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Tiptoeing towards no tipping: restaurants and customers debate

In a classic scene from the 1990's sitcom 3rd Rock from the Sun, Dick Solomon, the alien-disguised-as-human played by John Lithgow, tries to put a new spin on the art of tipping. He goes to a restaurant with a wad of dollar bills that he places on the table.

"This pile of dollar bills represents your potential tip," he explains to the baffled waitress. "Every time you please me, you’ll see the pile grow. However, if I am unsatisfied—if you are slow, mouthy, or sneeze in your hands—you’ll notice the pile shrinking."

As the meal goes on, the famously finicky Dick arbitrarily begins removing dollar bills from the pile for the server's slightest offenses. He even docks the poor woman a dollar for telling him the kitchen is out of monkfish. ("YOU DON'T EVEN LIKE MONKFISH!" screams Dick's exasperated dinner companion.)

The tipping power trip

In a real-life bar or restaurant, the power to tip is one we often wield like a monarch's scepter. We can choose to be the benevolent emperor, generously rewarding good service with the largesse of a drunk professional athlete on a Las Vegas club crawl. Or we can reduce or eliminate the tip entirely, ‘striking with great vengeance and furious anger’ at the server who was rude or charged us for the salmon steak when we ordered a beef slider.

If you're one of those who enjoys the tipping power trip, be warned: there are some who want your reign to end.

If you're one of those who enjoys the tipping power trip, be warned: there are some who want your reign to end.

Already the norm in Europe, no-tipping policies—where restaurants include tips in their menu prices so they can pay their workers higher wages—have become the U.S. restaurant industry's rage du jour, thanks in part to lingering concerns over income inequality and the push for living wages.

National chain Joe's Crab Shack began testing a no-tipping policy at some of its restaurants last fall. Restaurateur Danny Meyer announced his Union Square Hospitality Group—which includes such famous New York City spots as The Modern, Gramercy Tavern and Union Square Cafe—will eliminate tipping at all 13 of its New York restaurants by the end of this year.

Why we tip

These no-tipping restaurants hope to reduce the pay gap between servers who work for tips and other restaurant employees who do not. The median hourly wage for U.S. restaurant cooks is about $10, according to the Bureau of Labor Statistics. For servers, that wage drops to $9. But, according to the National Restaurant Association, when you add tips to the equation, that median hourly pay shoots up to $16 for entry-level servers and $22 for experienced servers.

"Unfortunately, many of our colleagues—our cooks, reservationists, and dishwashers to name a few—aren’t able to share in our guests’ generosity, even though their contributions are just as vital to the outcome of your experience at one of our restaurants," Meyer wrote in a statement announcing the new no-tipping policy. "We will now have the ability to compensate all of our employees equitably, competitively, and professionally."

Those big changes have some speculating that the no-tipping craze has reached its tipping point.

Or has it? A recent survey from Horizon Media found 81 percent of adult restaurant-goers "are not yet ready to welcome built in tipping" (younger diners were found to be more open to the idea). More than half of those respondents said they believe it should be up to them to decide how much to pay for service.

"I think on a non-tangible, philosophical level, people don't feel as in control because they don't have that tip at the end of a meal to use as a carrot or stick," says Johnny Livesay, co-founder of The Black Star Co-op Pub and Brewery in Austin, Texas. Black Star, which is owned by 3,000 member-owners, has had a no-tipping policy since it opened in 2010.

"I think [no-tipping policies] can be challenging for people who are in the mindset of, 'They didn't give me [good] service so I'm not going to tip them,'" Livesay says. "They really try to hold that over people's heads."

The server’s side of the story

No-tipping policies also can be a tough sell with servers who don't want to give up their tips in exchange for fixed, although higher, wages. The owner of San Francisco restaurants Bar Agricole and Trou Normand told a local newspaper he lost so many servers during a 10-month no-tipping experiment, he brought the tips back.

For restaurants thinking of going to a no-tipping policy, Livesay suggests educating everyone, customers and servers alike, on the benefits. For customers, such a policy greatly simplifies the bill-paying process. Because prices on the menu are exactly what you end up paying (not counting tax, of course), figuring out how much you're going to spend on the meal is that much easier.

For restaurants thinking of going to a no-tipping policy, Livesay suggests educating everyone, customers and servers alike, on the benefits.

"Once people are used to our method, they love it," says Livesay, "because you know what you're paying."

As for servers, not only do such policies grant them a guaranteed living wage, they remove the risk that factors outside the servers' control will affect their hard-earned income. Livesay recalls one restaurant where he worked for tips. "If it rained, nobody came to the restaurant," he recalls. "So if you're trying to pay your rent and it rains, that sucks."

The tipping debate continues

Yet, no-tipping policies can be a hard sell; even at The Black Star, customers sometimes insist on leaving tips ("We just donate those to charity," says Livesay). And such policies can pose a potentially dangerous pricing dilemma for restaurants: raise menu prices too high, you'll lose customers; if you don't raise them enough, you'll lose your servers to restaurants that do allow tipping.

But as more Americans are exposed to no-tipping policies via establishments like Black Star, Joe's Crab Shack, and Meyer's restaurants, the policies won't be so alien. And for those tip-addicted customers unwilling to relinquish their near-godlike power of the purse, don't worry: you can still leave Yelp reviews.

Sid Lipsey is a freelance writer who currently makes his home in Los Angeles. A travel, entertainment and pop culture junkie, Sid is a former producer for CNN and contributing editor for Yahoo Travel. Find him on Twitter: @SidLipsey