Mandatory 16% tip at new Earls 67 locations (Stephen Ave)

[Regorium]

Originally Posted by harmony

Then they can raise the ####ing price and pay their employees accordingly.

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Seriously can one person that thinks like this actually give a good answer for us on the other side? I'm really curious to see where the psychological difference is.

I've answered the other side and explained it several times. Can someone please just tell us why you feel that 16% mandatory tipping is so much different than raising the prices 16% across the board?

[Locke]

Originally Posted by Bean

It is this mechanism that I just don't agree with. The restaurant only needs to report tips from mandatory service charges for their workers. At any place with more than 6 in their party, they'd record and have to report on behalf of the server. It is the majority of tables with fewer than 6 patrons where the server can pocket the money which gets me.

Cash tips aside, I find it frustrating that not all tips that run through the credit/debit machine aren't captured by the employer and reported on behalf of the server. (again with the 'controlled' and 'direct' nomenclature) Just take the grey area away where service industry workers can choose to report earnings.

I see what you're saying and it makes a degree of sense but its sort of an intangible line that people are hesitant to cross that permeates the restaurant industry.

The Restaurant doesnt want to do this because it could be construed as 'selling out' their servers costing them money and further the establishment doesnt want to assume this responsibility because it means that if they screw up they're the ones with issues with CRA.

[FireGilbert]

My two cents having lived in Canada with low minimum wage and tipping then moving to Australia with high minimum wage and no tipping. I am not saying either system is better but there are pros and cons of each:

Tipping: Servers have no idea what their income will be. Depending on how busy their establishment is they could be rolling in the cash or living in poverty. Service is amazing though and I love being asked for my drink order seconds after sitting down. Also, complaints are taken seriously and quickly rectified.

No Tipping: Servers have a guaranteed income they can actually live off. There is an initial shock at how high the prices are but once you realise there is no 15% on top they are quite reasonable. Service is horrible however and it is normal to not receive table service at pubs and mid-range restaurants. Also, complaints are not always taken seriously or are in some cases frowned upon.

[GGG]

Originally Posted by FireGilbert

My two cents having lived in Canada with low minimum wage and tipping then moving to Australia with high minimum wage and no tipping. I am not saying either system is better but there are pros and cons of each:

Tipping: Servers have no idea what their income will be. Depending on how busy their establishment is they could be rolling in the cash or living in poverty. Service is amazing though and I love being asked for my drink order seconds after sitting down. Also, complaints are taken seriously and quickly rectified.

No Tipping: Servers have a guaranteed income they can actually live off. There is an initial shock at how high the prices are but once you realise there is no 15% on top they are quite reasonable. Service is horrible however and it is normal to not receive table service at pubs and mid-range restaurants. Also, complaints are not always taken seriously or are in some cases frowned upon.

Is that cultural or because of the lack of tipping. While working in restaurants my level of service did not change because I was trying to earn a tip.

[FireGilbert]

Originally Posted by GGG

Is that cultural or because of the lack of tipping. While working in restaurants my level of service did not change because I was trying to earn a tip.

It doesn't apply to everyone but in a lot of cases someone who needs tips to survive will provide better service than someone with a guaranteed income.

Another part of it is the high minimum wage. Restaurants can't afford a larger work force so overall service suffers even if individuals are providing good service.

Culture plays a part too. North Americans seem to be okay with complaining if they are not happy while other cultures prefer to keep their mouths shut to avoid embarrassment.

[Dion]

http://calgaryherald.com/news/local-...g-test-project#

[GGG]

Originally Posted by FireGilbert

It doesn't apply to everyone but in a lot of cases someone who needs tips to survive will provide better service than someone with a guaranteed income.

Another part of it is the high minimum wage. Restaurants can't afford a larger work force so overall service suffers even if individuals are providing good service.

Culture plays a part too. North Americans seem to be okay with complaining if they are not happy while other cultures prefer to keep their mouths shut to avoid embarrassment.

But if management wanted good service there would be consequences for not providing good service therefore you would do a good job or the restaurant is poorly run.

I think your probably right about a high minimum wage leading to reduced employees for a given restaurant level.

[Psytic]

Originally Posted by Regorium

Seriously can one person that thinks like this actually give a good answer for us on the other side? I'm really curious to see where the psychological difference is.

I've answered the other side and explained it several times. Can someone please just tell us why you feel that 16% mandatory tipping is so much different than raising the prices 16% across the board?

Well for starters a tip is a reward for good service. It should be determined at the end of the service not before. If its good I might tip 20% if its not I will tip less or not at all. This really takes merit out of the equation.

[monkeyman]

Originally Posted by Regorium

Seriously can one person that thinks like this actually give a good answer for us on the other side? I'm really curious to see where the psychological difference is.

I've answered the other side and explained it several times. Can someone please just tell us why you feel that 16% mandatory tipping is so much different than raising the prices 16% across the board?

While practically, It's the same thing, psychologically it's different. People go into a restaurant and see the cost of an item as $19 plus hospitality charge they might not be too upset but they see the same item as $22.04 it doesn't look as ok. I think it also reduces Earls ability to raise prices later.

I hated this when i first heard it, but it's grown on me. Especially knowing that wait staff will now legally make no less than minimum wage and Earls saying they discourage tipping on top of the 16%.
To be honest though, with the way the economy has been and with costs likely going up significantly more in the next couple of years, I have been and will likely continue to eat out less and less. When i do, I will feel less obligated to tip, at Earls or anywhere else I go.

[V]

If the restaurant just raises their prices you don't know that all of that extra revenue is going to the servers. Maybe they pocket 2% of it. This way you know it's going to the servers. This is better than just raising the prices.

[Aleks]

Originally Posted by sun

Because we are a stupid people and we can't do math. If we look at a menu and see a burger for $17.25 and there is a mandatory 16% tip, we just think the burger is $17.25+tip. If we see a burger is $20 with no tipping allowed, we'll think "that's too expensive, it's $17.25 down the street at Joey's" and go there instead.

Sure, it's the same thing, but $20 appears more expensive and how things appear is how we make our decisions (which is why the burger would actually be $19.99, which is also why I made it $20 in my example).

It would be $19.7 with the trendy pricing on the menu trends

[btimbit]

Originally Posted by Aleks

It would be $19.7 with the trendy pricing on the menu trends

No dollar sign either.

Burger - 15.5

[Aleks]

Originally Posted by btimbit

I guess the only real answer to this is, it could. Historically, people notice higher prices and make a big deal out of it, no matter how small the increase. Only time will tell the difference. Earls is being smart here by introducing it in a new location rather than switching the policy in an existing restaurant, since restaurants like that always have massive, massive sales within the first 3 months. That's what might save them. Be neat to re-visit this topic in a few months to see where it's gotten too.

This whole thing really proves what I (and a few others) have been saying for years. You can't change the tipping system without trying to change an entire part of North American culture. People claim to have wanted the system to go in this direction but now that it is, they hate it.

I don't think it's about changing north American culture in regards to tipping, i think people look elsewhere in the world and gratuities are not commonplace. It's not built into the bill, or the prices, it just doesn't happen. Count me in as one of the people who is "tipped out", when businesses that have NO business adding a tip option on their machines just to ride the wave.....i'm looking at you tutti frutti, i built my froyo, added my toppings, even put it on the scale myself...what am I being asked for a tip for.

[Resolute 14]

Originally Posted by V

If the restaurant just raises their prices you don't know that all of that extra revenue is going to the servers. Maybe they pocket 2% of it. This way you know it's going to the servers. This is better than just raising the prices.

Do you though? Can you trust that the line item the restaurant manager puts on the bill is actually being dispersed among the staff? I would generally trust Earls to do so, but what about Slimy Joe's Crab Shack?

[Hot_Flatus]

Originally Posted by Resolute 14

Do you though? Can you trust that the line item the restaurant manager puts on the bill is actually being dispersed among the staff? I would generally trust Earls to do so, but what about Slimy Joe's Crab Shack?

This is exactly why the tipping system is flawed and out dated now.

I've lived and worked in countries around the world that do not have tipping and there is little to no difference in the level of service received across the board. Sure the average price of a food item might be a bit higher but it evens out once you don't have to lay down the tip at the end of the meal. You also know that the person serving you is not splitting tips with other servers or unworthy management and is generally being compensated more fairly overall with a higher hourly wage.

[Hot_Flatus]

Originally Posted by FireGilbert

It doesn't apply to everyone but in a lot of cases someone who needs tips to survive will provide better service than someone with a guaranteed income.

Another part of it is the high minimum wage. Restaurants can't afford a larger work force so overall service suffers even if individuals are providing good service.

Culture plays a part too. North Americans seem to be okay with complaining if they are not happy while other cultures prefer to keep their mouths shut to avoid embarrassment.

That in itself should be a red flag for society as a whole. You're basically saying it's ok for the service industry to pay their employees laughable wages and provide next no benefits so long as the consumer picks up the slack on their behalf. No one in North America should need tips to survive. If these establishments can't turn a profit while paying employees a wage they can live on, then they shouldn't be in business.

I don't mind tipping servers at all, it's the fact that the people that run these establishments cry the blues when they're getting off essentially paying what is comparable to slave wages in our society.

[nfotiu]

Originally Posted by Resolute 14

Do you though? Can you trust that the line item the restaurant manager puts on the bill is actually being dispersed among the staff? I would generally trust Earls to do so, but what about Slimy Joe's Crab Shack?

I don't think Earl's is claiming to disperse it to the staff. From the OP:

AN ALTERNATIVE TO TIPPING
One of the first policies Earls.67 will be testing is a new compensation model for all staff who work here. Instead of the traditional tipping method, we will be implementing a 16% hospitality charge to all bills. The 16% will be paid to all staff that helped serve and prepare the meal from dishwashers, to chefs, to service staff, in the form of consistent wages.

I read that as giving them a higher base salary and putting the 16% into revenue. IMO, servers making $15-20/hr in tips should not have a $15 minimum wage, or at least tips should count towards that. This system seems like a decent way of moving towards the latter.

[CliffFletcher]

Originally Posted by Hot_Flatus

You're basically saying it's ok for the service industry to pay their employees laughable wages and provide next no benefits so long as the consumer picks up the slack on their behalf.

You realize that when wages for servers are higher, it's the same consumers who are paying more, right? It's not as though running a restaurant in North America is dramatically more profitable than running a restaurant in Australia or the UK. And in countries with a high labour costs and an inflexible labour market, you have fewer restaurants and fewer servers. Check out the youth unemployment rate in a country like France.

[Dan02]

Originally Posted by nfotiu

I don't think Earl's is claiming to disperse it to the staff. From the OP:


I read that as giving them a higher base salary and putting the 16% into revenue. IMO, servers making $15-20/hr in tips should not have a $15 minimum wage, or at least tips should count towards that. This system seems like a decent way of moving towards the latter.

We had a long discussion with a couple servers there last weekend, they said the tip money goes into a pool thats split amoung staff, if you tip your server extra, that money goes in there too.

[GGG]

Originally Posted by Dan02

We had a long discussion with a couple servers there last weekend, they said the tip money goes into a pool thats split amoung staff, if you tip your server extra, that money goes in there too.

What did the servers think of the system?