Randomly, and for the first time ever, both restaurant meals this weekend were at places that have adopted a Hospitality Included no tipping policy. No separate line item already filled in with a tip, just the items ordered and the final price. I didn’t pay too much attention to the menu prices or wine prices but nothing seems out of control. First place we had 2 bottles, second place we had 3 and those are the items that really add up to the bill and can cause some anxiety in the tipping department. I’m usually very lazy and somewhat tipsy when that time comes, so i rarely even look at the bill and just add 20% - but man sometimes that number can get a little crazy and you start thinking about an extra $30 here or there.
Not anymore. I have zero interest in every tipping again and will go out of my way to support restaurants that have rejected this antiquated model.
I don’t know where the restaurant was but the absence of a tip line on the receipt is common in some countries because the restaurant keeps tips “off the books”. You leave the tip for the server in cash. It does not go on your credit card.
If this a restaurant in the U.S. the restaurant is making up the difference by charging higher prices otherwise their staff will leave and go elsewhere. You can’t have both no tipping and underpaid staff and be successful.
I agree but I still struggle with not tipping. It is so engrained. Went to a 3 star in Italy. No line to add tip on credit card receipt and I had no cash. I felt like I had to sneak out of the restaurant.
I know. It’s SO hard to find restaurants in L.A. that still have tips.
I can’t think of a single restaurant that I go to in L.A. that has done away with gratuity. We’re less into the European model here than on the East Coast, and unfortunately we have quite variant service quality.
I can think of a few places that auto 18%, but a few of those make that “optional”. There are more places that have a benefits surcharge of 3-4% but still have tipping.
The NY Times had a very interesting, detailed piece this week on the problems the “hospitality included” policy has created. It answers some of the questions that came up here.
This has much larger financial consequences than you’d realize at first:
The restaurants knew from the outset that they couldn’t boost prices 20% to cover the increased labor charges, so they didn’t. (At some, they did not increase prices on wine by the glass and bar snacks because those shape customers’ impressions the most immediately.) The upshot is that revenue is off at places like Danny Meyer’s restaurants. The upshot of that is that costs had to be trimmed, and in some cases staff, and some lower-priced menu items were added.
The change was made in large part to equalize compensation between the front room and the kitchen, which hadn’t shared in tips. (It turns out that in NY state, by law, tips can only be pooled for front room staff!) Experienced bar tenders and servers have now left for other places where they can make more via tips than in no-tip establishments.
Between the increase in minimum wage in New York and sharing of the new hospitality revenue, front-room wages have risen from $5 an hour to $30 an hour at The Modern.
The restaurants’ taxes have gone up substantially because the hospitality charge is included in their revenue, while employees previously paid the tax on tips. (The story doesn’t mention this, but by building the tips into wages, the restaurants will also be paying much higher employers’ tax contributions to social security and Medicare. Based on those hourly figures for The Modern, the employer taxes would have risen six-fold. I guess this would be partly offset because these can be subtracted from revenue when calculating the businesses’ income tax.)
So if this doesn’t catch on, it’s easy to see why.
Yes, I was being sarcastic, or at least responding in kind to the idea that one has to leave L.A. to find places with the old-school tip. It’s just a little silly to be told by a New Yorker what the restaurant climate in L.A is. Besha’s article isn’t exactly brimming with examples.
I am not saying that the idea is a terrible one, or that anyone is wrong for liking it, but I do know how common or uncommon it is in my own backyard.
We’re ten months past the post and the idea is barely gaining traction. Some of the places that tried it have actually reverted. Where it is done, it’s more by the will of the establishment than the will of diners. If 20% love it and 20% hate it, that’s not a win for the restaurant. The 20% that love it would likely dine there regardless. A part of the 20% that hate it are disinclined to go. I understand the pressure of increased minimum wages, but that does not necessarily mean that a variable tip need disappear. I also believe that when the tip is included via a service charge or in prices, then there’s additional 10% sales tax added on top.
Reading that article, I wondered how much of the impetus for Meyer and other restauranteurs in New York is the state law barring the pooling of tips with the kitchen staff. Where tips can be shared with the chefs, there may be no reason to make the shift.
Definitely true as to one of the main driving forces John. Even as one not really in favor of zero tipping, I understand the need to address the disparity between front and back of the house. I think the barring of tip sharing is a dumb law. Even with the understanding that proprietors have tried to take advantage in the past.
Why would anyone hate the idea of doing away with tipping? I’ve never heard one person express a preference for tipping (who wasn’t a server). I completely understand why switching would be costly to an owner though.