The Restaurant Tip Culture Is Changing

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Tipping your server after a morning, afternoon or evening, of full-service dining is no strange deed in the eyes of your average American. Traditionally, tipping exists as the direct measurement of how guests have perceived their dining experiences and the level of service provided at a restaurant. Makes sense, right? Of course it does because it’s all we’ve ever known in the industry – that is, until now. Recently, New York City restaurateur and Union Hospitality Group CEO Danny Meyer has decided to march to the beat of his own drum and lead the pack to step outside the American comfort zone in attempt to introduce a more European ideal when it comes to tipping; as in the elimination of tips completely. The way Danny sees it and others have agreed, when you tip your server you’ve become the ultimate decision maker on the wages FOH restaurant employees are making. You don’t even think about the dedicated individuals in the BOH washing your dishes to ensure your food is served on a spotless plate; or the chef who has created your mouth-watering chicken parmigiana that you just scarfed down in record time. You certainly don’t take into account how any of the tip money is divided out (if your server keeps it all or if it goes into a tip-pool divided up amongst everyone). So as his entrepreneurial spirit would have it, Danny decided to make the team a cohesive unit and said sayonara to tipping.

In order to oust tips, adjustments are necessary in other areas of the business to stay profitable and keep your team members on board. There are two ways to absorb costs with the elimination of tipping: 1. Increase menu prices and 2. Tack on a service charge. In a perfect world, and a world in which Danny Meyer sees restaurants living in, service becomes seamless while team members work together as a unified front for the greater good of the restaurant… but is that truly what the guest will see over the surged pricing should you choose that route? This new-aged movement isn’t something that American’s are accustomed to, so it’s up to you to make sure they hop on board and see past those increases. You’ve got a major problem if your guest doesn’t understand that hospitality is now incorporated in this pricing. Managers are going to have to get creative in deciding the best course to inform guests of the new tip policy while assuring them service will remain up to par. There’s also the perceived guest VALUE to take into account, from your place with higher prices or surcharge versus regular menu prices and tipping. Let’s say you take a stroll in the mountains with your honey and decide you’d like to treat her to a hot and juicy filet mignon. You see two restaurants that are going to fit the bill; one with a 10oz filet priced at $23, tips welcome, and another with a 10oz  filet priced at $27, no tipping. Off the bat, which do you choose?

It’s also important to note that menu price increases aren’t the only changes that could possibly ruffle some feathers. The role between guest and server is going to take a turn as well; fortunately enough, not everyone will care. There are two types of guests that walk into a restaurant and they’re both looking for entirely different dining experiences. Many guests prefer to be part of the whole restaurant experience, engaging with their server and interacting on a more personal basis, while others simply want their food, good service and their check. That being said, the elimination of tipping may be more difficult for the former types of patrons to adapt to. Since there will be no monetary service rating system anymore, it’s quite possible that guests will be providing more feedback now, however, in other outlets outside of the restaurant to ensure their feelings about the quality of service received, are known.

There’s no avoiding it: a fire is catching and its flames will make a heavy impact on the industry…. how do you foresee the world of no tipping affecting your guests?