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[Dalek]

Joe’s Crab Shack Tried Getting Rid of Tips. It Didn’t Last Long.

The day may come when you won’t have to figure out what 15 percent to 20 percent of your check is at the end of a meal, but the earliest experiments in eliminating tipping at American restaurants have proved to be less than conclusive.

In one closely watched case, Joe’s Crab Shack has decided to revert to accepting tips at most of its trial locations, six months after announcing that it would become the nation’s first major restaurant chain to test a no-tipping policy at 18 locations.

The casual seafood chain, which is based in Houston and has more than 130 restaurants nationwide, raised its menu prices at the test sites and said it gave higher, fixed wages to its staff. At the time, Ray Blanchette, then the chief executive of its parent company, Ignite Restaurant Group, called tipping “an antiquated model.”

But Bob Merritt, the new chief executive, announced in a conference call with investors and analysts last week that the company was cutting back the experiment and that it would continue at just four restaurants, according to Nation’s Restaurant News.

Company research had found that 60 percent of the restaurants’ customers disliked the change in tipping, Mr. Merritt said. They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said.

“The system has to change at some point, but our customers and staff spoke very loudly,” Mr. Merritt said. “And a lot of them voted with their feet.”

The number of customers at the no-tip locations dropped 8 percent to 10 percent on average, he said.

Joe’s Crab Shack is not the only restaurant returning to tips. Fedora, a Greenwich Village restaurant owned by Gabriel Stulman, announced Monday that it would also discard its no-tipping policy, which it had begun four months ago.

“While we made the determination that a gratuity-free system does not work for our business at this time, we continue to believe that it has the potential to change hospitality for the better,” Mr. Stulman wrote in a letter to diners. “We hope it’s the future for more restaurants, including our own.”

Servers, who can be paid salaries below minimum wage, rely on tips to make up the difference. Their take-home pay can be unpredictable, subject to how busy the restaurant is and what customers order. Opponents of tipping say ending the practice would ensure living wages for servers while eliminating a pesky math problem and an often uncomfortable experience for customers.

While tipping remains far and away the status quo in American restaurants, a trickle of restaurateurs in recent years has begun doing away with the practice. Notably, the Union Square Hospitality Group, owned by Danny Meyer, announced plans last year to eliminate tips at its 13 restaurants, which employ 1,800 workers.

The company rolled out the policy at three New York locations: the Modern at the Museum of Modern Art in November, Maialino in February and North End Grill in April. The company plans to reopen Union Square Cafe this year with no tipping.

Mr. Meyer has indicated that the change has been an initial success. He told the Freakonomics podcast that the past December was the most profitable month the Modern has had. He said some of that result might be because of media coverage of the no-tipping policy, but he was confident it would extend to the other locations.

“All of our leaders in all of our restaurants are actually clamoring to be next,” Mr. Meyer said. “They all want to do this, because they’ve seen some pretty compelling statistics.”

Tip me 20% if old.

 

[Jarmel]

god damn it

People trying to pretend it's about quality of service when it's more about being cheapskates.

 

[fuzzyset]

I wonder what the tipping point will be for this movement. I wish service was similar to the way it's done in Hong Kong (possibly other Asian nations). There's a wait staff. You don't get 'a waiter'. You just call over any one any time you need something and it gets done. So much better. No one to pester you and you never have to look for 'your waiter'. And no tipping.

 

[zeemumu]

Just the tip?

 

[AJLma]

"They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

Haha.

 

[balladofwindfishes]

Fedora, a Greenwich Village restaurant owned by Gabriel Stulman, announced Monday that it would also discard its no-tipping policy

I was thinking of something witty to say for this line, but I have nothing.

m'lady

 

[Guevara]

Tipping allows me to pretend to be a petty baron;

Will I throw some meager coins to the servant class, or will I stiff them. Up to ME! Hah. Hah. HAAAH.

 

[clav]

"They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

Haha.

What a ridiculous leap in logic.

Why would anyone claim the old method was fair?

People who never worked at those positions.

 

[captive]

"They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

Haha.

how, exactly, is that any different with tips? If i leave the wait staff a 20% tip on my credit card, im counting on the management to take that and give it to the person that waited my table.

 

[A Link to the Past]

What a weird issue. Consumers want to essentially hold wait staff's wages hostage (good wages anyway) unless they perform a good job, but then expresses concerns that a non-tipping system where wait staff gets paid normal wages could hurt the wait staff.

 

[Jonm1010]

"They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

Haha.

Fair point actually. I would be curious what that so called higher fixed wage even was.

Putting a greedy corporate middle man between your wage is more then likely going to lead to some fuckery eventually. Truly doubt Joe's Crab Shack would be bumping wages up every time cost inflation affects the menu.

Which is one of the nice things about tipped employees. There is a natural buffer against inflation.

 

[ReAxion]

People who wanna say it's about inspiring good service are gross. Like deciding 5% of a check one way or the other determines if you get pissed on or your shoes shined.

 

[Amory]

"Company research had found that 60 percent of the restaurants’ customers disliked the change in tipping, Mr. Merritt said. They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

yeah I call bullshit. betting this "experiment" was just costing them "too much"

 

[NandoGip]

Sometimes I wish I could be a server again. Young adults/teens don't know how good they have it. You can evade taxes so easily, and if you work at a popular restaurant, you can actually make a living.

If I applied to work at a restaurant and they told me I would be paid hourly, not only would I half ass it if I took it, but I would probably pass on the job.

 

[Jonm1010]

how, exactly, is that any different with tips? If i leave the wait staff a 20% tip on my credit card, im counting on the management to take that and give it to the person that waited my table.

In most states it is illegal to skim tips off an employee.

Never seen it as an issue personally except in a few rare cases where class actions were filed later at a shady owner that basically stole money.

 

[The Jackdog]

you know something is wrong with the country when this failed not because its a bad idea, but because people never trust the little guy to not get fucked over by management

 

[God Dayumm]

Even if prices rise to pay the server wages I will still tip to inspire good service. Tip over tip

 

[ColdPizza]

Tipping allows me to pretend to be a petty baron;

Will I throw some meager coins to the servant class, or will I stiff them. Up to ME! Hah. Hah. HAAAH.

lol, that reminded me of this....

https://youtu.be/oKLA4K5WyZE?t=53

 

[aeolist]

what's the clientele at joe's? i'm guessing old people who don't like change

 

[NYCmetsfan]

In most states it is illegal to skim tips off an employee.

Never seen it as an issue personally except in a few rare cases where class actions were filed later at a shady owner that basically stole money.

As someone who worked for a union that occasionally worked with restaurant workers it happens all the time. There's also mandatory tip pooling (often illegal) which can be manipulated and isn't transparent

 

[Sky Chief]

Tipping is so fucked and it needs to go away

 

[Hazmat]

I think it's always worth noting that the majority of Americans have no problem with tipping. Internet discussions get shifted heavily in the anti-tipping direction by Europeans and others from non-tipping cultures who think that their opinion matters in this.

 

[Skellig Gra]

Revolution is over. Let's try again in 20 years.

 

[The Jackdog]

i remember when i worked at a restaurant if you got an order wrong the money came out of your tips.

ahhhhhhh tipping is great isnt it?!

 

[ViciousDS]

god damn it

People trying to pretend it's about quality of service when it's more about being cheapskates.

hmmmmmm


We tip 25% at restaurants.....I probably would save money without tips lol

 

[Darryl]

Tipping allows me to pretend to be a petty baron;

Will I throw some meager coins to the servant class, or will I stiff them. Up to ME! Hah. Hah. HAAAH.

lol.

no tipping is more something newer, modern restaurants should push for.

places like a crab shack shouldn't try to change their ways. their demographics have to be older, and old people don't want change. I bet it makes them uncomfortable

 

[Crosseyes]

Gaf always has the heated tip discussions but I guess you forget that overall you're getting a unique tiny American perspective along with international ones. When it comes down to it a lot of Americans that wouldn't know what Gaf is would just like to say, "meh, I didn't care for the restaraunt. I now can at least make that server's life worse since they deserve it." All about what people 'deserve' when the bottom rung of that is dying in a gutter with no money.

 

[J-Rod]

I like rewarding good servers, because they are not all the same.

 

[VariantX]

"They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

Haha.

People must think that the wait staff immediately pockets the tip money or something.

 

[Hazmat]

what's the clientele at joe's? i'm guessing old people who don't like change

It's a casual seafood chain restaurant. I haven't been to one in well over a decade, but I'd say it pulls about the same clientele as a TGI Fridays (maybe slightly more expensive, some seafood is just more expensive than a burger or chicken).

 

[Bilix]

I think it's fair that people would be a little dubious about employees being compensated fairly in a restaurant that's already been established suddenly getting rid of tips, especially a chain restaurant. You're probably more likely to push a change on a brand new, non-chain restaurant.

 

[TheMan]

Tipping is ingrained culturally at this point. It will only go away if multiple large chains do away with tips and stand their ground. The problem of course is that many restaurants wouldn't play along, would thus have lower prices, and cheapskates would flock to them.

 

[Glass Shark]

Good ol' American self-righteousness wins again.

Tips are an antiquity. Let's get rid of them.

 

[Shanlei91]

The issue is probably because the fixed additional wage gets taxed where as a cash tip is money under the table. So if you charge customers 20% more and give staff that equal amount, the staff is getting less. At least that's why I think my Thai delivery guy hates me when I tip through Seamless.com instead of handing cash.

 

[Jonm1010]

As someone who worked for a union that occasionally worked with restaurant workers it happens all the time. There's also mandatory tip pooling (often illegal) which can be manipulated and isn't transparent

Maybe where you live but I have served and bartended in 3 different states and have a lot of friends throughout the industry. My latter job through college saw me working at an interior design company who had two clients that combined owned a very large market share of restaurants in New Orleans and Baton Rouge.

I have seen it as an issue ONCE. From some shady trust fund babies that ran a franchise into the ground and were stealing tip-out money and manipulating labor hours of employees.

Ether way, if a company is willing to steal from tipped employees, they likely are going to be just as willing to manipulate hours and such in a non-tipped environment.

 

[diffusionx]

Tipping allows me to pretend to be a petty baron;

Will I throw some meager coins to the servant class, or will I stiff them. Up to ME! Hah. Hah. HAAAH.

This is it, IMO. Especially at a place like Joe's Crab Shack. Can't eliminate tipping at Applebee's either.

Eliminating tipping currently works at medium-to-high end restaurants in cities that foodies go. That's about it.

 

[entremet]

This is it, IMO. Especially at a place like Joe's Crab Shack. Can't eliminate tipping at Applebee's either.

Eliminating tipping currently works at medium-to-high end restaurants in cities that foodies go. That's about it.

Nailed it.

 

[Man God]

The ones who want tipping the most: Wait Staff.
The ones who tipping helps the least: The Consumer.

I should know, I made a killing waiting tables in college. Better wages than my first two jobs out of school. I've also had much harder jobs in the kitchen, namely dishwashing and prep cook, both which paid far less and were more integral to the operation of the establishment.

 

[Ripenen]

This won't be an issue soon when food service workers are replaced by robotic conveyance devices. Some experts are saying that will happen by as soon as 2020.

 

[NotoriousPUG]

People must think that the wait staff immediately pockets the tip money or something.

In many places they do.

 

[entremet]

I like rewarding good servers, because they are not all the same.

Why? Why should it be your job and not the employer's like almost every other job?

How do you reward a cook for a good meal?

 

[Hellwarden]

I wonder how waiters feel about getting rid of tipping?

Do they feel tipping is outdated?

 

[NoblesseOblige]

Elimination of tipping has to come through legislation. It's really the only viable way I see to solve this issue. I applaud businesses who try to do it themselves, but people are cheap and uncommitted.

 

[vainglorious]

Funny that this is coming out of New York which has one of the worst tipping rates across the country.

https://www.simple.com/blog/simple-insights-lets-talk-tipping

 

[Yaboosh]

People must think that the wait staff immediately pockets the tip money or something.

A server at the end of a shift knows how much money they should be getting in tips. So they know if they are getting shorted.

How does a server know that 100% of the 20% surcharge the restaurant is charging in lieu of tips is going towards their salary?

 

[tkscz]

Tipping is ingrained culturally at this point. It will only go away if multiple large chains do away with tips and stand their ground. The problem of course is that many restaurants wouldn't play along, would thus have lower prices, and cheapskates would flock to them.

They are cheapskates until they pay their servers extra money. Honestly I'm with them, even if they got rid of tipping and started paying them actual minimum wage, I'd still tip them if they did a good job. They deserve that extra cash, their job is not an easy one. Also, I know a few people who work as restaurant servers and say they get more money from tips than most fast food restaurant servers get from hourly wages.

 

[RS4-]

They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said

My concern is the latter bit; of course YMMV, but for all the years I've been eating out, I've encountered a shitty worker that didn't deserve a tip less than a handful of times.

So yeah, I sort of understand what patrons are saying. But I think staff should get paid more, and tipping should be gone.

 

[LJ11]

As someone who worked for a union that occasionally worked with restaurant workers it happens all the time. There's also mandatory tip pooling (often illegal) which can be manipulated and isn't transparent

Tip pooling can be a mess, especially since most higher end restaurants require it, and states allow employers to utilize this method. It's extremely fucking easy to "pollute" the pool, NY isn't as strict but we're not talking about really big differences between states. When the big boys get sued it's usually some manager diving into the pool unknowingly or even knowingly. Still think it's the reason most of these higher end restaurants consider dumping tips, they just don't want to end up in court because it's easy to dirty the pool.

One of my clients recently switched to no tipping, he still gives his waiters bonuses at the end of the week. Prices were increased across the board by 18%-22%. They talked about wanting to give the back of the house pay increases, no increases two months in...LOL. And the front of the house is earning less, back of the envelope numbers - wait staff was down $85-$125 per week, small sample though. And he loses the FICA tip credit tax break. Seems to me that some owners are scared of being sued, and think the waiters are making way too much. Some of the guys/gals bring in great fucking money for the hours worked.

 

[Bubba T]

I always thought it was dumb that tipping is a thing in restaurants but not in other similar industries where people work just as hard to provide a service.

 

[AndyD]

"They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said."

Haha.

I can certainly see this happening. Unless it's industry wide, hard to fully trust they are doing the right thing.