount even if this is less than the amount collected at the door.

Luxury cover charges

Luxury clubs with unusual architecture and interior design and a unique atmosphere sometimes have cover charges even when there is no live entertainment or DJ. In these cases, the cover charge simply contributes to the club's profits. For example, Mike Viscuso’s On Broadway, a glam-disco dining palace, has a cover charge of $15. James Brennan’s Stingaree, a glam restaurant and club/lounge, has a cover charge of $20.^[1]

Some high-end and luxury bars and nightclubs have yearly membership fees which can be interpreted as annual cover charges. For example, Frederick's has a $1,200 a year membership, the Keating Lounge has a $2,500 annual membership fee, and The Core Club has a $60,000 membership fee. A variant of these annual fees are "table charges" at some elite nightclubs, in which a customer agrees to spend a minimum amount in order to reserve a table in the club (e.g., $1000 in the evening).

No cover charge

Some bars and clubs do not charge an entrance fee, which is indicated in signs stating "no cover" or "no cover charge". These bars use the live entertainers to draw and retain customers in the establishment, so that the customers will buy drinks. To attract more female customers, bars often have a “no cover for women” policy, sometimes on a ladies' night. In some cases these policies have been challenged in lawsuits as discriminatory, and are illegal in some jurisdictions in the United States. Some comedy clubs and strip bars may allow patrons to enter without paying a fee, with the implicit or explicit expectation that the customers will buy alcoholic beverages while inside. Some bars with "no cover charge" policies may have higher prices for their snacks and beer to make up for the lack of a cover charge. Many nightclubs oriented towards electronic dance music have a cover charge, in some cases because many of their patrons are not drinking alcohol due to use of other drugs such as MDMA. Bottles of water are also often priced at up to $10 to offset the loss of revenue from reduced sales of alcohol.

Legal restrictions

According to Massachusetts law, subject to a penalty of up to $50, no cafe, restaurant, or bar can require payment of a minimum or cover charge unless a sign is conspicuously posted with at least one-inch-high letters, stating that a minimum charge or cover charge shall be charged and indicating the amount. Children under thirteen may not be charged. ^[2] This law was put in place to resolve the problem of “secret” cover charges, which are indicated only in tiny text on the menu. Clubgoers would then find this cover charge added to their first drink order. In Illinois, bars cannot impose a cover charge unless the fee goes towards the cost of off-setting entertainment costs such as a live band. In 1995, the Italian regional government in Lazio (which includes Rome) began requiring restaurants in the region to remove the cover charge for "Pane e coperto" (bread and cover) from their bills. In 1998, the European Union ruled that the regional law was invalid, but the region is continuing to try to abolish the practice^[3]

Origin as restaurant cover charge, and etymology

The Oxford English Dictionary defines a "cover charge" as a "charge for service included in differentials also listed as acknowledged part-restaurants"^[4]. Such a charge is made in many countries, usually described by the word equivalent to "cover" (couvert^[5], coperto^[6], cubierto^[7], etc.). A place-setting at a restaurant, in English and in other languages, is often referred to as "a cover"^[8][9] or equivalent term in other languages. A term sometimes used in the US is "table charge". The charge is typically a few US dollars or equivalent^[10]. Although the charge is often said to be for bread, olives, etc. taken to the table, it is payable whether or not they are eaten.

Restaurants in English-speaking countries sometimes have a menu in French; in these and other restaurants the cover charge is sometimes described with the French word "couvert". This term and the related charge, originating in France, has been used with this meaning in English since at least 1899^[5]. The French word both means table setting and is the past participle of couvrir, "to cover"^[11]; couvert or "cover" in the sense of place-setting derived from the French past participle according to the OED: "Cover (7): After French couvert, (1) ‘the covering or furniture of a Table for the meale of a prince’ (Cotgrave), the cloth, plates, knives, forks, etc. with which a table is covered or laid; (2) the portion of these appropriated to each guest".

The couvert or cover charge has been levied for many years, certainly in English-speaking countries by 1899^[5]. The concept, and term, was later used in the US in the 1920s by illegal bars called speakeasies, during the Prohibition-era ban on alcohol. Manhattan saloonkeeper Tex Guinan, was an early example of a bar requiring a cover charge from patrons^{[citation needed]}. In the US the cover charge later became an entry charge where both entertainment and food and drink are provided, and carries the expectation of entertainment.

In most countries where restaurant cover charges are made the practice is far from universal; many restaurants make no charge. Tourist destinations may be more likely to make this charge, which unwary visitors may not anticipate. Tips are usually much lower internationally than the 15-20% typical in restaurants in the USA without cover charge; the total outlay for the meal including tip is not necessarily higher.

The term "cover charge" is used in other cases, and can be confusing. A practice, sometimes called a cover charge in the USA is to make a flat charge for unlimited food. Restaurants may make a charge to diners who book but fail to show up; this is occasionally called a cover charge^[12].

References

1. ^ http://72.14.205.104/search?q=cache:tGU40B_DvC0J:www.signonsandiego.com/uniontrib/20051215/news_1w15night1.html+cover+charge&hl=en&ct=clnk&cd=88
2. ^ ADMINISTRATION OF THE GOVERNMENT TITLE XX. PUBLIC SAFETY AND GOOD ORDER CHAPTER 140. LICENSES THEATRICAL EXHIBITIONS, PUBLIC AMUSEMENTS, ETC. Chapter 140: Section 183D. Minimum or cover charge Section 183D. No innholder, common victualler or person owning, managing or controlling a cafe, restaurant, or other eating or drinking establishment shall require any person to pay a minimum charge or cover charge unless a sign is conspicuously posted at every entrance to any dining room or rooms where such charge is required, in letters no less than one inch in height, stating that a minimum charge or cover charge shall be charged and also stating the amount of charge; provided, however, that no such innholder, common victualler or person owning, managing or controlling a cafe, restaurant or other eating or drinking establishment shall require a person under thirteen years of age to pay a minimum charge or cover charge. Whoever violates this section shall be punished by a fine of not more than fifty dollars. http://72.14.205.104/search?q=cache:tyusONW-pcEJ:www.mass.gov/legis/laws/mgl/140-183d.htm+cover+charge&hl=en&ct=clnk&cd=65
3. ^ 19/07/2006 - No more "Pane e coperto"? http://72.14.205.104/search?q=cache:Vf4NmLzby44J:www.inforoma.it/news.php+cover+charge&hl=en&ct=clnk&cd=112
4. ^ OED[1] entry for "cover charge"
5. ^ ^{a b c} N. Newnham-Davis, Dinners & Diners, 1899. ch. 1, collected from an earlier article in the Pall Mall Gazette "And the bill ... three couverts, 3s.; caviar, 3s., ..."
6. ^ Example of use of coperto in Italian
7. ^ From Concise Oxford Spanish dictionary: cubierto (2) (in restaurant) - cover charge
8. ^ OED[2], meaning 7 of "cover": "The utensils laid for each person's use at table; the plate, napkin, knife, fork, spoon, etc."
9. ^ N. Newnham-Davis, Dinners & Diners, 1899. ch. 1, collected from an earlier article in the Pall Mall Gazette "This is the menu for a dinner of six covers, a very admirable dinner"
10. ^ Restaurants included in the toptable.com website, mainly in the UK, which levy a cover charge charge between one and ten pounds sterling, about US$1.50 to $15
11. ^ "Couvert" in Larousse French dictionary
12. ^ Example of restaurant which calls its no-show charge a "cover charge"