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Pros & Cons: No-Tipping Policy

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If you’ve had the chance to dine anywhere else in the world besides Canada and the United States, you probably noticed that tipping is not required. While a no-tipping policy works abroad, and tipping is standard in most of North America, operators in the United States are seriously considering the idea of switching to a no-tipping policy. While the no-tipping movement gained a lot of support in the mid-2010s, it eventually lost traction due to the fact that restaurants that require tipping outperform restaurants that do not. Due to the pandemic, the entire restaurant industry took a massive financial blow and is exploring other business policies, which includes no tipping. To determine whether tipping is right for your establishment, read to learn about the pros and cons of a no-tipping policy.

Pros Of A No-Tipping Policy

Unbiased Wages For Employees

Tipping can depend on the prejudiced opinion of your customers. Luckily, with a no-tipping policy, you ensure that all of your servers get the wage they deserve regardless of race, religion, or gender. Remember, not every customer has the same opinion about tipping. The amount each customer tips varies and it is not guaranteed that your server will receive a fair tip. By eliminating tipping altogether, your servers will be paid based on the wage they agreed to and experience.

Equal Pay

It’s no secret that there is a great inequality between the income of back-of-house workers and front-of-house workers. For years, operators have been looking for a way to close the gap within both groups mainly because the back of the house has arguably the toughest job in a restaurant. Back-of-the-house employees have to work in hot conditions for long hours and they can make as little as a third of the money a server makes. The unbalanced pay gap can be closed with a no-tipping policy that guarantees both groups are paid justly and fairly.

Cons Of A No-Tipping Policy

Raised Prices

In order to pay everyone on staff a fair wage, restaurants will have to raise the prices on their menu or add a service charge. Raised prices can lead customers to order less food or visit an establishment less frequently. Although adding a pre-calculated tip to an order would not make much of a difference in the overall amount, the raised prices take away the feeling of value customers experience when ordering a meal. Because everyone is accustomed to tipping, customers will misperceive a more expensive dish as a loss of value and will be less prone to spending.

Increase In Staff Turnover

While a no-tipping policy provides employees with a stable living wage, servers will feel a loss in switching over to a no-tipping policy. A gifted server will probably earn more with tips than with a flat salary and might leave to join an establishment where they can earn tips. While paying front-of-house and back-of-house staff a living wage is fairer for everyone, some waiters will prefer receiving tips because it is more beneficial to them. It will also be more difficult to hire waiters for that same reason.

Is Tipping Right For Your Establishment?

Despite learning all the pros and cons, deciding whether to allow a no-tipping policy might still be a hard choice. If you find yourself in this position, try experimenting. Implement a no-tipping policy at your restaurant for a few weeks and see how it goes. During this period, monitor your customers, staff, and financing to see whether this is beneficial to your establishment as a whole. After you have evaluated all of these factors, ask your servers how they felt about having a no-tipping policy. Their feedback and the information you gathered should suffice in making your final decision.

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