How timely that this thread would pop up at the same time I've been enjoying this series of blog posts from restaurateur Jay Porter. In it, he describes the results of his multi-year experiment in which he owned two establishments in San Diego; one where he used the traditional tipping model, and one where he paid his staff a living wage and had a strictly enforced "no tips" policy, instead opting for an 18% service charge. In these blog posts, he clearly outlines why the tipping system doesn't work and how -- contrary to popular belief -- it actually provides an economic incentive for servers to provide
worse customer service (a given waiter/waitress will take home more money at the end of the night if he/she handles a greater number of tables, thus reducing the amount of attention devoted to any one table).
The series is really fascinating and should be read by anyone before commenting in this thread.
Link to part 1:
http://jayporter.com/dispatches/obse...rt-1-overview/