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.

[aturnis]

Originally Posted by kindra68

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))

WHO THE **** ARE YOU!

[Fish]

Originally Posted by alnorth

I'm fine with a policy of a mandatory tip for extremely large parties, but if its just two of us and they stick me with the mandatory 18% gratuity, I probably will not return.

I typically tip a lot more than 18%, but I don't want to be forced to pay for service regardless of the quality.

18% on a small two person party isn't that much. For a $25 two person dinner, 18% tip comes out to $4.50. Are you really saying that's too much too expect, when you typically pay that much anyway and you know that the waiter is depending on your tip?

As you say, you typically tip more than that. The studies on tipping have shown that people generally pay the same despite the service quality. So in the restaurant's favor, it makes perfect sense. It's more likely than not that most people will tip routinely regardless of service quality. If the majority of people choose not to return, then the business will obviously fail. But I really question how many people would be turning down a meal in which they'd typically be paying the same meal price + tip regardless, on the ground that the tip is now expected. The only difference is the expectation factor of the measly 18%.

[Gravedigger]

Originally Posted by Tits McGee

http://thelinkery.com/blog/
Closed.

.... it's still the best business model you can have dammit!!!!! #noquitters

[alnorth]

Originally Posted by Fish

18% on a small two person party isn't that much. For a $25 two person dinner, 18% tip comes out to $4.50. Are you really saying that's too much too expect, when you typically pay that much anyway and you know that the waiter is depending on your tip?

As you say, you typically tip more than that. The studies on tipping have shown that people generally pay the same despite the service quality. So in the restaurant's favor, it makes perfect sense. It's more likely than not that most people will tip routinely regardless of service quality. If the majority of people choose not to return, then the business will obviously fail. But I really question how many people would be turning down a meal in which they'd typically be paying the same meal price + tip regardless, on the ground that the tip is now expected. The only difference is the expectation factor of the measly 18%.

I don't care what other people typically do. I want the option to tip anywhere between 5 cents to over 35% or anything in between. If a restaurant forces an 18% gratuity, I will probably not return. The restaurant in the OP is dumb.

[kysirsoze]

Originally Posted by Gravedigger

.... it's still the best business model you can have dammit!!!!! #noquitters

Restaurants open and close all the time. Very turbulent business to get into. This doesn't prove a poor business model any more than it's hypothetical great success would have proven that same model to be superior.

The theory, however, is sound IMO. And as someone who has spent years working in restaurants, I think this would certainly make for a better service experience and a happier workforce.

[2bikemike]

I have eaten at the Linkery. IMHO the food was way overpriced and not all that great. Portions were on the small side for me, but ok for my wife who hardly eats anything. And to tell you the truth I have had better service at many of the named chain restaurants.

[kysirsoze]

Originally Posted by alnorth

I don't care what other people typically do. I want the option to tip anywhere between 5 cents to over 35% or anything in between. If a restaurant forces an 18% gratuity, I will probably not return. The restaurant in the OP is dumb.

So if that same food came out to be $30 and there was no expected tip, would you not return? Would you avoid eating at restaurants in other countries?

[kysirsoze]

Originally Posted by 2bikemike

I have eaten at the Linkery. IMHO the food was way overpriced and not all that great. Portions were on the small side for me, but ok for my wife who hardly eats anything. And to tell you the truth I have had better service at many of the named chain restaurants.

A much more likely cause for the restaurant to close than tipping policy.

[Fish]

Originally Posted by alnorth

I don't care what other people typically do. I want the option to tip anywhere between 5 cents to over 35% or anything in between. If a restaurant forces an 18% gratuity, I will probably not return. The restaurant in the OP is dumb.

You would seriously refrain from an otherwise good restaurant because you couldn't control a minuscule tiny percent of the wage the waiter made? Control of that little difference of gratuity is that important to you? Enough to never return? Over a matter of maybe a single digit percent difference of one transaction out of several dozen throughout that waiter's day? The difference between choosing 18% +/- X, and having to just pay 18%?

Why is controlling that variable important enough to boycott the establishment?

[007]

This reminds me of another peeve of mine. Don't put tip lines on receipts when your place does nothing requiring a tip. It confuses customers. We have a couple pizza places that are carryout only and they put a tip line on there and it drives me nuts. You didn't do anything tip worthy.

[Bugeater]

Originally Posted by Guru

This reminds me of another peeve of mine. Don't put tip lines on receipts when your place does nothing requiring a tip. It confuses customers. We have a couple pizza places that are carryout only and they put a tip line on there and it drives me nuts. You didn't do anything tip worthy.

Agreed, my favorite BBQ joint does that shit, and while I usually pay cash I do sometimes use my debit card and it annoys me. Then on top of that they also have a tip jar on the counter which is equally annoying.

[ShortRoundChief]

Originally Posted by Guru

This reminds me of another peeve of mine. Don't put tip lines on receipts when your place does nothing requiring a tip. It confuses customers. We have a couple pizza places that are carryout only and they put a tip line on there and it drives me nuts. You didn't do anything tip worthy.

It's standard on credit card receipts. It's funny that you mention that though. They do a hell of a lot more for your pizza than the drivers. They take your order, make it, cook it, and box it. Driver drives it to your house making the same amount as them an hour, plus gas and tips.

[007]

Originally Posted by J Diddy

It's standard on credit card receipts. It's funny that you mention that though. They do a hell of a lot more for your pizza than the drivers. They take your order, make it, cook it, and box it. Driver drives it to your house making the same amount as them an hour, plus gas and tips.

Not to disrespect at all here J, but everything you just listed is what they get paid to do right? Do in house pizza bakers make less than minimum wage like waiters do?

The issue with tipping that gets me is that it used to just be table waiting, bell hops, and bartenders that was the tipped position. Now it seems every position is a tipped position. I'm referring to my local places not places like vegas where everything under the sun is tipped.

[007]

Originally Posted by Bugeater

Agreed, my favorite BBQ joint does that shit, and while I usually pay cash I do sometimes use my debit card and it annoys me. Then on top of that they also have a tip jar on the counter which is equally annoying.

We have a tip jar thread around here somewhere too. I hate that shit.

[Deberg_1990]

A bad waitress who's hot and has a nice rack will make more in tips than a very good waitress who's ugly.


Human nature....
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