Where does on the house come from?
We can find on the house as early as the 1880s in the US, used in reference to free first drinks for customers at saloons. Throughout the 20th century, the phrase extended to other businesses providing complimentary food and drink to their customers, from cafes offering a coffee on the house to an ice-cream shop providing an extra scoop on the house.
While the phrased has expanded, it has generally referred to bars, restaurants, and other food-service establishments, which can vend individual items of smaller value. Retailers have also come to use the phrase during promotional offers (e.g., "buy one suit and get a dress shirt on the house" or "spend $500 in carpeting and get an extra $50 on the house").
Who uses on the house?
On the house is colloquially used in speech and writing in a variety of commercial contexts.
A manager may give a customer who is dissatisfied with a product (e.g., a meal they waited a long time for at a restaurant) that same product on the house, a conciliatory measure acknowledging their displeasure and effort to keep their future business. Conversely, a manager may give a regular or extremely generous customer some extra drinks or dessert on the house as a gesture of familiarity or gratitude.
Celebrities and esteemed public servants (e.g., military, law enforcement, firefighters) may also receive items on the house as a show of respect for their clout or service.
As these instances suggest, on the house is transactional, with the establishment taking on the cost (free goods) for the benefits (customer satisfaction) of giving something on the house.
On the house has supplied the title of several works and figures, including the 2012 album On The House by hip-hop group Slaughterhouse and the name of a successful racehorse in 1982. Major online gaming provider Origin also offers a free service it calls On the House.
The President says "Everything is on the house, I guess", and the bartender says "No, that's how I lost the job as fixer for Trump Org."
@blustabensuppe, April, 2018
Happy Monday ❤️ Things are moving and shaking today! / Join us! Where the drinks are strong, the food is good, and the sass is on the house 💃🏼 [...]
@TKBocaRaton, April, 2018
The burgers are all very generous and the Cheeseburger Squared ups the ante with double cheese, double toppings and a full pound of meat, while the really hungry can try the Man vs. Food-worthy Cheeseburger Challenge: finish a burger with three patties, Swiss and Coby, Thousand Island and mayo, sautéed onions and mushrooms, bacon, fried egg, kalua pork, jalapeños, lettuce, tomato, pickles and an onion ring, surrounded by a large mound of cheese fries, all in under 20 minutes, and it’s on the house (otherwise $35).
Larry Olmsted, USA Today, March, 2018