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TO TIP OR NOT TO TIP?

Posted on January 17 2018

To tip or not to tip? That is the question for many restaurateurs as some of their colleagues, like Joe’s Crab Shack and Shake Shack, have made moves to ban tipping in their establishments. Instead of paying servers and bartenders the minimum serving wage of $2.13, with the expectation that most of their money earned would come from tips, these owners have boosted the pay rate to $15 an hour. To make up for the new cost of their front-of-house employees, some restaurants have implemented a slight price increase on their menus, or clever “administrative fee” to guests’ bills. While this new business model may work well for some restaurants, it may not be ideal for others. So the big question remains, should your restaurant get rid of tipping?

SAY GOODBYE TO TIPPING!

Besides the fact that tipping is an outdated notion to the rest of the world, it can create a further divide between your front- and back-of-house employees. For example, on an average night in your restaurant, a bartender or server could walk away with upwards of $70 after working a five-hour shift. However, even if you’re paying your cooks, dishwashers, and other back-of-house employees $10 an hour, it would take them more time to earn the same amount of money as their front-of-house co-workers, even though they’re doing the same amount of work.

Adding a consistent pay rate for your servers and bartenders can also help decrease your turnover rates. Since the tipping percentage varies from guest to guest, the amount that your front-of-house employees can expect to make during a shift can fluctuate, especially during slower times. Not to mention, they would never have to worry about the dreaded bad tippers. With an hourly pay rate, your employees can rely on steady stream of income, which might make them more likely to continue working for you.

KEEP THE CHANGE!

While not tipping may be a part of the culture of many countries around the globe, it doesn’t mean that your restaurant or bar needs to follow suit. In fact, some restaurants have had a hard time keeping servers after making the switch to a higher hourly wage. Many servers and bartenders who have spent years working in the restaurant world have become accustomed to leaving each shift with cash in their pockets, and they aren’t ready to give that up.

Taking tips away may cause confusion among your guests, as well. Leaving a tip behind is a common way for guests to say “thank you” to your wait staff or bartenders. Without this, some patrons can feel as if they’re not properly thanking your employees for the service they provided them. Some people also believe that tipping the employees of a restaurant forms an emotional connection. Instead of just giving their money to a “faceless company,” guests are directly supporting hardworking employees.

While paying front-of-house employees hourly may be beneficial to some businesses, others may have a hard time getting their employees and guests to adjust. So, to tip or not to tip? It’s up to you to decide.

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