I always report what happens and try to remain as impartial as is humanly possible. Having never managed in the restaurant biz, I just wondered if this was something that was a serious no-no for the server or if it is more of a look the other way by most managers... I have no crystal ball either to know if the server did this intentionally with the hopes of a larger tip or simply made a mistake in entering the order on the computer. If I had to guess, I would lean towards the former, but mistakes can and do happen.
I get that it can be considered theft of product, but playing devil's advocate here, so is charging $4.95 for a soda that costs the restaurant pennies in product...lol! That would be considered an excessive profit margin in many industries. 10 to 20% profit margins are fairly normal. The profit margins on soda's are in the 1000% range probably.
Freebies are prevalent in many industries. How many people have 'negotiated' for free car mats when buying a new car? I'm sure if I thought about it long enough, I could come up with many examples of add-ons or outright freebies.
As I said before, I get paid to report what happens with impartiality and objectivity and pride myself on doing just that.
"We're just two lost souls swimming in a fish bowl -- year after year..."