Joe’s Crab Shack Tried Getting Rid of Tips. It Didn’t Last Long
The day may come when you won’t have to figure out what 15 percent to 20 percent of your check is at the end of a meal, but the earliest experiments in eliminating tipping at American restaurants have proved to be less than conclusive.
In one closely watched case, Joe’s Crab Shack has decided to revert to accepting tips at most of its trial locations, six months after announcing that it would become the nation’s first major restaurant chain to test a no-tipping policy at 18 locations.
The casual seafood chain, which is based in Houston and has more than 130 restaurants nationwide, raised its menu prices at the test sites and said it gave higher, fixed wages to its staff. At the time, Ray Blanchette, then the chief executive of its parent company, Ignite Restaurant Group, called tipping “an antiquated model.”
But Bob Merritt, the new chief executive, announced in a conference call with investors and analysts last week that the company was cutting back the experiment and that it would continue at just four restaurants, according to Nation’s Restaurant News.
Company research had found that 60 percent of the restaurants’ customers disliked the change in tipping, Mr. Merritt said. They wanted to inspire good service with their tips and they didn’t trust management to pass on the money to its employees, he said.
North End Grill in New York is one restaurant to switch to a no-tipping system. Credit Liz Barclay for The New York Times.
“The system has to change at some point, but our customers and staff spoke very loudly,” Mr. Merritt said. “And a lot of them voted with their feet.”
The number of customers at the no-tip locations dropped 8 percent to 10 percent on average, he said.
Joe’s Crab Shack is not the only restaurant returning to tips. Fedora, a Greenwich Village restaurant owned by Gabriel Stulman, announced Monday that it would also discard its no-tipping policy, which it had begun four months ago.
“While we made the determination that a gratuity-free system does not work for our business at this time, we continue to believe that it has the potential to change hospitality for the better,” Mr. Stulman wrote in a letter to diners. “We hope it’s the future for more restaurants, including our own.”
Servers, who can be paid salaries below minimum wage, rely on tips to make up the difference. Their take-home pay can be unpredictable, subject to how busy the restaurant is and what customers order. Opponents of tipping say ending the practice would ensure living wages for servers while eliminating a pesky math problem and an often uncomfortable experience for customers.
While tipping remains far and away the status quo in American restaurants, a trickle of restaurateurs in recent years has begun doing away with the practice. Notably, the Union Square Hospitality Group, owned by Danny Meyer, announced plans last year to eliminate tips at its 13 restaurants, which employ 1,800 workers.
The company rolled out the policy at three New York locations: the Modern at the Museum of Modern Art in November, Maialino in February and North End Grill in April.