Per Se ends tipping in favor of service charge

[FabulousFoodBabe]

Okay -- I'm addicted to Page Six. I feel kind of dirty saying it, but there it is. From today's column --

LET'S hope this trend doesn't catch on. Master chef Thomas Keller's extravagantly priced Co lumbus Circle restaurant Per Se is axing the tip. Starting Sept. 1, customers will no longer get to decide how much of a gratuity to give the waitstaff — instead, a flat fee of 20 percent will automatically be added to each and every bill, regardless of the size of the party, with proceeds to be divided equally among all the restaurant's staff. That's sure to be popular with the busboys, but one insider tells us, "Most of the service staff are planning on quitting at the end of this month when the salary changes happen." The restaurant issued a statement saying the changes were designed "to further the establishment of a unified work culture within the restaurant."

I personally love the idea, and wonder if his cooks will get a cut of this. Anyone else?

[Gifted Gourmet]

eG thread on "pooling tips"... this is a quote from Holly which I found insightful because he had experience with pooling:

From an owner's point pooling took pressure off for balancing the dining room - not just in number of covers, but quality of covers. No need to profile low tippers.

Pooling also was a form of natural selection. Peer pressure. Servers and bus people who didn't pull their weight either changed their slovenly ways or were pushed out.

It was also good for morale. At the end of the evening we'd sit together over a glass of wine - I'd add up the credit card tips, one of the servers would empty out the plastic Halloween pumpkin where cash tips ended up, and we'd count everything out. Good casual conversation, talking about that evening's service and all sorts of other things.

The servers decided what went to the bus person - their call totally. Servers made servers required percentage of minimum wage. Bus people were paid a buck or two an hour over minimum.

Pooling may have worked so well for us because we were a small staff and had good rapport. I suspect there would be a lot of problems with pooling in a restaurant with more servers on the floor.

Holly Moore

[Fat Guy]

Most every restaurant above the level of a diner pools tips. The two interesting features of the Per Se arrangement are 1) the fixed service charge, and 2) the purportedly equal division (most tip pools are divided by shares, with captains getting more than waiters getting more than bussers).

[joiei]

Most every restaurant above the level of a diner pools tips.

←

This is not in my experience.

[jvictor930]

You know, this was a topic of conversation in a Master's degree class I am taking in Service Strageties. If they are saying everyone, hopefully they do mean the cooks and the managers. However, that is not usually the case in any establishment I've run or been involved with that does pooling. If so, the cooks and other staff included in the pooling that aren't service staff will most likely be taking a pay cut to make up for the "sky's the limit" potential of tip share.

The other issue tip share breeds is carrying servers who aren't really up to task getting more than they should and the truly stellar servers getting less than they deserve, all because at the end of the night, it's all evenly split.

I can tell you that on the banquet side, this is very common. Captains get a higher hourly and the staff/bartenders split the gratuities & service charges.

As for the required amount of gratuity. that's a sticky wicket at best. Some people are not going to pay attention and wind up tipping on top of that amount, and some people never return because they feel it is up to the guest to decide how service is compensated, not the establishment. Even at places like (and I hate to use the example, because he's such an egomanicial little bitch) Charlie Trotter's, where servers poolAND recieve a guaranteed wage, it is never required to tip.

I think Page 6 is right, let's hope it doesn't catch on!

[fiftydollars]

This is how things have operated at the French Laundry for quite some time.

[herbacidal]

I'm sure much of what I'm saying has been covered in Melissa's/ Holly's linked thread.

I'd be suprised if every restaurant above the level of a diner pools tips.

I wouldn't be suprised if four and three star equivalent restaurants pooled tips.

But the fixed charge added on to the bill and the equal division among the staff are both very interesting additions.

While there is the possibility that bad servers will get more than they should while good servers get less, I think there also is more pressure from the good servers on the bad servers to pull their own weight. If not successful, then there would be pressure on management to get servers who will carry their fair share. This is what will help create more unity among the waitstaff.

But since non-FOH staff will also receive shares of the gratuities, the wages of all staff should definitely be brought closer to within range of each other, which should reduce Per Se's total monthly wages, I'd imagine.

[Fat Guy]

Let me be more precise: I know of no restaurant above the level of a diner where a server gets to keep all the tips left for him or her by customers. There may be such a restaurant -- my sample size is only about 40 or 50 restaurants in half a dozen states -- but I don't know of one. Either the server puts 100% of tips into a pool, which is allocated by shares (this is pretty much universal at the high end and common at every level -- and becoming more so now that credit card payments are so prevalent); or the server puts some lower percentage (say, half) into a pool for the bussers, bartenders, etc.; or the server is required to share tips with other service staff at specified percentages according to one scheme or another.

[dvs]

Let me be more precise: I know of no restaurant above the level of a diner where a server gets to keep all the tips left for him or her by customers. There may be such a restaurant -- my sample size is only about 40 or 50 restaurants in half a dozen states -- but I don't know of one. Either the server puts 100% of tips into a pool, which is allocated by shares (this is pretty much universal at the high end and common at every level -- and becoming more so now that credit card payments are so prevalent); or the server puts some lower percentage (say, half) into a pool for the bussers, bartenders, etc.; or the server is required to share tips with other service staff at specified percentages according to one scheme or another.

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i've worked in 10 or so restaurants in SF and most recently in yountville and also worked for the restaurant association in SF w/ 500+ member restaurants. maybe 10% of the restaurants "pooled" tips. the restaurants that don't pool, have a "tip out" where servers have to tip out the busser, bar, host etc. a certain percentage of what their take is for the night.

in fact, when the minimum wage was to increase in SF about 90 restaurants wanted to have their staff start pooling tips (adding a service charge to a check then makes those "tips" property of the restaurant that they can divy up as they see fit), this didn't go over well & not many adopted the pooling method of tipping out.

Edited August 8, 2005 by dvs (log)

[*Deborah*]

I balk at the automatic gratuity, no matter the percentage. It offends me. It's like another tax. I do understand it with large parties (especially large parties with split checks), but it's the kind of thing that makes me not ever add anything on top. Granted I am a cranky (if mostly generously tipping) girl.

If they are going to charge a fixed rate for service, why not just make a no tipping policy and include the percentage in the cost of the food?

Edited August 8, 2005 by *Deborah* (log)

[shelly59]

I, like Deborah, am not thrilled by the automatic gratuity part of this. I feel that I, not the restaurant, have the right to determine how awesome, bad or indifferent the service is and tip accordingly. Once they have my money, they can throw it on the floor and roll in it, for all I care. And I AM a generous tipper, fwiw.

[Laksa]

If they are going to charge a fixed rate for service, why not just make a no tipping policy and include the percentage in the cost of the food?

←

While it is true that dollar amount diners are required to pay ends up being the same, whether the 20% is added to the price of every item on the menu, or to the total of every bill, it is probably more obvious to the customers that, in the latter case, payment for services has been accounted for, and that anything they add on top is purely at their discretion and not a requirement.

I prefer the mandatory service charge and don't really mind if it's a separate line item or figured into the prices on the menu.

[Fat Guy]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

[godito]

Personally, I've always believed that pooling tips (or making them a salary, like Trotter does) is better for the customers. If they only care about their daily tips, it's likely that they might serve larga tables better. I remember when I was working as a server we all wanted the big tables. Sometimes we got a couple of big tables and a couple of deuces, and it was hard not to neglect the small ones. Ok, neglect is not the right word. But we served the big ones better. Quite simply, there was more money there.

Servers might not want to pool because there's always someone who doesn't work as hard but for some reason never gets fired.

As for the 20% service charge added, it's ok if the servers make no mistakes. But it's a little arrogant to assume this. What will they do if they obviously screw up? I think if wine gets spilled over my jacket and the servers offer only a lukewarm appology, just trying to avoid a scene (true story) and I still see a 20% charged for "service" I would not be too happy. I wonder how would they deal with mistakes?

[Carrot Top]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

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I never would have imagined that two simple sentences would have been able to pose such a really good question to my own thinking on tipping (which takes its own peculiar and passionate form as everyone else's does ). Good right jibe there, FG.

You might find, though, that the people who would fight the most for the situation to remain basically as it has been for years (tipping based on perceived quality of service and check amount, with the bussers being tipped out by the server) would be the very best servers on the block. For they can make out like bandits.

[*Deborah*]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

←

Let it be an anomaly; it is a gratuity, at the discretion of the diner. If the industry on the whole would like to remove the gratuity, make a service charge, or include it in the cost of the food and pay their staff a reasonable wage, then Amen, Brother. Per Se is evidently in the X% of restaurants where you are just about guaranteed good service and more than likely to tip at least 20% anyway, but that is not the case everywhere, I'm sure anyone here can attest. Do you think that the service everywhere will improve if the staff know they can look forward to a specific percentage at the end of the shift?

I tip hair service persons from washer up according to whim, btw. They don't add a special 15 or 20% to your hair bill for your cutter, or $5 for the girl who washes you...in my experience. You are expected to tip, and to tip each person separately, according to how happy you are with their service.

[rich]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

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Most services that have charges up front have remedies if said services aren't performed up to expectation. If I go to barbershop and get a lousy haircut, then the tip is small or non-existant. If I take a cab ride and I know the cabbie drove me around town with no explanation, then there's no tip and/or I deduct something from the meter. If I contract to have my kitchen re-modeled, I pay something up front and the remainder upon completion. If the work doesn't meet the required specifications, the remainder is not paid. I only pay a real estate agent AFTER my house is sold.

I could go on and on, but there is also a "Theft of Services" law, which allows consumers to sue for "un-performed" or stolen services. In some cases where a fee has not been paid, the monies go into an escrow account.

That being said, I am totally against mandatory tipping for small parties or equal pooling. It takes away the incentive to do a good job. When I worked in a tuxedo (because all waitstaff was required to wear one) restaurant (working my way through college) we started out pooling equally. Some people weren't putting all of their cash tips into the pool.

I convinced the restaurant to go to a "15% must" system, whereby all waitstaff was required to turn in 15% of their total bills (before tax) into the pool. Everything else was theirs to keep. From that, the bussers got a share and if you had a good night, you tipped the bussers extra.

Most people will tip waiters 15% for average or just below average service and 20 - 25% for good to excellent service. I think the "good" waiters at Per Se are going to be upset because when 20% is added to the bill, few if any patrons will add more dollars.

Finally, it's going to be interesting when 20% is added to some of their very expensive (read four digit) wine bottles. That should make for some interesting conversation. I know you're going to say if you're ordering a $1,000 wine, you can afford the other $200, but I'm not sure every patron will see it that way.

Also just for curiosity and the IRS man, is this 20% going to be added pre or post tax? If it's pre, than the waiters will lose more, since most people tip on the whole bill and pay no attention to the tax.

Edited August 8, 2005 by rich (log)

[bilrus]

I would venture a guess that if a diner had a particular gripe with the service (not necessarily the fact that there is a service fee, but actual bad service) at Per Se and took it up with a manager, that in most cases, the mandatory service fee would be waived and the tip left to the discretion of the diner.

[slkinsey]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

Let it be an anomaly; it is a gratuity, at the discretion of the diner.

Here's the problem with that: 90% of the diners at a restaurant are entirely unqualified to determine what is and is not under the control of the waitstaff, and may often penalize (or reward, although this is far less likely) the waitstaff for something that is not their fault. And a not insignificant percentage of the diners at a restaurant (let's put it at a conservative 20%) use the "at my discretion based on the quality of the service" premise as an excuse to be cheap. In addition, some people simply don't know any better (I know a lawyer who regularly tips at around 6% despite the fact that the meals will be charged to the Firm). These things all add up to a terrible system.

Most services that have charges up front have remedies if said services aren't performed up to expectation.

Er. . . unless you are at McDonald's, the charges at a restaurant are not up front. They come after the meal is consumed. If there is a substantial problem with the meal, such that the diner feels that the meal was significantly less valuable than the price charged, the diner has the ability to take it up with management before paying the bill. In the event that there has been a significant problem with service or food, I can't think of many restaurants that wouldn't reduce the bill (if they want to stay in business, that is). And the diner can always pay whatever he thinks the meal is worth and simply walk out. If the restaurant wants to pursue it, they can take him to court. Of course, taking it up with management is a lot less cowardly than simply stiffing the waiter and leaving.

[Fat Guy]

Do you think that the service everywhere will improve if the staff know they can look forward to a specific percentage at the end of the shift?

←

That's how they do it in France.

Anyway, it's a myth that good service equals better tips. The number one factor correlating with better tips is . . . bigger checks. Most people tip whatever percentage they tip, within a very narrow band, no matter what level of service they get (save for the extremes of a total disaster or a sexual favor). In New York, you've got your people who double the tax, you've got your 20-percenters, etc. -- and they don't vary much. But if you upsell that person on a bottle of wine or bottled water or whatever, then the check is higher and therefore the tip is bigger. The one person in a hundred who actually sits there and says, "I'd rank my service today 7 out of 10, therefore I'll tip 17.9 percent instead of the 17.1 percent I'd have tipped for 6 out of 10 service," doesn't affect the overall tipping picture. So the incentive isn't to provide good service; it's to sell as much crap as possible.

[Anna N]

What other services are you allowed to pay for, after the fact, according to your whim? That doesn't strike me as a right; it strikes me as an anomaly.

←

Hmmmmmm... an anomaly? BUT

If I have a snarly mechanic and my car is properly repaired well c'est la vie - it doesn't ruin my evening, compromise my love life, or make me look inept in front of my guests for my poor choice of dining establishment. In a way, I see servers and other staff at restaurants for stand-ins for me as a host. I often wish we could provide instant feedback in the form of adjusted compensation for the quality of service provided in other places - especially government offices!

[rich]

Let it be an anomaly; it is a gratuity, at the discretion of the diner.

Here's the problem with that: 90% of the diners at a restaurant are entirely unqualified to determine what is and is not under the control of the waitstaff, and may often penalize (or reward, although this is far less likely) the waitstaff for something that is not their fault. And a not insignificant percentage of the diners at a restaurant (let's put it at a conservative 20%) use the "at my discretion based on the quality of the service" premise as an excuse to be cheap. In addition, some people simply don't know any better (I know a lawyer who regularly tips at around 6% despite the fact that the meals will be charged to the Firm). These things all add up to a terrible system.

I totally disagree Sam. If a diner has taken the time to get a reservation at Per Se or any other top-tier restaurant, then said diner knows how to tip and knows when a problem is the waiter's fault or not.

Having worked at various restaurants for the better part of ten years (during my school years), I don't believe your "20%...cheap" theory is accurate at all. Those people are the exceptions and make up a very small number. When I put the "15% must" system into affect (mentioned in the earlier post), no one came up short or had to put money into the pool from their own pocket -ever!

I think your lawyer friend is tipping on the same percentage he gives his real estate agent. Do most of his meals carry the same price tag as a home?

[*Deborah*]

Do you think that the service everywhere will improve if the staff know they can look forward to a specific percentage at the end of the shift?

←

That's how they do it in France.

Service in France (in my somewhat limited experience) is more often provided by people who are servers for a living, not server/actress/student/novelist etc. Unless I'm grossly mistaken, France has a social system that provides health care etc. for its citizens regardless of whether they make $2/hour or $200/hour. And I venture to guess that EU law also mandates minimum wages that are a little closer to a living wage than is the case in North America.

Anyway, it's a myth that good service equals better tips. The number one factor correlating with better tips is . . . bigger checks. Most people tip whatever percentage they tip, within a very narrow band, no matter what level of service they get (save for the extremes of a total disaster or a sexual favor). In New York, you've got your people who double the tax, you've got your 20-percenters, etc. -- and they don't vary much. But if you upsell that person on a bottle of wine or bottled water or whatever, then the check is higher and therefore the tip is bigger. The one person in a hundred who actually sits there and says, "I'd rank my service today 7 out of 10, therefore I'll tip 17.9 percent instead of the 17.1 percent I'd have tipped for 6 out of 10 service," doesn't affect the overall tipping picture. So the incentive isn't to provide good service; it's to sell as much crap as possible.

←

I obviously cannot answer for the heathens who don't understand the point or concept of discretionary tipping.

Edited for spelling.

Edited August 8, 2005 by *Deborah* (log)

[rich]

Do you think that the service everywhere will improve if the staff know they can look forward to a specific percentage at the end of the shift?

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That's how they do it in France.

←

Different culture, different work ethic, different lifestyle and not necessarily better service.

[rich]

Most services that have charges up front have remedies if said services aren't performed up to expectation.

Er. . . unless you are at McDonald's, the charges at a restaurant are not up front.

←

As I stated after that one-sentence quote you pulled, I was referring to other businesses as Steve said in his earlier post.

Edited August 8, 2005 by rich (log)