The Linkery Goes Tipless

I’m happy to announce that, starting Thursday, 16 November 2006, The Linkery will be a “no tipping” restaurant. Undoubtedly this will generate a lot of questions. So, without further ado, our “TIP-FREE RESTAURANT Q&A“.

How will this work?

We’ve decided to join the rest of American retail business and charge a set amount for our products and services. We now include the cost of table service for dining-in guests on each check at 18%. And we do not accept tips.

This enables us to serve you with a more professional, team-oriented environment, and to maintain our quality of cuisine while keeping our prices neighborhood friendly.

If you’d like to express extra gratitude at the end of your meal, leave some cash to be donated to our charity of the month.

Why are you doing this?

Changing from tips to a service charge helps us provide you the best and most consistent food, beverage and service possible.

Providing table service costs money; like any sensible business, we simply charge for things we do that incur costs. As long as we do a good job, it’s a good deal for everyone. At the same time, we don’t take tips, because we don’t expect any more than what we charge, and we don’t want to be bribed to do our jobs.
We no longer work to get tips from our guests, we instead work to provide both excellent food and professional service, because that is our business.

This also helps us become a better restuarant because revenue from billing for service can be split among everyone who works here (which isn’t allowed with tips). It’s us living the truth that everybody at the Linkery is fully responsible for the quality of your experience, and that we all work together to give you the best food, drink and service we can.

Lastly, this change also has the benefit that every guest pays a set price for our products and services, which brings us in line with the vast majority of US retail businesses, except, perhaps, car dealerships and guitar stores.

I thought tips are my payment to the server, not for you to distribute amongst your staff.

Tips are an extra amount paid by guests which covers the cost of table service (which is why tipping is not customarily required for to-go or counter service). Although individual guests may tip differently, the overall tips in a restaurant are very stable as a percentage of sales.

While the cost of table service is borne, at least in part, by everyone at the restaurant, tips by law cannot be distributed among the whole staff. Many restaurants adapt to this circumstance by raising their prices enough to cover the remaining table service costs. Another option is to replace tipping with a set fee for table service and allocate that revenue fairly. That’s what we’re choosing to do.

Does any other sit-down restaurant do this?

After a fair amount of Googling, I could find only two other restaurants in the U.S. that have replaced tipping with a service line item. One is The French Laundry and the other is Chez Panisse. Admittedly, we don’t want to limit ourselves by aspiring to be only as good as those two places, but it’s respectable company.

Seriously, seeing that Thomas Keller and Alice Waters have taken this course suggests to us that perhaps it helps a restaurant be excellent. Given our goal of developing a world-class neighborhood restaurant, we’ll follow.

UPDATE (15 Nov): add to the list Charlie Trotter’s in Chicago, Per Se in New York, and Moosewood in Ithica, New York.

But aren’t tips my way to insure that I get prompt service?

Actually, it turns out that tips and quality of service are usually very loosely correlated, at most (see “Tip Levels and Service: An Update, Extension and Reconciliation” by Michael Lynn of Cornell University, 2003, and “Incentives and Service Quality in the Restaurant Industry: The Tipping – Service Puzzle”, by Ofer H. Azar of Ben-Gurion University, 2007). People generally just tip what they tip. It’s a pretty unusual occasion where quality of service affects the amount of the tip much.

Interestingly, however, female servers drawing smiley faces on the check has been shown to increase tips by 18% (Rind & Bordia 1996).

What if my service is bad – why should I have to pay 18% in that case?

As with anything we do here, food or service, we ask that you bring to our attention any errors that affect the quality of your experience. We’ll do our best to correct them, and, when appropriate, adjust the bill accordingly.

I don’t tip 18%. I tip 15%. Why should I suddenly have to tip more?

The best thing is, at the Linkery you don’t tip at all.

Really, guest tips cover the cost of table service and, as a whole, they’re pretty predictable. For everyone who tips only 15%, there’s someone who always tips 20% or more. Our method just incorporates this payment into the check, and makes it the same for everyone. We think that’s really fair.

This is all great for your restaurant, but how does this benefit me?

Two ways:

1. It’s a more efficient way of running our restaurant. Running our restaurant efficiently means that we will be better able to provide great food and great service at a moderate cost. In other words, we won’t have to raise our prices to cover inefficiencies in our operation. That’s good for everyone.

2. This will eliminate a troublesome system where members of our service teamhas a financial incentive to disrupt the restaurant’s operation, and adversely impact the quality of our work. How does this occur? Here’s a theoretical example. Let’s say a person comes in when we’re super busy, places an order for a steak, and asks that it be done as quickly as possible. The server, believing that her compensation will reflect how well she accomplishes this task, will try to make this happen. Of course, during the rush, there’s a good chance that if the kitchen attempts to accommodate this request and rearrange its work flow, this will mean that several tables’ food will not come out on time or as good. It would be in the best interest of the guests in general for the server to decline to honor the request. Under the new system, where any individual tip is not essential, it will be easier for servers to make the decision to honor the majority of guests rather than any specific one.

Tips motivate good service. Doesn’t this mean that your service won’t be as good?

Maybe at first. This is new ground for all of us, so there are bound to be some challenges. Some of us may discover that this kind of system isn’t a good fit, so we may have some new people or people in new roles. That’s all pretty normal stuff that comes along with change and improvement.

Ultimately, though, we’ll be able to provide better service that would be possible with the old system. Because everyone’s interests are now aligned – yours, the service staff, the kitchen staff, and the restaurant as a business – we will all be able to work as a team to give you a great dining experience at a moderate price.

What if my service is great? I’d like to reward that.

Most importantly, giving great service is its own reward.

But if you’d like to recognize us, the best thing is to let everyone know – both in the restaurant and out. Tell your friends, post it on your website, or wear a sandwich board at work that says “The Linkery Rocks!”

If a particular person or people is doing a great job, tell us. Tell the bartender, or send an email to Jay, or post it in the comments in our blog. We’ll all get to hear about it, and we’ll appreciate the great work of our colleagues.

Also, we encourage guests who want to express gratitude to leave a little extra cash behind, which we’ll donate to our charity of the month. The current month’s charity is always listed on the bottom of the menu.

Is there a service charge for to-go orders?

No, the charge is for table or bar service only. Our food does taste better right off the grill, so we encourage you to eat here when possible. Plus, it’s fun.

I know that while you pretend to be a nice, honest person, you are actually a evil mastermind bent on world domination through misinformation and subterfuge. What’s your hidden agenda?

You caught me. And I would have gotten away with it too, if it wasn’t for these meddling kids.

Hey, there’s a whole field of study as to how servers can increase their tips by doing such things as touching guests on the shoulder, or predicting that the next day’s weather will be sunny. Check out Mega Tips from Cornell University.

We don’t want to be in the business of figuring out how to get you to give us a few percentage points more in tips. We want to be in the business of giving you great food and beverages at a moderate price, of bringing you closer to the people who make your food, and in providing a great community. By eliminating the tipping transaction, we’re making another step in that direction.

Now I’m going back to my volcanic lair.

UPDATE (15 Nov): I found several interesting articles on-line about this subject:

  • This installment of Ask a Waiter provides the most thoughtful and detailed analysis of the subject I’ve read. I disagree with the writer on one point: he argues that tipping (as opposed to service charge or including service in item prices) financially benefits the restaurant owner at the expense of employee relations. My experience is that tipping and service charge are basically financially neutral to the owner, but that tipping both fosters disincentives to teamwork and creates operational inefficiencies which have to be made up with higher prices or poorer execution. I like the proposal of this article that the cost of service be included in the cost of each item, I can definitely see us moving there eventually.
  • The New York Times provides a pretty accurate overview of the state of tipping.
  • Here’s an article from the Chicago Tribune explaining why eliminating tipping won’t work at restaurants such as ours, even though “the idea has merit”.
  • Finally, a blogger’s well-written reaction to the Chicago Tribune article above.

(Edited 19 November: minor changes to the first couple paragraphs to clarify that we are charging for table service for dining guests.)

(Update 18 December: Thanks everyone for discussing this with us the last month, it really helped us focus our goals and be the best restaurant we can. I’m closing comments now so we don’t build up spam and trolls at the end of the discussion thread, but if you have questions or concerns about this topic please email me directly and I’ll address them personally.)