A new survey shows 21 million people who foot the bill, expecting to be reimbursed, don’t get all of their money back.
“The Rules” is a Moneyish series where we define the rules around sticky money or workplace topics like giving an allowance, who pays on a date, combining finances with your partner, and more.
Picking up the tab can cost you some friends.
That’s what Manhattan business consultant Gina Lepore learned the hard way a couple of years ago, when she laid out $900 for four Elton John tickets for her group. The other three dragged their heels in reimbursing her for their seats for too long, so she gave their tix away and chalked the expensive experience up to a life lesson.
“These acquaintances — I no longer consider them friends — were all, ‘We’re totally in!’ at first, but then I had to chase them, and it was just not worth my energy,” Lepore, 54, told Moneyish. “I donated two tickets to a charity auction for girls’ education, and I invited another really good friend along to join me.”
She added that now she now confirms what everyone is comfortable paying, and sets a deadline for how soon they should repay her, before she picks up the bill. “You figure out really quickly who you can trust, and who you can’t,” she said.
Lepore is not the first to get stuck with a group tab. While 47 million Americans (1 in 5) have covered a group expense to earn extra points, miles or cash-back rewards on their credit cards, CreditCards.com reported Thursday, almost half (21 million) didn’t get their money back from the folks who were supposed to kick in their share.
The survey found that 44% of people who have fronted a group bill said they were not paid back at least once. And Gen Xers (born between 1965 and 1980) were most likely to get saddled with the entire expense in the end (54%), even though peer-to-peer payment services like PayPal, Venmo and Zelle make kicking in your share of the cost easier than ever.
“Picking up a group expense can really help to rack up those credit card rewards. But, buyers beware: be sure you trust the folks you’re with to pay you back promptly. Otherwise, you could be stuck with footing the entire bill,” warned Matt Schulz, senior industry analyst at CreditCards.com.
But as Lepore noted, “There’s so much awkwardness about money that it’s hard to ask for it back.” So Moneyish spoke with Shasta Nelson, author of “Frientimacy: How to Deepen Friendships for Lifelong Health,” for tips on exactly how to ask people to pay you back.
If you’re picking up the tab at a restaurant: Nelson recommends checking that everyone has a payment app that they’re comfortable using, and that you articulate exactly when you want to be paid back. “An example: ‘I’m happy to put this on my credit card if that makes it easier on everyone? Are you all willing to Venmo me before we leave, so we don’t have to worry about it afterward?’” she suggested. “And then ask an easy follow-up before leaving with each person: ‘Were you able to find me on Venmo?’”
You want to be clear and direct about what everyone owes, how you want to get that money back, and when they should reimburse you. If you leave it up to a vague “pay me back whenever,” even the most responsible friend can forget about it. So if not everyone is on board with a cash-sharing app like Venmo or PayPal, offer to walk with someone to an ATM to get the cash on your way to the subway, or ask them to cut you a check by the end of the week.
If you’re buying something larger (i.e. tickets, a hotel room): Make sure everyone involved agrees on the price range. Otherwise, you could spend hundreds on front row seats, when some members of your crew can only afford nosebleeds. Nelson recommends sending each person an email or text with: “I’m so excited you’re willing to come to this concert with me! I’m going to try to reserve tickets today, and while I’m not sure what’s available I want to make sure I pick something within our budgets! What’s your preferred price range?”
And once you snag the seats, you again want to be very clear about how and when they should pay you back. “It’s always best to have people pay you as quickly as possible to when you made the purchase, and not wait for the event, so follow up with a, ‘Yay! I bought our tickets and the final price is $X. Can you Venmo me that amount at your earliest convenience so we don’t have to worry about it later? (Plus my credit card will thank you!) Looking forward to the time together!’” suggested Nelson.
Don’t be afraid to follow up with stragglers. If someone still hasn’t paid you back for those drinks or those tickets, Nelson recommends reaching out to them the next day or a few days later in whatever way you communicated to make plans in the first place (text, email, chat or phone call) and say, “It was so much fun spending last night/last week with you. Thank you for making the time. (And if you’re able to Venmo me $X today, then we can both cross that off our to-do list!) And I can’t wait to see you next month!”
“If some time has passed, don’t feel embarrassed at all about following up,” she added. “All you did was a favor — you have nothing to feel bad about! Hopefully a simple text like, ‘Hey, I was just reconciling my bank statements and noticed that we never got squared away from dinner last month. I wish I could bankroll all our times together— I would if I could!— but until then, any chance you can Venmo $X sometime today? Can’t wait to see you again!’”
And before you pick up the group tab, keep these factors in mind.
Are the points you’re earning worth the risk? If your card gives 1.5% cash back, a $300 dinner is going to earn you $4.50. Is that worth potentially getting stuck with all or part of the bill? “You need to understand your own risk tolerance,” said Schulz. “For some, those extra miles and points are absolutely worth the risk of not getting paid back. For others, that’s not the case.”
Can you trust these people? It might look good to grab the check initially at a work dinner or when meeting new people, but you have no idea how responsible they are. And you should be just as discerning with the people you know. “We all have friends and relatives who are less reliable than others,” added Schulz. “If you find yourself out with a large group of those folks, picking up the tab may not be worth the risk.” Let someone else do it — and pay them back promptly.
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