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.

Upscale NYC sushi place does the same thing: http://abcnews.go.com/blogs/headline...ant-bans-tips/

Mr. Pink approves

Good news!

Amy's Baking Co.?

I would eat at this place every day.

I'm not sure how that's banning tipping. Seems to me it's a way for the company to get a cut of the tips.

I agree with the approach this guy is taking, but wish he would actually factor the tips into his prices instead of mandatory tip, which is kinda what he did.

All this does is show that the average person tips less than 18%. They're still trying to turn over as many people as they can to get the next table to charge another 18% regardless of service quality.

I'm curious as to how much the server actually gets.

+1

So the customer can do nothing when they get shitty service?

How do they quantify their service improved?

How do they correlate that the increased revenue was due to no tipping policy?

Probably because they take a slice of that pie for themselves instead of the waiter pocketing the tip if its paid in cash.

They can choose not to return.

One could argue that because they had to shut their business down and are attempting a different store 8 hours away that the business plan was a failure.

What difference would it make? Currently, it's a percentage of the total bill at the discretion of the customer. Now it's a fixed percentage of the total bill every time. It's simply shifting the responsibility of of the same amount a customer would (hopefully) be tipping, to the store. As long as the employer isn't a dick and pays an actual fair amount everybody wins. That's the way every other business is run. If the employer abuses it, they won't have employees any longer.

Or a business(see closing the store down)

So, the only people who consistently tip well are 'merican caucasian males ages 18-60?

Why do the libtards hate us so?

While true, it would be tough to present it that way. Why would anyone go there instead of to a competitor if all of their "prices were so much higher"?

If the entire world transitioned away from tipping, then I agree - build it into the price. For now, I understand why they handled it like they did.

always drives me nuts when I see another table get preferential treatment because they are known big tippers while another table gets practically ignored even though they tip 18-20%.

I'm sick of tip snobs.

First thing that popped in my head.

People anticipate tipping already. Or at least should.

They could go to Restaurant A and expect to pay $8 + $2 tip.

They could go to Restaurant B and expect to pay $10.

Both situations, the waiter ideally should receive the same.

hey black waitress lady gal, you KNOW where da $$ at, right over here!!!!!!!!!!

It doesn't sound like banned tipping...it sounds like mandatory tipping.

It's like a table of 10 or more. When you automatically charge me 18%, it costs the other 6% I may have tipped on the group.

<iframe width="420" height="315" src="//www.youtube.com/embed/V1ZZWhSvOMI" frameborder="0" allowfullscreen></iframe>

As one who's worked in the industry briefly, I'll just note that my experience was that there was a clear connection between quality, friendly service and larger tips, as well as a bit of a sales increase.

This thread would be to 500 posts already if Hootie were still here.

This.

goddamn it. I was just about to post this too.

Hah! I finally beat someone!

for me, great service won't necessarily get you a larger tip, but lousy service definitely will get you a lousy tip.

Sometimes, I like to tease the waiter/tress a little when they bring the check and I'll deadpan ask them "how do you feel about tips?" They'll usually give me the "huh" look and I'll say "would you say you are for them or against them". Typically it results in a nice exchange and I tip well.

A while back, I was eating with a coworker and at the end of the meal I ask the waitress "how do you feel about tips". She looks at me like I've just shat upon my plate and then I realize she's a..top heavy gal......I laugh a little and then spell it....t-i-P-s tips....then she laughed.

If the servers are friendly and attentive, I take care of them.

I said nothing of the prices being higher. I said it's their way of getting their cut, which every bit of evidence leads to.

Thank God for this oh so scientific study!!! That restaurant's grand "experiment" proves two things... jack and shit.

That being said, I think some of their guesses might have some credence.

The best system I have seen is what you see in most of Europe. Servers are paid REAL wages and that gets factored into pricing. It really doesn't increase prices drastically and you can still tip if you want to but it isn't at all expected. Most of what I saw was that people would leave a portion of their change as "tip." And when I say change I mean low value coins. The first time that I left what I considered a regular tip, the waiter chased me down to give me back the money I must have forgotten on the table. Of course after I explained that it was a tip I was treated to exceptional service at that spot from then on out.

because you are a white american male. I generally tip 20% and yes, a great attitude and good service will guarantee this for the waiter. However, if they suck so does the tip.

I'm just curious why the restaurant shut down if this grand experiment was such a success? He says that they're getting ready to open a new one sure, but why shut down a successful restaurant?

So how did they eliminate tipping? They now force you to pay a 18% service charge. That is more than MOST ppl probably tipIin the 1st place.

Around my neighborhood and places I go to frequently I tip arounf 20% and I think its reeruned. When im out of town I tip as little as possible, usually like 8 to 10%. I shouldnt even tip at all, my life would have been much better. I estimate if Irefused to tip EVER throughout my entire life I would save $131, 000. ONE HUNDREDANDTHIRTYONE THOUSAND

As a former server, I would be all for this. I completely agree that, for the most part, quality of service doesn't greatly affect the tip. If someone is just terrible, sure, but just excellent service where nothing goes wrong? Not much.

The bigger difference in tip size, I've noticed, is whether they like you or not. Seriously, the servers who were big personalities that practically entertained the table always got the biggest tips (over the course of a night). I know some of you will say you don't like a super outgoing server, but trust me, most people love it. I was never that way. I did pretty well, tip-wise, but I couldn't bring myself to be a game show host at the dinner table.

That aside, This makes so much sense. It's essentially requiring tips and then pooling them for all the servers. Whenever I worked on a large party with a partner, they ALWAYS got better service than if we split them into two parties. Sure, servers help each other, but there's always a though to the fact that "I need to make my money." This eliminates that and would, I think, create a great teamwork atmosphere that would end up being much better for the customer, more consistent for the server, and much less stressful for the entire restaurant.

Thanks for providing more evidence that this is a great idea.

Except if you are a sexy cocktail waitress with a great personality, then you'll hate this system. I know because I dated one and the $ she made was goooood.

There's no mention of it going to the servers. It is nothing but a surcharge and is used to pool together the labor costs according to this article:

http://www.takepart.com/article/2013...ess-restaurant

I like the tipping system, it's fair. Give me good service and I'll pay you for it. If not, no.

There's a good podcast on the subject in the link below. From actual "Experts" on the subject...

5 reasons we should ban tipping
The practice is confusing, inefficient and ultimately discriminatory, researchers say.

If you listen to the latest Freakonomics Radio podcast, you may never want to tip again. Host Stephen Dubner interviews one of the country's experts on tipping, Cornell University professor Michael Lynn, who has written 51 academic papers on the subject.

In the podcast, Lynn was asked what he would do differently if he could go back in time and rewrite the social norms related to tipping. What would he change?

He said he would outlaw tipping completely. That's a surprising response from someone who has basically devoted his career to studying the practice. Some restaurants already do this. Dubner mentions The Linkery in San Diego, which bans tipping in favor of an 18% service charge for diners.

From the experts in the podcast, here are five reasons the U.S. should ban tipping:

It's discriminatory. This is Lynn's No. 1 reason for outlawing tipping. In his research, he's found that the people who get the most tips are slender white women in their 30s with large breasts. What a surprise.

He's also found that minorities get fewer tips in general. When you have an aspect of employment that hurts a broad class of people, whether it's intentional or not, that's absolutely discriminatory. This is a class-action lawsuit just waiting to be filed.

It may lead to corruption. Another expert interviewed in the podcast, Magnus Torfason from Harvard Business School, said he has found that countries with more tipping have more corruption.

It's really uncomfortable. For the tipper, that is, and possibly for the tippee as well. That's because people don't know what they're supposed to tip and for what service. How much is enough? And do I have the right bill on me? I can't really ask this person to break a $20 bill, can I? Help!

It's essentially subsidizing businesses. Lynn has estimated that about $40 billion a year is given in tips in the United States. Dubner pointed out that NASA's annual budget is less than $20 billion. So we could build two NASAs with all the money being tipped. That's money that businesses don't have to pay to their waitresses and other service employees.

It shifts work away from the employee. Tipping can actually create so much unease that some customers end up doing the work instead of the employee. For example, people carry their own luggage to their hotel rooms even though there are workers hired to perform that specific service. People park their own cars farther away, even though there's a valet right there at the door. As a result, some service workers end up with nothing to do, which is inefficient and wastes a company's resources.

Well I guess It'd depend on how the payment of the servers worked, but if they could pay servers somewhere close to what a comparable serving job would pay, I would take the consistency and fewer headaches in a heartbeat. I'd miss the occasional huge nights, but I certainly wouldn't miss the opposite nights where you end up with every tightwad in the place and have to eat ramen.

Tipping is gay.

I thought the bolded part was pretty interesting. I'd never thought about that.

From that article:

Right now minimum wage for tipped workers is $2.13.

And how does charging a mandatory 18% change that? If anything, it encourages it as they're guaranteed that percentage regardless of what they do.

The interesting thing is that most people would immediately take consistency. If you offer a person a wage of $15 per hour or a wage of $10 per hour with tips that average $5 or even $6, a majority of people will take the $15. So why do we assume that restaurant workers would make the opposite choice? I think they do it because it's offered, not because it's a better system.

I dont want a waiter at all. Im there for the food and for someone to clean the dishes so I dont have to. I like the system that Oklahoma Joes uses. You order, they have a counter, you get your food and sit down an eat it. Is having someone bring you your food and water so you dont have to ever lift your fat ass worth $15? It isnt to me.

I think it does the opposite. It creates an incentive for a person to take fewer tables, not more, which means better service for the customer.

It's up to the restaurant manager to ensure that they're serving enough tables to be profitable, but that's a management issue and is best left in the hands of the manager rather than the server.

How do you ensure consistency from a consumer stand point when the server doesn't bear a responsibility to?

How so? The more people they move the more guaranteed tips they get

The same way you do at a grocery store or a mechanic's shop or a dentist's office. Restaurant workers are the same species as other workers who don't take tips, so I don't understand why they have to be treated like Skinner's rats. Do they have no work ethic until the pellet rolls down the chute?

Maybe I don't understand the system. Are they getting the 18% at the end of the night or are they being paid a standard livable hourly wage?

If it's the first, then I guess there's the same incentive to maximize tables and minimize service (or it's even worse), though I think that disassociating Table 14 with that $10 bill will help. If it's the second, the problem is solved.

WTF....I bring $10 rolls of quarters so I can make it rain for my table server! What am I supposed to do now??? :sulk:

I tip huge because I can. If someone is busting their ass I will give them what I can afford.

I can get behind this article. I don't carry cash so it is annoying when I run into situations where they are expecting cash tips. I go out of my way to avoid those situations but sometimes they still crop up.

I would have less problem with tipping if people would stop using it as a bribery system to get more attention and just tip standard like most other people.

I just view it as a tax unless something amazing happens, like I fall down a well and they rescue me.

I've lately started rounding up to prove to myself that I'm a nice guy, but my tip distribution looks something like this:

15% tip - 0.1% of my tips if the person is a total dud.
18% tip - 2% of my tips.
20% tip - 65% of my tips.
21% tip - 30% of my tips.
25% tip - 2.7% of my tips.
50% tip - 0.2% of my tips on smaller bills, just because I feel like a nice guy that day and the cute waitress touched my arm affectionately.

Read post #50.


Foghat ****ing rules.

No shit. I'm shocked at the number of people who think that removing the tipping system would turn waiters lazy and evil, and that the employer would simply allow it without consequences..

I would consider you a standard tipper.

Interesting article. On a personal note, I've been to the Linkery twice... the service sucked, and the food was mediocre. I was happy to see it go.

In California it is $8 for everyone.
http://www.minimum-wage.org/californ...-minimum-wage/

I did misread the previous statement and thought that it was the prior model where those wages were earned.
Basically, it's forced tipping with tip sharing within the company mandatory.

I hate forced tipping percentages and avoid places that do that.

FTR, I can see the tip sharing with having to pay over the federal minimum wage. The forced percentage is kind of excessive.

Agreed

AS a consumer I want to be empowered. I don't feel like just handing that power over. I can see why you might though.

So don't go to full service restaurants. Support quality business models like OK Joes. Easy as that.

I can tell you that the empowerment you envision is an illusion. The only way your tip is really going to result in better service is if you are a regular and you tip very well. Otherwise it's kinda luck of the draw with what server you get. Even if a service charge to pay the servers was included in lieu of a tip, you still have the right to complain if there is a problem, which is really the only thing that makes a real difference in a restaurant with tipping.

The wife and I ate there in April '09. That is, bar none, the best sushi I have EVER had. Everything was classy as ****, too.

Pretty much.

Yeah working in the restaurant business I can say this is pretty much bullshit, and wouldn't work for every style of food business.

You start charging 18% service charge on pizza deliveries, bet money your business won't be getting better. They charge a delivery fee, which the driver only sees half of that regardless of gas prices, but I'd like to know how much of that 18% he gives to his employees. You'd make money on bigger tickets, but 10% on a 20$ order isn't shit, I assure you.

As someone pointed out it sounds like the restaurant is making money on the waiter's cut and also taking more money from the customer in some instances than they are willing to give.

No, it's not as easy as that unless you want to eat at McDonalds and Chipotle every day. How many quality restaurants DON'T have waiters and waitress service? Honestly, Oklahoma Joes is probably the best there is and that is just because it's fkking BBQ. There is virtually no where you can get a good steak and NOT have waitress service.

It's a win win for the business and the consumer. The consumer doesn't have to incur those costs, neither does the business. I would think if anybody, the business/restaurant would prefer it because they have much less risk and overhead. No benefits, less liability, less labor costs, less payroll, admin etc. Somewhere along the way some rich fat ass was like, you know what, I don't want to get my happy ass up and get my drink. I want some kid to kiss my ass while I shove this big steak down my lard ass throat, so they can feel special. I don't need to feel special, I have accepted that I am not a beautiful and unique snowflake.

When you think about the incentive system, it does shed some light.

As the customer, your incentives are:

- if you're a regular, tip well regardless of service in hopes that you'll get good service next time.

- if you're not a regular and you get good service, your incentive to tip well is general kindness and a favor to the next customer, weighed against the fact that you leave with more money if you don't tip well.

- if you're not a regular and you get bad service, your incentive to tip well is the knowledge that you'll be called names after you leave, weighed against the fact that you leave with more money if you don't tip well and send a message for the next customer.


As the employer, your incentives are:

- None. You don't care either way. You want your good servers to get good tips to keep them. With your bad servers, do you want them to get good tips to keep them from grousing, or bad tips so they'll quit?

As the server, your incentives are:

- Avoid the really bad tips by providing at least minimal service.

- Scout out good tippers and give them particularly good service.

- Serve as many tables as possible because there's not that much variation in tips regardless of what you do.



I don't know if I learned anything from that, but I typed it so I might as well post it.

That is one of the most pathetic things I've ever heard.

What about the waitresses that bust their ass and it’s not all about just turning tables?
I work Monday – Friday 10am – 4pm. Monday & Tuesday I’m the only server. Wednesday I get a bartender that refuses to do anything but stay “in his warm spot” and play on his phone. Thursday I get a bartender and she gets the bar half of the restaurant (3 booths and 3 hightops) and Friday I get a bartender (same tables) and a waitress that splits the other half of the restaurant with me. Monday- Wednesday I run my ass off. I run sales over $500.00 each day. Thursday and Friday the business falls off. So much so last Thursday my sales were $181.00 and Friday $69.00. I have several people that only come in Mondays and Tuesdays. They know I’m the only one there and it might take me a second to get to them but when I do, I walk up with a smile and treat them like they are the most important people there. Heck I have a couple of people that only show up “after the rush” because they know I’m the only one there. As in I greet them at the door, seat them, get their drinks, get the food order, put the order in the pos, then wash my hands and go make the order (it’s an open kitchen). When the order is done I take it out of the oven and serve it to them. And if they are drinking anything from the bar it’s usually at this time they are close to empty, and so I run back to the bar and l make another round of drinks. And yes I do all this for $2.13 an hour. But on the flip side, would I do it for $10-$12 an hour and NO tips? Awe hell no!
((I’m not even going to get into the whole “tipout” bs))