4 ms·

Why this Canadian restaurant went from a no-tipping policy back to having tips

12 points by Huhty 9y ago

cbanek 9y ago
I really wish I could look at the books for this place. I get the no-tipping thing, and how the prices have to change based on that. The higher wages will go down to the servers (and probably other non-tip based staff too), and that's good. I wonder if servers were getting paid higher or lower on the new system? Were there more or less customers (probably less, since they stopped doing it), and how did they feel about the price increases? Also, I wonder how much of the income of tips is in cash and off the books. Not getting taxed on a part of your income can really make a big difference. Yes, I know it's probably illegal to not report the tips, but I imagine it's something that happens all the time, especially with cash tips.
- DamnYuppie 9y ago
  Even back when I was waiting tables in college in the 90's most transactions were CC. You had to enter the tip amount as part of your end of shift processes to balance things out. This was recorded by the system and you then had to enter it into the companies system. Essentially everyone only ever claimed the CC tips and nothing more. Yet as more and more transactions move to CC the discrepancy between actuals and declared is MUCH smaller.
  - justinjlynn 9y ago
    And the cut the CC companies take for providing what should essentially just be a distributed database grows even more.
diffeomorphism 9y ago
The article raises some interesting points, but does not consider that there exist countries outside America with different, working, tipping policies: - They completely abolished tipping, which caused social backlash because people are conditioned to tip. While the article qualifies this as "if we get good services, we should tip". As someone who recently moved to the US, that does not seem true in my experience, but rather you tip irrespective of the service quality. In other countries your bill includes a standard tip and then you are free to add an additional, smaller tip, if the service was good. - They had issues communicating the price "increase". Of course, in effect you still pay the same amount, so other than tax avoidance, this is purely a psychological issue. What other places do: List the same prices as before and include a fixed service fee. This can be per table/per person or just a fixed "tip" of, say, 15%. - The waiters were payed less because the prices were not adjusted accordingly. Not a tip/no-tip issue. - salaried employees have more stable working hours and their employer was unwilling to pay for all these hours if demand is low. This of course ignores that on the other hand, they don't have to pay extra during busy hours, but previously this part was payed by the customers.
joeblow9999 9y ago
A lot of restaurants have tried this in my area and gone back to tips. The servers generally hate it (no tips with "living wage") because the restuarants that do this tend to be higher end high-minded hipster spots. And the servers make a LOT of tips there. The "living wage" is actually less for them. You don't see this experiment happening at Denny's.

12 points by Huhty 9y ago

I really wish I could look at the books for this place. I get the no-tipping thing, and how the prices have to change based on that. The higher wages will go down to the servers (and probably other non-tip based staff too), and that's good. I wonder if servers were getting paid higher or lower on the new system? Were there more or less customers (probably less, since they stopped doing it), and how did they feel about the price increases? Also, I wonder how much of the income of tips is in cash and off the books. Not getting taxed on a part of your income can really make a big difference. Yes, I know it's probably illegal to not report the tips, but I imagine it's something that happens all the time, especially with cash tips.

DamnYuppie 9y ago
Even back when I was waiting tables in college in the 90's most transactions were CC. You had to enter the tip amount as part of your end of shift processes to balance things out. This was recorded by the system and you then had to enter it into the companies system. Essentially everyone only ever claimed the CC tips and nothing more. Yet as more and more transactions move to CC the discrepancy between actuals and declared is MUCH smaller.
- justinjlynn 9y ago
  And the cut the CC companies take for providing what should essentially just be a distributed database grows even more.

diffeomorphism 9y ago

The article raises some interesting points, but does not consider that there exist countries outside America with different, working, tipping policies: - They completely abolished tipping, which caused social backlash because people are conditioned to tip. While the article qualifies this as "if we get good services, we should tip". As someone who recently moved to the US, that does not seem true in my experience, but rather you tip irrespective of the service quality. In other countries your bill includes a standard tip and then you are free to add an additional, smaller tip, if the service was good. - They had issues communicating the price "increase". Of course, in effect you still pay the same amount, so other than tax avoidance, this is purely a psychological issue. What other places do: List the same prices as before and include a fixed service fee. This can be per table/per person or just a fixed "tip" of, say, 15%. - The waiters were payed less because the prices were not adjusted accordingly. Not a tip/no-tip issue. - salaried employees have more stable working hours and their employer was unwilling to pay for all these hours if demand is low. This of course ignores that on the other hand, they don't have to pay extra during busy hours, but previously this part was payed by the customers.

joeblow9999 9y ago

A lot of restaurants have tried this in my area and gone back to tips. The servers generally hate it (no tips with "living wage") because the restuarants that do this tend to be higher end high-minded hipster spots. And the servers make a LOT of tips there. The "living wage" is actually less for them. You don't see this experiment happening at Denny's.