No-tipping policy failed, and now restaurants are switching back


The birth of tipping

Urban legend has it that “Tip” may be an acronym for “To Insure Promptitude,” a phrase reportedly carved into a bowl at a coffee house frequented by English writer Samuel Johnson.

Tipping is a European import, one which found its roots in Tudor England and withstood years of passionate opposition when it reached the United States to become an assumed custom of everyday life.

“By the 17th century, it was expected that overnight guests to private homes would provide sums of money, known as vails, to the host’s servants,” according to Paul Wachter’s 2008 NYT piece on the matter. “Soon after, customers began tipping in London coffeehouses and other commercial establishments.”

The death and rebirth of tipping

The obvious problem with tipping is that it allows customers, to an extent, to dictate the salaries of waitstaff. The bigger problem, though, is actually the wage disparity that tipping creates between front and back-of-house staff. Even at high-profile spots in New York, it’s common for cooks to make $35,000 or less, while waitstaff can sometimes clear $80,000, $90,000, or even $100,000 a year.

Danny Meyer is the CEO of Union Square Hospitality Group, which includes several upscale New York restaurants, including Union Square Cafe, Gramercy Tavern, Blue Smoke, Jazz Standard, The Modern, and North End Grill. He is also the founder of Shake Shack.

Last fall, he became the highest-profile restauranteur to date to throw his weight behind the no-tipping movement. It has reportedly worked well for his spots, in part because when visiting a high-end restaurant, a bump in prices won’t necessarily send guests running for the door, but it hasn’t gone to plan for most.

Other high-end restaurants, like Fedora in the West Village, have chosen to ditch the experiment after it angered customers and didn’t do much to help the staff.

Joe’s Crab Shack announced last week that they will be eliminating the no-tip model after experimenting with it for just a few months. The seafood chain was the first major chain restaurant in the US to try doing away with tips, and was experimenting with the new “hospitality included” model in 18 restaurants, 14 of which will quickly go back to the old model.

“Our customers and staff spoke very loudly and a lot of them voted with their feet,” Bob Merritt, CEO of Ignite Restaurant Group, which owns Joe’s Crab Shack, told analysts on the company’s first-quarter earnings call.

Will tipping survive the future?

Even the restauranteurs switching back to the traditional tipping model seem to believe that eventually it will be replaced by something more fair and sensible. It may only work at high-end restaurants that properly communicate the change. The first wave of non-tip restaurants has been launched, and many of them are now running back to shore. We’ll just have to wait and see what comes next.

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