In recent years, changes in the restaurant industry have sparked some debate over tipping in restaurants. The question is: Is it better to switch to a no-tipping policy and add a “service charge” increase menu prices, or is it better to continue tipping? Here are some of the arguments on each side of the debate.
No-Tipping Policy Pros
- Customers would still pay the same amount. When restaurants raise menu prices or add a fee to cover service, customers basically still pay the same amount. It’s just determined up front for the customer and the server.
- All servers would receive the same pay. Most people think tipping in restaurants is based on the quality of service received, but that is often not true. Cornell professor Michael Lynn, an expert on tipping and consumer behavior, has done extensive research that shows, among other things, that female wait staff is more likely to make better tips if they have blonde hair or shapely figures. Other studies have shown that behaviors such as wearing red or touching the customer’s arm can increase tips. A no-tipping policy would make your servers’ pay the same across the board.
- Service fees could also benefit other employees. Your back-of-house employees including sous-chefs, line cooks, and dishwashers also contribute to great dining experiences, but rarely receive tips. Some restaurants that have instituted a no-tipping policy equitably split the added service fee among all workers equitably.
No-Tipping Policy Cons
- Quality of service may decline. The main argument in favor of continued tipping in restaurants is the belief that without it, customer service will decline. Wait staff could have less incentive to provide an outstanding experience if their hourly rate is guaranteed.
- Servers actually could earn less. With tips, some servers (in mid- to high-end restaurants) can make as much as $20 to $40 an hour. The move to a no-tipping policy could cause a high rate of turnover as top-quality servers leave for better-paying pursuits, and employers could end up with more training costs for new hires who are less efficient.
- Restaurants have had varying degrees of success. Although a no-tipping policy has had great success in some parts of the U.S. such as New York City restaurants that have experimented with no-tipping policies in other regions have had only limited success. Stay tuned as evaluation and research into successful no-tipping policies reveal what makes them work.
It’s Your Call
Your business is unique, and the decision to switch to a no-tipping policy or to maintain a traditional model is up to you. The pros and cons listed here look at the issue in general — it’s important to consider your particular staff, your customers, and the culture of your region. And make sure you don’t ignore the financial considerations of making a change. Use data collected from your POS system as well as from other sources to make an intelligent decision.
To learn more about how your POS system can provide you with data to help manage your restaurant, contact Leebro POS today.