Does America’s Tipping System in Restaurants Still Work?

 In Bar & Restaurant Operations, Customer Service

There is mixed sentiment, depending on who you ask, about whether or not North America’s tipping system should be replaced with a standard service charge.

Some believe that both consumers and service professionals would be happier with the European standard, fixed service charge system. In this New York Times opinion piece, “Serves Us Right,” Op-Ed Contributor Phoebe Damrosch, writes that abolishing the tipping system helps take the server’s focus away from the pressure of upselling customers with expensive bottles of wine and add-ons to increase the bill to focusing on delivering the best possible customer experience.

A recent Business Insider article also poses several reasons for doing away with gratuity. One of the viewpoints shared in the article is from Brian Palmer at Slate who believes tipping is actually bad for consumers.

He writes: Servers know there’s a higher chance they’ll get a bigger tip on a bigger check, so they may push for more expensive items on the menu. Or they may not want to serve customers from certain ethnic backgrounds stereotyped for being lousy tippers. Or they may rush customers out quickly to make room for new diners (and more tips!). Basically, they may adjust accordingly to serve only the people they think will be the best tippers.

In the same Business Insider article, Canadian restaurateur-turned-professor Bruce McAdams says that he believes the “relationship between tipping behavior and quality of service is very insignificant.”

In fact, one restaurant in New York City, Sushi Yasuda, has decided to take the less traveled path of replacing gratuities with a European-style standard service charge. The reason, according to one of the restaurant’s owners, Scott Rosenberg, is because “in Japan, that’s how it’s done. We thought, ‘How great would it be when you go to a restaurant not to have to think about the tip?’”

But then there are others who are still champions of the traditional tipping system. They feel that gratuity is a reward for providing diners with great service and an incentive to do so. It also gives customers choice over how much they tip based on the level of service they receive. In a free market system, gratuity is in line with the philosophy of earning more for working harder and playing in active role in helping their restaurant increase sales at the table.

In a recent article posted on TODAY/NBC News, Should American restaurants abolish tipping?, Mike Lynn, a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration, says that by removing the tip system, you run the risk of taking away good service, and it also makes diners feel like they are obligated to do something, which nobody likes.

If after reading this blog post, you are reconsidering whether or not to reform your bar or restaurant’s gratuity system, a good place to start is to ask your servers what they think. After all, ultimately it’s about their livelihood and keeping your customers happy.

Do you have an opinion on this issue? We would love to hear what you think!

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