Food and Drink Restaurant bans tipping. Guess what happened? - Page 13

Fish · 08-15-2013, 02:57 PM

After I banned tipping at my restaurant, the service got better and we made more money

Tipping, as a compensation scheme, is great for everyone.

Restaurant customers like tipping because it puts them in the driver’s seat. As a diner, you control your experience, using the power of your tip to make sure your server works hard for you.

Restaurant servers like tipping because it means their talent is rewarded. As a great server, you get paid more than your peers, because you are a better worker.

Restaurant owners like tipping because it means they don’t have to pay for managers to closely supervise their servers. With customers using tips to enforce good service, owners can be confident that servers will do their best work.

There’s only one problem: none of this is actually true. I know because I ran the experiment myself.

For over eight years, I was the owner and operator of San Diego’s farm-to-table restaurant The Linkery, until we closed it this summer to move to San Francisco. At first, we ran the Linkery like every other restaurant in America, letting tips provide compensation and motivation for our team. In our second year, however, we tired of the tip system, and we eliminated tipping from our restaurant. We instead applied a straight 18% service charge to all dining-in checks, and refused to accept any further payment. We became the first and, for years, the only table-service restaurant in America where you couldn’t pay more money than the amount we charged you.

You can guess what happened. Our service improved, our revenue went up, and both our business and our employees made more money. Here’s why:

Researchers have found (pdf) that customers don’t actually vary their tips much according to service. Instead they tip mostly the same every time, according to their personal habits.
Tipped servers, in turn, learn that service quality isn’t particularly important to their revenue. Instead they are rewarded for maximizing the number of guests they serve, even though that degrades service quality.
Furthermore, servers in tipping environments learn to profile guests (pdf), and attend mainly to those who fit the stereotypes of good tippers. This may increase the server’s earnings, while creating negative experiences for the many restaurant customers who are women, ethnic minorities, elderly or from foreign countries.
On the occasions when a server is punished for poor service by a customer withholding a standard tip, the server can keep that information to himself. While the customer thinks she is sending a message, that message never makes it to a manager, and the problem is never addressed.
You can see that tipping promotes and facilitates bad service. It gives servers the choice between doing their best work and making the most money. While most servers choose to do their best work, making them choose one or the other is bad business.

By removing tipping from the Linkery, we aligned ourselves with every other business model in America. Servers and management could work together toward one goal: giving all of our guests the best possible experience. When we did it well, we all made more money. As you can imagine, it was easy for us to find people who wanted to work in this environment, with clear goals and rewards for succeeding as a team.

Maybe it wouldn’t work in every restaurant, in every city. Maybe the fact that it worked so well for us was due to some unique set of circumstances. Then again, other service industries like health care and law aren’t exactly lining up to adopt tips as their primary method of compensation. So maybe we’re all just being suckered into believing tipping works.

It’s something you can think about, at least, the next time you’re waiting on a refill of iced tea.

Garcia Bronco · 08-16-2013, 05:52 PM

Quote:

Originally Posted by siberian khatru

Well played

|Zach| · 08-16-2013, 06:39 PM

Quote:

Originally Posted by BWillie

I don't cook, ever. Next time I go to a nice restaurant, I should ask if I can decline a server. Ask them if I can pick up my shit from the window and fill up my drink on my own. Then just watch their bewildered look

You're such a contrarian. Unique yet brave and hilarious.

|Zach| · 08-16-2013, 06:41 PM

Quote:

Originally Posted by Fish

No, nobody was pretending that it was completely removed from the equation. Quite the opposite. The restaurant was actually vocal to customers about the included 18%, and referred to that as justification for why they didn't accept tips. They weren't trying to pull the wool over anybody's eyes at all. Employees weren't "Golden" simply by removing tips. They still have to provide proper service, or they'll get fired. Tips aren't the sole reason for a waiter to provide proper service. That's complete fallacy.

A dynamic that existed before.

**Bugeater** · 08-16-2013, 07:32 PM

Quote:

Originally Posted by Rain Man

Did they let you look at their breasts in lieu of your tip share?

After dealing with those dumb bitches for 6 hours, the only thing I wanted to see at the end of the night was my fist punching their faces.

|Zach| · 08-16-2013, 07:43 PM

Quote:

Originally Posted by Bugeater

After dealing with those dumb bitches for 6 hours, the only thing I wanted to see at the end of the night was my fist punching their faces.

Yea, that is not an optimal situation.

Fish · 08-16-2013, 08:09 PM

Quote:

Originally Posted by |Zach|

A dynamic that existed before.

Did the word "Still" confuse you a bit there?

|Zach| · 08-16-2013, 11:56 PM

Quote:

Originally Posted by Fish

Did the word "Still" confuse you a bit there?

It is just funny hearing proponents of the no tipping thing remind us all the ways it is the same. I mean...before they go out of business that is.

Imon Yourside · 08-17-2013, 02:18 AM

Quote:

Originally Posted by J Diddy

I tell you what clown I would be more than happy to substantiate mine with a claim from a franchisee in this area. Can you do that. Didn't think so.

Sure, I have 2 friends that are area managers for Pizza hut and you're claiming they pay minimum wage or more? The only company I know that does that is Sarpinos and they don't pay their drivers a penny for gas/car reimbursement. You claim that Dominos is the only pizza place that pays their drivers less than minimum wage?

kcchiefsus · 08-17-2013, 04:30 AM

Quote:

Originally Posted by BWillie

I don't cook, ever. Next time I go to a nice restaurant, I should ask if I can decline a server. Ask them if I can pick up my shit from the window and fill up my drink on my own. Then just watch their bewildered look

I've got a better idea. It involves murder-suicide with you and your family. Sound fun?

**BigMeatballDave** · 08-17-2013, 04:59 AM

Quote:

Originally Posted by BWillie

I don't cook, ever.

Why not?

Stupid? Lazy?

**Mr. Flopnuts** · 08-17-2013, 05:30 AM

Quote:

Originally Posted by ThaVirus

You're a ****ing cheapskate.

I often tip well over 20% and I NEVER do so to brag about it or feel good about myself. I do it because I've been there and I know how much that great tip can mean for the person that gets it.

I've never missed a single dollar that has gone to tipping.

Dude, he works in the insurance industry being shit on by everyone he comes into contact with, and lucky if he makes 40k a year. Let him act all high and mighty. This is the only place he gets the chance.

**Mr. Flopnuts** · 08-17-2013, 05:35 AM

Quote:

Originally Posted by BWillie

I don't cook, ever. Next time I go to a nice restaurant, I should ask if I can decline a server. Ask them if I can pick up my shit from the window and fill up my drink on my own. Then just watch their bewildered look

So you talk about their lack of skills, but you can't fry an egg? At least you can assess what they're worth...

08-15-2013, 02:57 PM
Fish Ain't no relax! Join Date: Sep 2005 Casino cash: $2328919	Restaurant bans tipping. Guess what happened? After I banned tipping at my restaurant, the service got better and we made more money Tipping, as a compensation scheme, is great for everyone. Restaurant customers like tipping because it puts them in the driver’s seat. As a diner, you control your experience, using the power of your tip to make sure your server works hard for you. Restaurant servers like tipping because it means their talent is rewarded. As a great server, you get paid more than your peers, because you are a better worker. Restaurant owners like tipping because it means they don’t have to pay for managers to closely supervise their servers. With customers using tips to enforce good service, owners can be confident that servers will do their best work. There’s only one problem: none of this is actually true. I know because I ran the experiment myself. For over eight years, I was the owner and operator of San Diego’s farm-to-table restaurant The Linkery, until we closed it this summer to move to San Francisco. At first, we ran the Linkery like every other restaurant in America, letting tips provide compensation and motivation for our team. In our second year, however, we tired of the tip system, and we eliminated tipping from our restaurant. We instead applied a straight 18% service charge to all dining-in checks, and refused to accept any further payment. We became the first and, for years, the only table-service restaurant in America where you couldn’t pay more money than the amount we charged you. You can guess what happened. Our service improved, our revenue went up, and both our business and our employees made more money. Here’s why: Researchers have found (pdf) that customers don’t actually vary their tips much according to service. Instead they tip mostly the same every time, according to their personal habits. Tipped servers, in turn, learn that service quality isn’t particularly important to their revenue. Instead they are rewarded for maximizing the number of guests they serve, even though that degrades service quality. Furthermore, servers in tipping environments learn to profile guests (pdf), and attend mainly to those who fit the stereotypes of good tippers. This may increase the server’s earnings, while creating negative experiences for the many restaurant customers who are women, ethnic minorities, elderly or from foreign countries. On the occasions when a server is punished for poor service by a customer withholding a standard tip, the server can keep that information to himself. While the customer thinks she is sending a message, that message never makes it to a manager, and the problem is never addressed. You can see that tipping promotes and facilitates bad service. It gives servers the choice between doing their best work and making the most money. While most servers choose to do their best work, making them choose one or the other is bad business. By removing tipping from the Linkery, we aligned ourselves with every other business model in America. Servers and management could work together toward one goal: giving all of our guests the best possible experience. When we did it well, we all made more money. As you can imagine, it was easy for us to find people who wanted to work in this environment, with clear goals and rewards for succeeding as a team. Maybe it wouldn’t work in every restaurant, in every city. Maybe the fact that it worked so well for us was due to some unique set of circumstances. Then again, other service industries like health care and law aren’t exactly lining up to adopt tips as their primary method of compensation. So maybe we’re all just being suckered into believing tipping works. It’s something you can think about, at least, the next time you’re waiting on a refill of iced tea.
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