Leather Storrs: Why Restaurants Should Get Rid of Tipping
Wednesday, January 28, 2015
The threat of a higher minimum wage has got some restaurants in full panic mode, while others are already moving to solutions that threaten the distinctly American culture of tipping.
These days, “TIPS” (To Insure Prompt Service) are less insurance and more birthright. Most restaurants tack on at least 18% to parties of 6 or more. And the plucky jilted server, chasing their insufficiently grateful customer into the street is a trope, celebrated by Facebook, screenwriters and underdogs alike.
Of course entitlement isn’t news and dealing with customers all day is like a sand paper facial, but this is the real bottom line: If restaurant servers continue to receive the lion’s share of the tip, restaurants will feel the squeeze and cooks will continue to get the shaft.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe best way to make a small fortune in the restaurant business is to start with a large one. Successful restaurants in the pig tattoo and house-made-tonic category return about 8%. Unfortunately, heated competition for both customers and quality cooks raises labor and marketing costs. Higher priced ingredients coupled with a more sophisticated, demanding and allergy riddled customer increase costs as well. Unsurprisingly, three out of four of these shops close within 2 years.
To re-cap: The 8% profit enjoyed by successful, chef driven restaurants is now more like 4%. One has a 25% chance of sticking around for more than two years to enjoy that windfall. On top of that, the minimum wage is going UP. Soon. Someone’s gotta give.
Servers are entitled to their entire gratuity by law. The restaurateur can suggest that they tip out support staff and/or the kitchen, but that’s it. Ask Mario Batali how it goes if you enforce your suggestion. He’ll give you a $5,000,000 answer that includes the delightful phrase “class action lawsuit”.
Here’s a tip: get rid of them. Increase the price of restaurant items by 15%-20% and state it clearly on the menu and the check. Should a customer feel compelled to tip on top for exemplary service, great! That is the property of the server- Nice work Jacob, buy some moustache wax. But now, the restaurant has simplified its accounting, kept more money above board and given itself the ability to make more than a suggestion about equitable distribution…
Don’t get me wrong, talented servers are critical to success. It’s only taken me fifteen years to admit that good service can salvage a bad meal more often than good food can salvage bad service. And the obvious danger is that talented waiters will choose to work in restaurants that have traditional tip programs. Additionally, many customers will bristle at the thought of losing the discretionary ability to reward/punish the service. On the plus though, is the notion that closing the income gap between servers and cooks will encourage harmony and team work between the cats and dogs of the dining room and kitchen. Most important, however, is the fact that without major changes to the current tipping structure, the next big food trend is going to be fine dining… with counter service.
Leather Storrshas served 20 years in professional kitchens. He owns a piece of two restaurants: Noble Rot and Nobleoni, where he yells and waves arms. He quietly admits to having been a newspaper critic in Austin, Texas and Portland, Oregon.
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