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.

[|Zach|]

The place is closed now which makes this whole thing funny.

LETS FOLLOW THE LINKERY TO THE NEW WAY!



I bet when this got instituted this place financially was on the ropes so the owner thought he could get some attention to his place (mission accomplished) with this system conveniently showing it off as his idea and also being able to tout it was a great success.

I imagine this system allowed the place to get by longer because they had more money in house to float to give them flexibility to keep things going. The discussion on the pros and cons of tipping is an interesting one but I really have a lot of skepticism in regards to the true motivation of the owner.

[Gravedigger]

Let me fill you in on some delivery driver knowledge.

7.25 an hour while inside the store, 4.25 an hour while on the road. 1.30 out of your $2 + delivery charge goes to the driver per delivery. The driver pays for wear and tear, gas and is held responsible for anything that happens on the road if its their fault or not.

$1 tip or lower = cheap ass get out and get your own pizza.
$2 = Nut tap.
$3 = Average.
$4 = Thank you! You just helped me forget the last shitty customer who didn't tip.
$5 + = You're a great person. Ill be sure to bring you your pizza first next time.

I worked for 10+ years as a driver, AM, AGM and GM. I've seen it all, I've heard it all, and if you tip online $1.00 and the driver has a second delivery that gave him $3 or more, guess who gets their pizza first?

[ShortRoundChief]

Originally Posted by |Zach|

People in back get a set rate (which they agreed upon because they work there) whether it is busy or not. Guaranteed as long as they are there working their hours.

There is value in guaranteed money. That isn't the case with the driver.

You do realize I spent the last 10 years of my life as a general manager and district manager of a pizza place?

Up until the mandatory minimum wage hike in mo everyone was paid minimum wage in my company. When it went over 7 drivers got paid $1 less plus tips, plus mileage.

[ShortRoundChief]

Originally Posted by KILLER_CLOWN

Drivers now make $4-$5/hr and have the 3rd most dangerous job in America with the Bad drivers and crime. Most of them do A LOT more than just drive the pizza to your house. Even back when I drove I made the pizzas, cut them, prepped up the ingredients and delivered them. They also destroy very expensive vehicles coming to your door.

Nobody in this area makes that little. Literally it's one company that pays sub minimum wage and it's the one I came from.

Like I said I just spent the last 10 years running a Dominos as a Gm and DM.

[PornChief]

Australia doesn't have this culture of tipping and I'd love it if one of you guys came down one day just to see for themselves and tell me what it's like. But then even kids working at McDonald's get about 16-17 bucks an hour and most waitresses in cafes would get paid a bit more than that. Some places have a weekend and holiday surcharge (10%-20%) since you got to pay staff time and half or double time (hols and Sundays).
Even pizza delivery is protected by law, gotta earn at least the minimum wage after expenses. Think that's about $15.75.

[|Zach|]

Originally Posted by J Diddy

You do realize I spent the last 10 years of my life as a general manager and district manager of a pizza place?

Up until the mandatory minimum wage hike in mo everyone was paid minimum wage in my company. When it went over 7 drivers got paid $1 less plus tips, plus mileage.

That doesn't change the reality of what I said.

I am not saying I know more about running a pizza place than you just more so touching on kitchen vs drivers thing. I don't think the non drivers have any room to bitch.

[007]

Originally Posted by Gravedigger

Let me fill you in on some delivery driver knowledge.

7.25 an hour while inside the store, 4.25 an hour while on the road. 1.30 out of your $2 + delivery charge goes to the driver per delivery. The driver pays for wear and tear, gas and is held responsible for anything that happens on the road if its their fault or not.

$1 tip or lower = cheap ass get out and get your own pizza.
$2 = Nut tap.
$3 = Average.
$4 = Thank you! You just helped me forget the last shitty customer who didn't tip.
$5 + = You're a great person. Ill be sure to bring you your pizza first next time.

I worked for 10+ years as a driver, AM, AGM and GM. I've seen it all, I've heard it all, and if you tip online $1.00 and the driver has a second delivery that gave him $3 or more, guess who gets their pizza first?

And this is the problem with tipping. Preferential treatment.

I understand being upset with the crappy tippers but a drivers job is to deliver the pizza to a paying customer. The money for the pizza is, after all, going toward their salary as well.

[Bugeater]

Originally Posted by Gravedigger

Let me fill you in on some delivery driver knowledge.

7.25 an hour while inside the store, 4.25 an hour while on the road. 1.30 out of your $2 + delivery charge goes to the driver per delivery. The driver pays for wear and tear, gas and is held responsible for anything that happens on the road if its their fault or not.

$1 tip or lower = cheap ass get out and get your own pizza.
$2 = Nut tap.
$3 = Average.
$4 = Thank you! You just helped me forget the last shitty customer who didn't tip.
$5 + = You're a great person. Ill be sure to bring you your pizza first next time.

I worked for 10+ years as a driver, AM, AGM and GM. I've seen it all, I've heard it all, and if you tip online $1.00 and the driver has a second delivery that gave him $3 or more, guess who gets their pizza first?

That's ****ing absurd. No way in hell I'm tipping $4-5 on a pizza. Get a different job.

[007]

Originally Posted by Bugeater

That's ****ing absurd. No way in hell I'm tipping $4-5 on a pizza. Get a different job.

I can see it if you are spending $30 or more on pizza. But for a single pizza, no friggin way. But that is why I drive 2 miles to get my own pizza.

[WhiteWhale]

Originally Posted by |Zach|

The best tippers (very generally) behind wealthy men are professional women.

Chickens can fly when they're high on acid.

See? I can say random shit and pretend it's true as well.

[Bugeater]

I dated a waitress for 5 years when I was in my 20s, her and the other waitresses always maintained that it was working-class men who tipped the best. But that was 20 years ago...I know Zach has been in the business more recently so maybe things have changed.

[Dayze]

if service is excellent, I usually tip 20% or slightly more; and usually call the manager over to tell them server/waiter/waitress etc is doing an excellent job.

[Skyy God]

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.

Nothing creepy at all about this.....

[MahiMike]

I dont dare comment on this one...

[kindra68]

Originally Posted by Guru

... Do in house pizza bakers make less than minimum wage like waiters do?
...

the place i work, the hostesses and kitchen make more than minimum wage and still get tipped out.