Some people are neutral about tipping servers and bartenders, while others have stronger opinions. Either way, there is a trend to move away from tipping in restaurants. This trend is slowly turning into a movement in which major restaurants in large American cities are adopting. The usual tipping standard is 20 percent for excellent or good service. When a server or bartender makes this 20 percent, she must pool tips with other coworkers and/or tip out busboys (food runners) and/or dishwashers. Many people find this system archaic and wonder why restaurants can’t do away with tipping ASAP.
The problem comes down to, surprise, money! Yes, money will be an issue for the restaurant owner who does away with tipping. How? First of all, to pay servers a decent wage, restaurant owners must increase food prices, usually by 15 percent or more in order for their servers to have a base salary of $15 or more. For instance, in New York State, the minimum wage for tipped workers in a restaurant is $7.50 v. Connecticut, which is $5.78. That is the base salary and then servers receive tips. In more upscale establishments, due to tipping, servers make around $30-$35 per hour or more. The more fine dining the restaurant, the larger the bills and the more the server will be tipped.
However, diners and restaurant owners worry that if the tipping system is taken away, then service will decrease significantly. And if restaurant owners add a “service charge” onto the bill instead, it could cause performance problems. In fact, the Washington Post reports:
Would a mandatory service charge result in a decline in the quality of service? Research shows that, in restaurants with conventional tipping systems, tips don’t necessarily motivate waiters to perform better. But when compared [with] Miami Beach restaurants that have service charges against those with conventional tips, research indicated that customers perceived the former to have worse service than the latter. That’s because merely the notion of a link between tipping and service is enough to influence servers’ and customers’ perceptions.
So what is a restaurant owner to do? Many owners are testing out larger base salaries for tipped employees and seeing how it goes. In some instances, it has worked well, and in others, it has not. It seems to depend on the individual restaurant, the staff, and the customers. If you’re a restaurant owner who wants to eliminate tipping, perhaps it’s best to get a sense from your customers. You could blog about the idea and see what your customers think, but be honest and include that there will be a service charge and an increase on food prices.
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This blog was inspired by an article from Washington Post