Restaurant Tipping Habits: Will they change?

Many restaurants have made the move to go “no tipping” in recent months. When Danny Meyer shifted his restaurants to “hospitality included” at the back half of last year, we all could have guessed the trend would catch on industry-wide.

But what we might not have been able to guess is how guests were going to respond.

The Conversation is Two-Sided

When a restaurant chooses to eliminate tipping, they typically do so as a way to incentivize their staff with better pay and benefits - to level the playing field for FOH and BOH. Behind the scenes, however, something else is happening that the guest will see. Turns out that in eliminating tipping and raising wages, many restaurants are adding what they refer to as a “service charge” of upwards of 22% to make up the difference.

This is leading to two different conversations among guests…

  • PRO: "22% is what I would have tipped anyway - no big deal, it’s less work for me now to figure out what amount to tip."

  • CON: "Why should I have to pay a service fee?"

…. and two different conversations among servers:

  • PRO: No tipping policies will increase the moral of FOH and BOH staff

  • CON: No tipping policies may lead to a less than exceptional guest experience

Behind the Scenes of Tipping Habits

All this talk about tipping got us wondering, when did tipping start anyway, and will the habit be easy to break for guests?

In America, tipping actually originated as a way to drive up profits during Prohibition, when law-abiding restaurants (read: not speakeasies) lost one of their highest profit margins - booze. Less profit from alcohol sales meant lower sales per cover and restaurants had to make it for it somehow. Since they couldn’t afford to pay higher wages, tipping was born.

Prior to that, tipping was actually frowned upon...

"In the American democracy to be servile is incompatible with citizenship. Every tip given in the United States is a blow at our experiment in democracy. The custom announces to the world…that we do not believe practically that "all men are created equal.” - William Scott

Now, it’s hard to imagine a time without that blank line on the bottom of your check “Tip _____”. It’s ingrained in consumer behavior quite honestly.

When something is so ingrained in consumer behavior, we can’t help but wonder what the trends are. How can we decide if tipping habits will change, if we don’t know what they are to start with besides that “yes, we tip”.

Tipping: What Do The Best Servers Have In Common?

So we dove into the numbers.

Upserve works with thousands of restaurants every day; we consider ourselves to be in a strong position to both analyze and advise on server performance. And we wanted to know: what do the best servers have in common?

To answer this, we dove into the insights in the Upserve portal – looking at both bars and fine dining restaurants, and comparing the east coast to the west coast.

what do the best servers have in common

To indicate server performance, we pulled the following metrics:

  • Sales per cover

  • Average Turn time

  • Average tip

  • Average tip %

  • Lost sales

 

What we found might not surprise you but it will inspire you.

With an average tip percentage of 30+, this industry may find that while tipping methods change, old habits will die hard.

We took this discussion a step further with a webinar. Find the recording here

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If you would like to learn more about increasing your tips with mobile payments check out Split, an innovative solution that helps restaurants enrich and enhance the customer experience by connecting them to their guests phone.

This is a guest blog from Theresa Navarra of Upserve. Upserve is the only restaurant intelligence platform that connects guests, menu and staff in single place, providing real-time guidance that empowers restaurants to unlock their full potential.