3 ms·

If you think about it, it is economically rational behavior for a barista/bartender to do this for regular customers. After all, she gives you a drink that is f

by BobbyH 16y ago

If you think about it, it is economically rational behavior for a barista/bartender to do this for regular customers. After all, she gives you a drink that is free to her and gets back real money as a tip. The only loser is the coffee shop or bar, who has trouble tracking the number of drinks served. My friend runs a bar and this is a huge problem for him that he calls a "bribe back". The only solution he found is hiring good people, as monitoring the bartenders makes him look like he doesn't trust or respect them.

illumin8 16y ago
Yeah, this is a huge problem. I was on a business trip once and eating dinner at the bar of TGIFridays. I normally wouldn't eat at a chain restaurant like that, but I was in Virginia and there was nothing nearby. In any case, these college kids were sitting at the bar next to me, and we started talking. They seemed to be friends with the bartender and one of the told me "give the bartender a $20 and you'll drink all night for free." This was a Friday and I was stuck in VA for the weekend, with my hotel across the street so I was like, OK. Anyway, I slipped the bartender a $20, and he proceeded to make all kinds of drinks for us. He was using the top shelf liquor, not the well drink stuff, and he was making all kinds of custom martinis, shots, etc. We literally finished well over $200 worth of drinks in the space of a few hours. When the check arrived, it only had my meal on there, and all the drinks were missing. Essentially, the bartenders gave us about $200 worth of drinks and we only paid for our meals, plus $20 each in tips (there were 4 of us). If I owned that TGIFridays somewhere in VA, I'd be seriously worried about how much money my bartenders were stealing from me. It is literally stealing when a bartender can make an extra $100-200 a night just by slipping free drinks to his friends. I guess the markup is so much on alcohol that most people wouldn't notice.
- swolchok 16y ago
  There are companies that audit bartenders by very carefully inventorying the liquor. I found out from this article in my college's newspaper: http://www.michigandaily.com/content/2008-09-24/bar-audits-mean-fewer-free-drinks http://www.michigandaily.com/content/2008-09-24/bar-audits-m... . The company is Bevinco (www.bevinco.com), and I'm sure there are others.
  - mordero 16y ago
    Yeah, I remember watching a video in an accounting class about internal controls of a bar in Texas which would weigh bottles every night and dispensed drinks through a soda gun. Found another example of companies using some audits to keep track of liquor usage. [http://findarticles.com/p/articles/mi_m3190/is_43_40/ai_n26708635/ http://findarticles.com/p/articles/mi_m3190/is_43_40/ai_n267...]
- edge17 16y ago
  I definitely know about some bartenders at a similar establishment that lost their jobs for that type of behavior. The bartender's basically stealing from the establishment.
dandelany 16y ago
Yes, it's economically rational for the barista/bartender, but it's not necessarily bad business for the bar/coffeeshop either. If the bartender is smart about when and how often she hands out these freebies, she can convert one-time or occasional customers into loyal, regular customers, which is much better for the bar in the long run. It reminds me of the Apple store - 9 times out of 10, if you go in there with something broken that's out of warranty, you have to pay the full price to repair it. However, Apple geniuses are given a little bit of leeway, and often offer "unnecessary" free out-of-warrany replacements that, while costly to Apple in the short-term, generally pay handsome returns in the long run by encouraging loyalty.
- BobbyH 16y ago
  Yeah, I agree. What I was trying to articulate is that this is a good example of a principal/agent problem, as the Principal (owner) has interests that differ from those of his Agent. Solutions to this generally either decrease information asymmetry or involve a better incentive system for the Agent. However, as you point out, it's possible that the Agent will act in his interest and still benefit the Principal. Wow, I just looked and this exact example is actually featured on the Wikipedia page for Principle-agent problem. http://en.wikipedia.org/wiki/Principal-agent_problem#Employment_contract http://en.wikipedia.org/wiki/Principal-agent_problem#Employm...
- whatusername 16y ago
  My wife took her dropped/broken iPhone into the apple store. She's too honest and didn't realise when the genius was asking her if it was broken/having issues before she dropped it that he was wanting to put it through under warranty.
- philwelch 16y ago
  Fun story--I had a dropped/dented PowerBook once that I never got fixed because it was my fault, but it had another issue due to a manufacturing fault that I did send it in for. They sent it back with apparently a brand new, undented case.
jamesbritt 16y ago
'My friend runs a bar and this is a huge problem for him that he calls a "bribe back". The only solution he found is hiring good people, as monitoring the bartenders makes him look like he doesn't trust or respect them.' Back in my bar-hopping days I learned about buy-backs. I was surprised the first time it happened, but it was explained that this was common thing (at least if you drink enough). Given that it was apparently common knowledge in the bar culture, I'd have to believe that anyone running a bar knows this is happening and either makes some educated guesses on the amount, or simply has the bartenders do some tracking. It seems like just part of doing business and sales, nothing underhanded. Broadly speaking, it seems a businesses will have trouble keeping customers if the owner or manage does not give the line people authority (within some bounds) to give stuff away. I've mainly seen this in the hotel business. You can keep a customer, and make them want to come back, by smoothing over a complaint with a comp'ed night or free meal, and the win to the hotel is terrific (it's expensive to get new customers vs. keeping them). But if the restaurant manager or front desk staff has to first get the OK from the head of F&B or the Front Office manager it tends to just not happen because people are afraid they'll get in trouble for doing what is arguably right and in the long-term interest of the business.
blhack 16y ago
I hope your friend also understands how much this will get people like me to come back. There is a bar in Phoenix that I used to go to all the time (when the weather calms down, I'll start going again [because I bike there]). One of the major reasons that I went back so often, is because I felt like a regular there. It was a very common occurrence for the bartenders to offer me a free drink. A lot of these free drinks were beer that had been poured wrong, or stuff that they would have had to pour down the drain, but not all of them. This is something I think a lot of people don't understand (not saying your friend, just in general); when you own a business, you're not selling widgets, you're selling customer service. I wasn't going to the bar to buy beer, I was going because one of the bartenders looked at me one night (I was feeling down about something) and said "Dude, what's wrong?" and tried to cheer me up...or another night when another bartender didn't charge me the $10 that they usually charge for growlers (a glass chug that holds 1 gallon of beer and is for transporting it home [common at breweries that don't bottle their beer])... All in all, that place has probably given me 10 beers for free; at most $20 worth of product. But that $20 has probably come back to them 10-100 fold in the last couple of years. I'd say about half of my family's birthdays now take place at that bar, (I've taken my sisters and my mom there, they all love it, it really really is truly unlike any other restaurant I've been to in Phoenix), as well as most of my friends. I've recommended it to literally hundreds of people. Contrast this with a bar in Tempe where I took a visiting friend for drinks: the bartender didn't want to talk to us and, when we asked him why he was using a jigger to measure the mixed drink that my friend ordered (it was taking a long time and we said something to the effect of "We really don't care about the measurements being that exact") he explained how close of an eye the managers keep on the alcohol shrinkage. Another story for me is dell: when I call dell, I talk to Lisa, who remembers my name, remembers where I live (Phoenix) and remembers the time that her and her husband came here to visit...and how nice the weather was. "Is that place on scottsdale road that sells the ice cream still there?" Artificial as I'm sure all of this is (Lisa probably has a computer that remembers this stuff for her), I like it. I like going into a coffee shop and feeling like the owner of the shop is a friend of mine and I'm just coming over to his house to hang out (there was a coffee shop in Des Moines, IA; 3 years after I moved away, I came back to have to have the owner greet me with "RYAN!?! Where the hell have you been!? Has the band been on tour or something? [the first time I went into his shop I had a DW drums tshirt on. The joke from then on was that I was a famous drummer]). I think it's important for business owners to remember this type of thing: you're absolutely not selling coffee, or beer, or dell computers, you're selling me a little temporary friend that makes me feel like they really and truly care about whatever problem I am coming to them to solve.

by BobbyH 16y ago

illumin8 16y ago

Yeah, this is a huge problem. I was on a business trip once and eating dinner at the bar of TGIFridays. I normally wouldn't eat at a chain restaurant like that, but I was in Virginia and there was nothing nearby. In any case, these college kids were sitting at the bar next to me, and we started talking. They seemed to be friends with the bartender and one of the told me "give the bartender a $20 and you'll drink all night for free." This was a Friday and I was stuck in VA for the weekend, with my hotel across the street so I was like, OK. Anyway, I slipped the bartender a $20, and he proceeded to make all kinds of drinks for us. He was using the top shelf liquor, not the well drink stuff, and he was making all kinds of custom martinis, shots, etc. We literally finished well over $200 worth of drinks in the space of a few hours. When the check arrived, it only had my meal on there, and all the drinks were missing. Essentially, the bartenders gave us about $200 worth of drinks and we only paid for our meals, plus $20 each in tips (there were 4 of us). If I owned that TGIFridays somewhere in VA, I'd be seriously worried about how much money my bartenders were stealing from me. It is literally stealing when a bartender can make an extra $100-200 a night just by slipping free drinks to his friends. I guess the markup is so much on alcohol that most people wouldn't notice.

swolchok 16y ago
There are companies that audit bartenders by very carefully inventorying the liquor. I found out from this article in my college's newspaper: http://www.michigandaily.com/content/2008-09-24/bar-audits-mean-fewer-free-drinks http://www.michigandaily.com/content/2008-09-24/bar-audits-m... . The company is Bevinco (www.bevinco.com), and I'm sure there are others.
- mordero 16y ago
  Yeah, I remember watching a video in an accounting class about internal controls of a bar in Texas which would weigh bottles every night and dispensed drinks through a soda gun. Found another example of companies using some audits to keep track of liquor usage. [http://findarticles.com/p/articles/mi_m3190/is_43_40/ai_n26708635/ http://findarticles.com/p/articles/mi_m3190/is_43_40/ai_n267...]
edge17 16y ago
I definitely know about some bartenders at a similar establishment that lost their jobs for that type of behavior. The bartender's basically stealing from the establishment.

dandelany 16y ago

Yes, it's economically rational for the barista/bartender, but it's not necessarily bad business for the bar/coffeeshop either. If the bartender is smart about when and how often she hands out these freebies, she can convert one-time or occasional customers into loyal, regular customers, which is much better for the bar in the long run. It reminds me of the Apple store - 9 times out of 10, if you go in there with something broken that's out of warranty, you have to pay the full price to repair it. However, Apple geniuses are given a little bit of leeway, and often offer "unnecessary" free out-of-warrany replacements that, while costly to Apple in the short-term, generally pay handsome returns in the long run by encouraging loyalty.

BobbyH 16y ago
Yeah, I agree. What I was trying to articulate is that this is a good example of a principal/agent problem, as the Principal (owner) has interests that differ from those of his Agent. Solutions to this generally either decrease information asymmetry or involve a better incentive system for the Agent. However, as you point out, it's possible that the Agent will act in his interest and still benefit the Principal. Wow, I just looked and this exact example is actually featured on the Wikipedia page for Principle-agent problem. http://en.wikipedia.org/wiki/Principal-agent_problem#Employment_contract http://en.wikipedia.org/wiki/Principal-agent_problem#Employm...
whatusername 16y ago
My wife took her dropped/broken iPhone into the apple store. She's too honest and didn't realise when the genius was asking her if it was broken/having issues before she dropped it that he was wanting to put it through under warranty.
philwelch 16y ago
Fun story--I had a dropped/dented PowerBook once that I never got fixed because it was my fault, but it had another issue due to a manufacturing fault that I did send it in for. They sent it back with apparently a brand new, undented case.

jamesbritt 16y ago

'My friend runs a bar and this is a huge problem for him that he calls a "bribe back". The only solution he found is hiring good people, as monitoring the bartenders makes him look like he doesn't trust or respect them.' Back in my bar-hopping days I learned about buy-backs. I was surprised the first time it happened, but it was explained that this was common thing (at least if you drink enough). Given that it was apparently common knowledge in the bar culture, I'd have to believe that anyone running a bar knows this is happening and either makes some educated guesses on the amount, or simply has the bartenders do some tracking. It seems like just part of doing business and sales, nothing underhanded. Broadly speaking, it seems a businesses will have trouble keeping customers if the owner or manage does not give the line people authority (within some bounds) to give stuff away. I've mainly seen this in the hotel business. You can keep a customer, and make them want to come back, by smoothing over a complaint with a comp'ed night or free meal, and the win to the hotel is terrific (it's expensive to get new customers vs. keeping them). But if the restaurant manager or front desk staff has to first get the OK from the head of F&B or the Front Office manager it tends to just not happen because people are afraid they'll get in trouble for doing what is arguably right and in the long-term interest of the business.

blhack 16y ago

I hope your friend also understands how much this will get people like me to come back. There is a bar in Phoenix that I used to go to all the time (when the weather calms down, I'll start going again [because I bike there]). One of the major reasons that I went back so often, is because I felt like a regular there. It was a very common occurrence for the bartenders to offer me a free drink. A lot of these free drinks were beer that had been poured wrong, or stuff that they would have had to pour down the drain, but not all of them. This is something I think a lot of people don't understand (not saying your friend, just in general); when you own a business, you're not selling widgets, you're selling customer service. I wasn't going to the bar to buy beer, I was going because one of the bartenders looked at me one night (I was feeling down about something) and said "Dude, what's wrong?" and tried to cheer me up...or another night when another bartender didn't charge me the $10 that they usually charge for growlers (a glass chug that holds 1 gallon of beer and is for transporting it home [common at breweries that don't bottle their beer])... All in all, that place has probably given me 10 beers for free; at most $20 worth of product. But that $20 has probably come back to them 10-100 fold in the last couple of years. I'd say about half of my family's birthdays now take place at that bar, (I've taken my sisters and my mom there, they all love it, it really really is truly unlike any other restaurant I've been to in Phoenix), as well as most of my friends. I've recommended it to literally hundreds of people. Contrast this with a bar in Tempe where I took a visiting friend for drinks: the bartender didn't want to talk to us and, when we asked him why he was using a jigger to measure the mixed drink that my friend ordered (it was taking a long time and we said something to the effect of "We really don't care about the measurements being that exact") he explained how close of an eye the managers keep on the alcohol shrinkage. Another story for me is dell: when I call dell, I talk to Lisa, who remembers my name, remembers where I live (Phoenix) and remembers the time that her and her husband came here to visit...and how nice the weather was. "Is that place on scottsdale road that sells the ice cream still there?" Artificial as I'm sure all of this is (Lisa probably has a computer that remembers this stuff for her), I like it. I like going into a coffee shop and feeling like the owner of the shop is a friend of mine and I'm just coming over to his house to hang out (there was a coffee shop in Des Moines, IA; 3 years after I moved away, I came back to have to have the owner greet me with "RYAN!?! Where the hell have you been!? Has the band been on tour or something? [the first time I went into his shop I had a DW drums tshirt on. The joke from then on was that I was a famous drummer]). I think it's important for business owners to remember this type of thing: you're absolutely not selling coffee, or beer, or dell computers, you're selling me a little temporary friend that makes me feel like they really and truly care about whatever problem I am coming to them to solve.