Tipping Is Going Away!



There seems to be a growing trend of Restaurants going away from tipping. The days of calculating how much to give a waiter is starting to disappear. There is a lot of good news and also a good bit of bad news with this situation.


The Good News

We first heard of the tipping going away by the Consumerist post on Joe’s Crab Shack getting rid of the tipping.  The Idea is to stop the tipping and instead increase the waiters pay to around $14 (depending on some factors).

On the surface it seems great and honestly I wouldn’t mind making $14 an hour. As a customer this is even better as you don’t have the hidden price of the tip at the end the meal.

Here’s a little tip for anyone wanting to know how to calculate a tip. If the meal is $30.00 then move the decimal place over to the left one place. Now it becomes $3.000, this is 10%. If you double it then it becomes $6.000 or 20%. That is how you calculate a tip quickly.


The Bad News

The bad news is that as a customer you loose power. If the waiter was bad then the tip should be bad. And if the waiter was good then a good tip is needed. Since the Waiter is capped at $14 an hour they could be missing out on some small bonus.

Plus a lot of waitress will be missing out on the ability to take cash home that night. You would have to wait like everyone else for payday.

Plus the real bad part is that the restaurants are going to have to increase there prices. A lot of the stores are going to increase to 15%, which is about what you would spend on a tip anyways.

no tip increase price

So its all looking like a bad idea, except for the people own the restaurants. Charging more for food helps with the store with cash flow. The food joint nows has more cash to float on before having to pay there employees. Plus any extras goes to the Restaurant and not the employee.

The only one really winning is the people who own the business. I fear that many more restaurants will start to do this.

What They Forget

What the restaurants forget is that the Waitress or Waiter is a Salesman. Just like how a salesman makes more money by selling you more costly items so does a waiter. Just like the Salesman the waiter will push items that sell and have high cost just so they can raise the price of the meal which raises the value of there tip.

The waiter doesn’t ask if you want desert for your health. They want you to stay longer and spend more so they make more. When we take out the pressure to sell more the stores will show a loss.

But Stores like Joe’s Crab Shack might not suffer. Seafood places don’t really do the dessert thing because they lack people wanting dessert. Many people go to fish restaurants for the fish and not for the dessert and Joe’s Crab Shack might do good with this idea. Places that sell steaks, burgers, and chicken might not do so well.

It will be interesting to see where this all goes to. Only time will tell.