A tipless restaurant, 11 part series

Part 1

Only legal to take tips if its mandatory service charge

Tips cannot be controlled by employer -> employees will socially distribute them, ostracize employees who don't follow along, and game systems for acquiring and distributing tips

Some guys [only guys] complained that they couldn't tip women in order to exert influence on them

Food quality increased, margins decreased because of increased control over business

Part 2

Restaurants have very slim margins and not much room for discretion.  A restaurant will profit between 0 and 4% of revenue.

In a typical shift with $1000 in F&B, $300 goes to labor which covers 2 cooks @8h, 1 dishwasher @8h, and 2 servers @6h = 36 hours labor.  That means everyone gets $8/h minwage.  There is also an extra $220 paid as tips, which if the business could distribute, would distribute it more equally.  Instead server makes $26/h and everyone else $8/h.

His restaurant refused to accept additional tips.  Tips averaged 21-22% and the service charge was 18%.  Removing the option of tips was the only way to excise a parasitic business.

Part 3

"If no tipping, how will servers be motivated to do a good job" is laughable - every other job is a counterexample.

His best service staff don't even look at tips until the end of the night, they are focused on the job.  Staff that talk about tips during service were always weaker.  Probably because their mind is on that instead of being fully engaged in simultaneously filling the needs of 25 people.

Better service can only increase tips marginally (0-3% if that), much better off for servers interested in money to serve tables quickly during peak hours.  Incentives do not align - server makes a lot more money serving high numbers of tables despite giving poor service.  Server will bully staff/managers to get more tables assigned.

Part 4

We couldn't implement service-included at our bar because $8.50 drinks were a lot easier to sell than $10 drinks.

Customer's decision to tip is not very related to quality.  Idea that they "hold staff accountable" is false.  Bad servers take okay tips as proof that they are acceptable.  Thus, tipping removes incentive for poor performing servers to improve.

Part 5

Some small number of guys are mad at service-included policy.  "I always tip way more than 20 percent!"  Why would guys be mad about only paying 18%, far less than they otherwise would?

Service staff were mostly women under 30.  Tippers that were upset were 33-55 males.  A lot of the reason was because they liked feeling that they were exercising control over the waitress.

When he went to service-included, he thought that his female service staff would be less flirtatious, because they were flirting to increase tips.  They became more flirtatious because it was clear that it was more genuine.  In the stripclub like environment, the feeling is that a girl can never like sex, but only pretend to like sex for money.

Service-included was a threat to these men that no longer had the prospect of withholding income to protect themselves for rejection.

Author believes propping up the meme that "tipping allows our culture to perpetuate the myth that women aren't sexual but only pretend to like sex in order to make money" is the more important role of tipping, and service was just a ruse.

Part 6

Some service staff don't like say, black patrons because they on average tip less, and this promotes racist behaviors or bad service.

Employers, who are not considered the source of tips, can use access to the tipping revenue stream as punishment.  Examples he remembers: a woman who gained weight was moved to bad shifts, a woman who refused sexual advances from mgr was moved to bad shifts.

Tipping culture rewards employees for being white and attractive females.

PS 1.

The author emailed a restaurant critic who called out one of his servers by name during a review.  During an exchange, the critic says: "with your fixed service charge, I can't give him a lower tip.  How else can I punish him for his mistakes?"

Some patrons feel the burden of having to reward/punish good/bad behavior, which is bizarre.

One policy the restaurant had is to remove the service charge if the guest brings a notable problem to the manager.  Some guests would bring a problem to our attention, often as a way to show that the lack of tipping had "caused" the service mistake.  Our managers would apologize, thank the guest, then remove the service charge from the bill.  That sometimes would make the guest furious.

By both research and experience, the punishment 'message' doesn't get through to the server, who largely correctly doesn't view their tips as reflecting the quality of their work.  The right to punish the server is solely for the benefit of the punisher, and no larger benefit is created.

If a guest pointed out a mistake, we make sure the server has the tools to do the job right.  No business builds a great team by looking for mistakes to punish.  People that were fighting to keep their punishment rights, were keeping us from getting better.

Negative customers were repelled from his service-included restaurant and this was a great thing that made life easier.

PS 2.

Some places auto-grat for parties of 5 or more.  Why do some feel that it is off limits to implement that policy for 1 or more?

PS 3.

When you get bad service you typically tell someone.  But in restaurants, you are taught to tip less.  When you tip less, one of three things can happen:

server thinks you are cheap,

server knows you were unsatisfied and the fault was someone else's, they will let that person know there is a problem.  They won't tell a manager because noone likes a tattletale, unless that person is repeatedly making mistakes.

server knows you were unsatisfied and it was the server's fault, who won't tell anyone so he doesn't get in further trouble.

The end result of you sending your message is that noone is listening.

With service included, servers would bring a manager and guests would feel more free to bring up problems.

PS 4.

Some servers shame public figures on social media for not tipping adequately.  By making the employer not responsible for paying full wages of the worker, we introduce a lot of randomness in the system, and people who get randomly screwed have no remedy.

Closing thoughts.

I didn't get into this to reform tipping, but because I wanted a better and more efficient restaurant.  Not everything we do is perfect, but thanks for listening.