If you're a foodie who was excited as some restaurants eliminated the need to tip servers, you might want to curb your enthusiasm: Many eateries are now calling it quits on their trial run of a "no-tipping policy."
The idea behind a no-tipping policy was to correct pay disparity between employees like servers who receive tips and those who don't, such as dishwashers and cooks. To account for the difference, some restaurants decided to do away with tipping, increase wages, and raise menu prices, NPR reported.
Joe's Crab Shack, the first large U.S. chain to implement a no-tip model, announced this month that it's scaling back on the experiment, which lasted just three months. It found that 60% of customers disliked the new policy, and that pilot restaurants lost between 8% and 60% of diners during the trial, CNN Money reported. However, it plans to keep the model in 4 of its restaurants where the policy is successful, in order to study why it's working.
San Francisco restaurateur Thad Vogler also eliminated tipping in his two restaurants Bar Agricole and Trou Mormand, but found the policy too difficult to maintain due to high turnover rate among servers.
"We were continuing to hire young, new people, train them and then they'd get the set of skills necessary, and they would generally give notice and move to other restaurants in our community who were still on a traditional tip economy," Vogler said.
After moving back to a tipping model, the staff at Vogler's restaurants was "delighted," he said. However, he said he and fellow restaurateurs wonder how they'll be able to adjust compensation policies to reflect "expensive" mandates like the rising minimum wage.
Some restaurants, however, will still keep the no-tipping policy. Danny Meyer, chief founder of Union Square Hospitality and Shake Shack, was one of the initial pioneers of the movement when he eliminated tipping and raised wages at 13 of his restaurants in October 2015. As a result, Meyer hiked menu prices by 21% to 25%, and customers now pay almost 10% more than they previously did for a full meal including tip.