It also lets the restaurant advertise a lower cost of goods to the customer upfront to get them in the seat and the true cost isn't presented until you're done.

It also lets the restaurant advertise a lower cost of goods to the customer upfront to get them in the seat and the true cost isn't presented until you're done. And that might be why the non-tipping restaurants noticed a drop in revenue. If you look at the menus side-by-side, especially if you are familiar with the place and what things cost there, the non-tipping one will appear to be much more expensive.