More Restaurants Are Ditching Tips. Could This Be A Rapidly Growing Trend?

No Tipping Wait Staff

The newest trend is America is ditching tips at restaurants. But it’s not customers that are ditching the policy, it’s the restaurants themselves.

High profile restaurants joining the trend include Per Se in New York; Berkeley, California’s Chez Panisse; Bar Marco in Pittsburgh, and Alinea in Chicago.

Fox Business points to the restaurants of the Union Square Hospitality Group in New York City, including the Gramercy Tavern, Union Square Café, and Blue Smoke, which will be transitioning to a tip-free environment with the first restaurants converting in November.

The premise is simple. Restaurants increase the prices on their menu to cover a regular hourly wage for their wait staff. At the end of their shifts servers no longer have to be worried about giving part of their tips to other members of the staff, and they don’t have to worry about customers walking away without leaving a tip.

For customer’s there is full transparency in what they will pay based on menu prices.

The 30 Most Important Twitter Influencers in Business for 2020

On a positive note for the wait staff, they are no longer penalized if food is undercooked or wait times are long because of a backed up kitchen.

A recently study found that 46% of restaurant visitors are tipping less than they did five years ago and many tip below the standard 15% tip suggestion.

At the heart of the issue is that members of the wait staff earn far less than a standard minimum wage but then make up the extra cash through tips. If they work a slow shift they can easily earn less than the current federal minimum wage of $7.25.

Restaurants that are removing tipping from their locations promise to strike a balance between increased prices and a positive customer experience.

Written by Lane Hanson

Lane Hanson

Lane Hanson is BusinessPundit's Economy Editor. He reports on major changes in the US and Global Economies.