Tipping is Broken

"Back in the day” the only staff though entitled to tips were full-service restaurant servers universally known to make $2.13/hour. The risk/reward for giving your best effort it what got us into this business as kids 20 years ago. 15% was a great tip; 20% bragging rights. Even then, countless studies show that almost all tips are determined by a customer’s values, cultural norms, socioeconomic background, or simply their mood. That’s been an open secret for years, and so many of us feel we have to tip regardless of the experience lest the server might not make ends meet. Sounds like a subtle guilt trip, doesn’t it?

In recent years we’ve seen “tip creep,” a phenomenon where businesses prompt you to tip for mundane transactions, services that were normally expected without tip, or employees assumed to already be making a honest wage. Adding to the confusion is technology’s disruption into foodservice, putting much of the service experience back on the customer.

QR code ordering is the most obvious example, but what about having a screen shoved in your face and being forced to choose 22% (amazing), 27% (life changing) or no tip (I’m a horrible person)… all BEFORE you’ve received your order or any service at all? That’s extortion.

Liberating and empowering technology may be, it’s also chipped away at the fundamentals of hospitality that once warranted a tip. Now a consumer has the burden of determining an employee’s wage, expectation for service, and customary expectations just to grab a bite. What do I tip on takeout? What about a food truck?

Maybe you’re thinking, “why don’t you just pay your staff more and charge more? Or maybe, “why am I still reading this incredibly long explanation on service charge?”

Because most people are good people; they want to tip and know their money is going to the staff. If we bake it into our prices folks will pay too much by tipping twice. Because unless every other business on the block increases their prices and does the same thing, we’ll look more expensive at first glance. Because this model still engages our staff with the excitement of a busy shift and selling our menu. Because by making the service charge automatic, we can ethically and legally share some of those profits with our hardworking kitchen staff.

So just like the rest of the world except the United States, if you loved your experience here at Industry then feel free to leave an extra buck for tip. If you hated it, we’ll discount or comp your bill. We’re not trying to force anything on you. We’re trying to help you relax and not worry about the complex economics of the service economy. We’re trying to show our staff they are our top priority which we hope will in turn benefit you. We don’t always achieve this, but that is our goal.

Sincerely,

Harlan Scott – founder and owner, Industry