No Tipping Policy Pared Down at One Restaurant Chain

“B ack in November of 2015, employees of Joe’s Crab Shack working in the front of the restaurant — such as servers — were to earn $12.00 to $14.00 per hour with the potential to earn more money per hour” was what I wrote in this article earlier this year…

No Tipping Policy Pared Down at One Restaurant Chain

…but after 18 months, apparently the policy generally proved unpopular with both customers and employees of Joe’s Crab Shack. According to this article written by Ron Ruggless for Nation’s Restaurant News, Robert Merritt — who is the chief executive officer of Ignite Restaurant Group, of which Joe’s Crab Shack is one of its concepts — said that “customers disliked the no-tipping policy for two reasons: first, they didn’t want to lose control of incentivizing service, and secondly, they didn’t trust management to pay the increase price to employees.”

The menu prices had increased at Joe’s Crab Shack in the restaurants being tested with the no-tipping policy; and has since pared back as tipping is returned to 14 of the 18 restaurants — meaning only four restaurants remain with the no-tipping policy.

Some Restaurants Recede From — and Other Restaurants Embrace — No-Tipping Policy

“In other evidence of growing pains, some discontent was reported in March among servers at Roman’s, a popular property in the mini-empire of the Brooklyn restaurant owner Andrew Tarlow, who followed Meyer’s lead in December by announcing that he would seek to go gratuity-free by the end of 2016”, according to this article written by Adam Chandler for The Atlantic. “And, in San Francisco, Thad Vogler reverted back to accepting gratuity in January after experiencing high staff turnover among the formerly-tipped when he eliminated gratuity the previous year.”

This may seem like doom and gloom for the no-tipping policy in the restaurant industry; but there are simultaneously other restaurants which are still embracing it: “Though Portland isn’t at the front of the trend, at least a half-dozen local restaurants have incorporated gratuities into the price of the meal”, according to this article written by Samantha Bakall for The Oregonian. “In many states, tips are used to supplement a lower minimum wage for servers, a practice known as a ‘tip credit.’ Oregon has no tip-credit law. Servers here earn a base pay of $9.75 an hour, before tips. At fine-dining restaurants, where tips can rise to three figures, that number can grow much higher.”

Summary

I was surprised not to learn about this news sooner, as the no-tipping policy was rescinded at those 14 locations of Joe’s Crab Shack back in May of this year — but the trend appears to be in a state of flux, depending on which restaurants are involved.

As I have said in the past, I have dined out in a wide range of eating establishments. While there are certainly slackers who tend to be too slow; get the order wrong; or seemingly disappear from sight altogether, there are plenty of servers who work very hard for their money and deserve to be compensated accordingly — and I will give them a gratuity despite my not liking the practice of tipping in general…

…but what exactly is the solution to replace tipping? Is it to have a service charge automatically added onto the bill, as is done in many restaurants in Europe? Is significantly raising the prices of menu items to compensate for the difference — as has been done with restaurants of the Union Square Hospitality Group in New York — the answer? Would a customer paying a server “by the hour” as a gratuity be fair compensation? Should tipping even be eliminated at all?

The answer to that conundrum is simple to state but not easy to execute: it is the one where a person can enjoy dining on a good meal with attentive service for a reasonable price at a dining establishment; while the servers and other restaurant employees receive at least a decent wage with benefits — with the owners and management of restaurants earning profits. I would think that that ideal threshold — or “sweet spot” — would vary based on a variety of factors: location, kind of dining establishment, culture, type of food served, style of service being offered as only five examples…

…but that win-win-win balance needs to be achieved for all possible even though “one size does not fit all”…

Photograph ©2016 by Brian Cohen.

6 thoughts on “No Tipping Policy Pared Down at One Restaurant Chain”

  1. Carl P says:

    I didn’t see anywhere they said the prices would go back to where they were. Or will there be higher prices and expected tipping?

    1. Brian Cohen says:

      “The company had increased menu prices in the test restaurants and is rolling those back as tipping is returned.”

      That statement was from this article to which I linked, Carl P:

      http://nrn.com/latest-headlines/joe-s-crab-shack-cuts-back-no-tipping-test

      I was going to add that at least those restaurants are not as sneaky as the airlines, which did not lower airfares when they unbundled products and services and introduced ancillary fees — but I cannot definitively prove that…

  2. Willy says:

    As usual the whole concept of tipping goes misunderstood. Tipping is only lightly related to the level of service received in that instance. It’s much more of a downpayment on future service. It’s certainly the best way to get a server to remember your preferences. Customers who continue to think they tip based on the service then received will be forever doomed to dissatisfaction when it comes to adding extra money to a service bill.

    1. Brian Cohen says:

      You are probably correct, Willy

      …interestingly, what you state is similar to how frequent travel loyalty programs work: designed towards future business and not based on past business.

  3. Lance Roycd says:

    I lived in Australia for 20 years, I returned to the States in 2014. Australia has a no tipping policy and the service in general goes from poor to indifferent! I love the service I get here in Chicago and I tip extra for extraordinary service!

    1. Brian Cohen says:

      Thank you for bringing a point of view from outside the United States, Lance Roycd.

Leave a Reply

Your email address will not be published. Required fields are marked *