Restaurant bans tipping. Guess what happened?

[Fish]

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.

[KC native]

Originally Posted by Guru

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.

This.

[KC native]

Originally Posted by Frosty

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

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

[Frosty]

Originally Posted by KC native

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

Hah! I finally beat someone!

[Tombstone RJ]

Originally Posted by Just Passin' By

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.

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

[Iowanian]

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.

[ShortRoundChief]

Originally Posted by DaFace

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.

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.

[AustinChief]

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.

[Tombstone RJ]

Originally Posted by Iowanian

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.

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.

[ShortRoundChief]

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?

[BWillie]

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

[kysirsoze]

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.

[kysirsoze]

Originally Posted by BWillie

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%

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

[Tombstone RJ]

Originally Posted by kysirsoze

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.

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.

[ShortRoundChief]

Originally Posted by kysirsoze

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.

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

[vailpass]

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