Per Se ends tipping in favor of service charge

[Busboy]

In France, as I understand it (and this is not an invitation to a debate about healthcare -- I'm just trying to define its relevance to the case in point), healthcare is funded primarily by a tax on wages. Those wages are paid by . . . employers. So I fail to see how this makes it categorically easier to pay servers a living wage in France than in the US.

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True, so I will substitute "not-for-profit healthcare" for the term "universal healthcare." That alone, regardless of who is paying for it, reduces the cost significantly.

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Still not sure I can agree. The French healthcare system includes both public, private for-profit and private not-for-profit care providers. But I don't suppose it's important to the argument. What you're saying is that healthcare costs in France are lower than in the US, and what I'm saying is that it's irrelevant. Yes, healthcare costs per employee are lower in France. But where's the evidence that overall costs per employee are lower in France? Having been involved in some international business deals, I can tell you that in my (limited) experience the per-employee costs in France are higher than here. Or even if it's a little bit less or more, France is still certainly an expensive country in which to do business and maintain employees regardless of the healthcare portion of the equation.

But all of that is beside the point. The appropriate basis for comparison is other US businesses. And it is beyond question that plenty of US businesses do just fine even though they have real employees and all the related healthcare costs. Restaurants don't need a special exemption. They just need to get their acts together and move into the 21st Century alongside real businesses.

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I think the health care hurdle lies in the fact that in the U.S. adding a health care benefit for a restaurant employing 20 people might easily run to $100-120K, a spectacular jump in overhead which most restaurants -- traditionally a low margin business -- couldn't afford (even if Keller can).

If the health care is paid out of general tax revenues through "national health", then higher-income individuals and more profitable companies would pick up the tab for the waitress at the corner diner or the bartender at the club or the guy who delivers your Thai food. It would be, in effect, a subsidy, (another argument altogether) and would allow marginally profitable (or unprofitable start-up) restaurants to employ workers with health care but without going out of business.

Having done a little work on "Hillarycare" in the early nineties, I can assure you that chain restaurants and those on the lower end of the scale will be dragged into the 21st century (in this regard, anyway) only kicking and screaming -- and they have a point. Health care became a standard benefit in the U.S. through unionization, white collar employment and civil service -- areas where the cost could easily passed along -- none of these is really going toaffect the restaurant industry.

[Carrot Top]

[. . .] service charge in place of a tipping system is only going to increase the general apathy in service.

Then again, it could be an excellent management tool.

And I am quite sure that people will, just because of the way things "feel" when they are given above-average service, tip over and above whatever the service charge is.

Good hospitality pays.

[rich]

Then again, it could be an excellent management tool.

And I am quite sure that people will, just because of the way things "feel" when they are given above-average service, tip over and above whatever the service charge is.

Good hospitality pays.

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I really don't believe many people will go above and beyond a listed 20% service charge - especially when they see the actual dollar amount listed on the bill. If Keller were to absorb the "charge" and a monetary service charge isn't seen (but the percentage is indicated on the menu), then I think there's better chance for an addtional gratuity.

[Fat Guy]

I think the percentages reflect regional norms. I agree that the ideal situation would be to go to a true wage system, but I think the service charge combined with the pooling arrangement is a step forward.

[jeroen_kb]

I'm not sure if I have a lot to add to this discussion, being European and thankfully don't have to worry about tipping (except when visiting the States, which always scares me, because I have no clue on what to do)

But one thing I find strange in this whole discussion is that nobody of the pro-tipping people here give a reasonable explanation why it's fair that as a customer I have to pay more for service (in the form of tip) for the 300 dollar foie gras brought on a plate from the kitchen compared to the 2 dollar french fries brought on a plate ?

Exactly the same action (walking from kitchen to my table) and a hugh difference in tip.

Reminds me of ( I think) Sweden where speeding fines are income related. The biggest fine ever was a few hundred thousands dollars because the speeder was a millionair.

[Fat Guy]

To separate the issues a little, I think we're talking about a few different scenarios: First, there's what happens in Per Se and in other high-end restaurants. Second, there's what happens at middle- and lower-end restaurants (a category that further divides into chains and non-chains). Then, overall, we are talking about, first, service charge scenarios and, second, pure wage scenarios.

At Per Se and other high-end restaurants, the minimum wage doesn't really enter into the equation -- waiters are out of that category. Likewise, such places tend to offer health plans already. I think the FICA and other tax issues are relatively minor -- these places do 90+ percent credit card business and cash is pooled and tracked by computer anyway. So the big switch mostly involves the gratuity versus service charge issue in its pure form. If you believe tipping works, that ends the discussion. I believe it has been emphatically proven not to work and to be a bad thing. So I favor the switch to a service charge in this context.

As for the middle- and lower-end restaurants, the switch from tipping to a service charge is not particularly related to the healthcare issue. It is only the switch from tipping or the service charge to a real wage system that would trigger those concerns. Although, I hasten to add, plenty of middle-market food service establishments currently provide both living wages and healthcare to their service employees -- so it is definitely not impossible. In fact it's common.

Yes, if restaurants that are not currently providing living wages and benefits are suddenly going to do so, they will have to charge more money for food and pay their servers less cash so they can make enough money selling what they sell to pay their employees what their employees need to be paid in order to live now and in the future. In other words, they will have to be real businesses, just like other businesses. It would not bother me in the slightest to pay an extra couple of dollars for every menu item in every restaurant in order to make this happen. Consider it a tip, if it makes you feel better.

[Bux]

. . . .  I think it totally works for a place like Per Se where you are going to get the highest service and attention. 

My concerns are when the "non flashy" but darn good eats places start incorporating the same practice.  Overall, my dining experiences are in the $$$ category...once in a blue moon going for the $$$$    And in my experience, I can count on one hand the times in my mind that service has been stellar at that $$$ price range.  . . . .

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Going back in time to a point well before the site existed, I've often found myself involved in a thread about restaurants, when well into the thread, it dawns on me that when I say "restaurant," I'm thinking white tablecloths and the other guy is thinking formica. JeAnneS' point is well taken. Service in a moderately priced restaurant is as different a situation from service in a place such as Per Se, as it is from that in a barber shop. It's not that the little restaurant is in another league, it's that they're not playing the same game as Per Se. Hell, the ball is different and there are far fewer players on the field at any one time. Many of us who rail against tips in restaurants may well dislike the whole concept of tipping for a professional job whether it's for legal services, accounting services, buying a cake in a bakery or a cup of coffee in a take out, but this thread is about restaurants so we talk about tipping in restaurants.

I've traveled a fair amount in my time and have almost always been uncomfortable about tipping when in a foreign country. In Spain, almost everyone I've asked has a different answer that's ranged from "it's included in the menu price" all the way up to "ten percent." The latter by someone who proceded to leave five percent the next time we dined together. Then he explained it was all about the type of restaurant. I'm sure I've been called "sport" and "s.o.b." in Spain. It's no wonder I found Japan so hospitable. Tipping is considered insulting there. Even in this country, there are so few services where we can tell people we'll pay them what we think it's worth after they've served us. I find that an offensive and embarrassing relationship in the abstract, but in reality, it's one supported by the waiters, especially in the top restaurants where a pro can earn a very good living and where only the pros survive for long.

[Bux]

but the question is, how many diners @ PerSe actually pay their tip in cash?

It's now $175 pp. Thats $350 per couple excluding beverages and tax.

A meal for 2 can easily be $500. After a certain $ amount I think a lot of people will pay their tip with their CC.

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I suspect that outside of a handshake, almost all tips are on the credit card. In these days of an ATM on every corner, I don't usually carry around enough cash to cover a tip that even a cheapskate might leave at Per Se. A good number of years back, I was rather unexpectedly comped a meal for three people at a major upscale restaurant. Of course I had expected to pay the bill with a credit card and the three of us had to search deeply in our pockets and purses to come up with might have been a reasonable tip for the service. As we had earlier been upsold on the wine by the waiter who likely knew we were to be comped, I really owned him a larger than usual tip. I suspect our pile of twenties, tens, fives and ones were a clue we were unprepared.

[rich]

Even in this country, there are so few services where we can tell people we'll pay them what we think it's worth after they've served us. I find that an offensive and embarrassing relationship in the abstract, but in reality, it's one supported by the waiters, especially in the top restaurants where a pro can earn a very good living and where only the pros survive for long.

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Okay Bux, I see your point. But within that abstract is the 15% rule. Yes, we have heard of people who leave 10% and Sam told us about a lawyer friend who leaves 6% (those are rare), but the common ground to start is 15% (might be higher in larger metro areas). So the wait staff knows before a party sits down they're going to get 15% unless there's a castastrophe of some sought.

Now, what I'm campaigning for is the additional monies left above the norm and that's where skill, service, etc. come into play. The better waiters or the pros as you call them, know how to provide better service and if they perform up to their level of competence, then they will make more than the actor/actress who is just there to pay rent. And those pros should keep (not pool) the addtional "tips" they make because they earned it.

I'm going to digress and give an analogy within the horse racing business. When I hire a jockey to ride my horse the standard rate is 10% of the purse but only if they win. Running second or third, etc. nets them less of a percentage. So it's not until after the race is finished do they know their pay scale and that's determined by their skill in getting the horse to perform at its best. Naturally, the best jockeys earn more because they win more races and are racing in the better races. And they achieve that level due to a higher skill level. Other jockeys witness this and will attempt to emulate the success of their fellow jockeys.

I don't see the problem with earning more simply because you have more skill. The incentive still comes into play as a positive for both parties whether its restaurants or horse racing.

Edited August 11, 2005 by rich (log)

[Fat Guy]

In the restaurant horserace: 1) the crowd gets to decide after the race is over which jockey to pay, 2) the crowd makes its jockey payment decisions based on numerous factors extraneous to who won the race: weather, charisma, gender, and 3) jockeys randomly get paid more for racing brown horses than for racing black horses, etc. Doesn't sound like a very effective system for encouraging jockeys to win horseraces. The smart jockeys would find pretty horses and do little dances and acrobatics and rope tricks on them in order to get tips from the crowd, while the naive jockeys would win the race and get nothing.

[Carrot Top]

In other words, they will have to be real businesses, just like other businesses. It would not bother me in the slightest to pay an extra couple of dollars for every menu item in every restaurant in order to make this happen. Consider it a tip, if it makes you feel better.

Would not bother me in the least either, though it would not be something I'd "like" initially.

But then I remember how good we have in the US on so many prices of things as compared to other places.

Many people would be very unhappy with paying even the least bit more for their food, though. I recently was approached by a group in town here trying to get signatures for a petition to not allow a tax increase on restaurant sales within town limits.

The petitioners could well afford to pay the tax increase. . .they seemed to all be well-heeled youngsters with their college debit cards loaded to the brim with dollars from Mom and Dad. It is just that they resented being asked to pay more for their pizza and beer. After all, one does need to buy those hundred-dollar blue jeans, too. (I am not sure whether to put a laughing smilie here or a shocked one or what. . .)

I asked them if they knew where the additional taxes were going to be used. They said no, they didn't.

I then explained that the taxes would be used for education, to ensure that the children in elementary schools would not have to go from having 18-20 in a classroom up to 30 in a classroom with one teacher.

Did they care?

Nope.

[Holly Moore]

The benefit for servers with building the service charge into the menu price is that, human nature being what it currently is, diners will soon want to reward good servers and start adding additional gratuities onto the bill. Maybe 5 percent to start. Then when that becomes common, 10 percent. And in another 20 years a new generation of eGulleters will once again be having this discussion.

Maybe the compulsion to tip in restaurants can be genetically bred out of future yupscale diners, but in the present and the forseeable future, the servers are certain to benefit if and when service charges are incorporated into the menu pricing.

[rich]

In the restaurant horserace: 1) the crowd gets to decide after the race is over which jockey to pay, 2) the crowd makes its jockey payment decisions based on numerous factors extraneous to who won the race: weather, charisma, gender, and 3) jockeys randomly get paid more for racing brown horses than for racing black horses, etc. Doesn't sound like a very effective system for encouraging jockeys to win horseraces. The smart jockeys would find pretty horses and do little dances and acrobatics and rope tricks on them in order to get tips from the crowd, while the naive jockeys would win the race and get nothing.

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One at a time: 1) the crowd chooses who to pay MORE (others are still getting 15-20%) after the dinner based on performance, just as the jockey who wins gets more, 2) ONE determining factor in restaurant tipping may be based on charisma because a person with great charisma is more likely to make for a more pleasant experience. As far as weather and gender - I know the studies say this is the case, but once again I don't believe it's a MAJOR factor (gender gap issue). 3) I'm not sure what you mean by three unless you're referring to race bias. If that's the case I totally disagree. If it's not, then please explain.

I don't think the last part is true at all. If a waiter/waitress had great chrisma, but lacked in other basic skills, that person would not get extra consideration. If someone looked and acted great but failed to honor requests, disappeared for long periods, got the order wrong, failed to ask about drinks, etc, no trick or joke in the world would get them a better tip.

And the jockeys would always want to ride a horse that can run fast over one that looked pretty. Because, at the end of the day, winning is the only the way to earn a living.

Edited August 11, 2005 by rich (log)

[Bux]

Waiters would never put their hands on my shoulder or smiley faces on checks if they believed good service was the best path to a better tip.

[Fat Guy]

Rich, there's not much I can do to convince you if you're going to be so truculent in the face of what every expert says based on studies of thousands of customers, restaurants and meals. We're not talking about one study by one person. We're talking about a large body of work. Perhaps you could start by pointing to one expert, one study, one set of data that supports what you're saying. At least then we'd be in the realm of credible disagreement. At this point, you're just insisting that the Earth is flat because anybody can see if you look straight ahead the Earth is obviously flat -- that's your experience and, damn it, you won't be hearing any different from the so-called experts. Furthermore, if the tipping system works so well, why is restaurant service in America so bad? Why is it better in Europe? Why don't countries where they don't have tipping have uniformly bad service? Clearly, the cultural bias that makes so many Americans express the belief that restaurant service would be awful without tipping is patently false when held up against the map of reality.

[jackal10]

It is sad that the US has institionalised what anounts to begging by waitstaff (smileys and the rest), and makes the customer connive in a semi-officially sanctioned tax avoidance.

Much better (and to my mind more dignified) to pay the staff proper wages, and to charge what it costs, rather than indulge in a pretense that the food and wine are somehow 20% cheaper than they really are.

Its not as though I can elect to receive less service (I'll pour my own wine/ fetch my food from the kitchen/ stack dishes, thanks), and pay less tip.

[Fat Guy]

It's not all begging, Jack. Part of it is also bribery.

[jackal10]

It woyld be bribery if you paid it at the beginiing of the meal. At the end its begging.

Reminiscent of pre-war restaurants in Berlin that allegedly kept a resident beggar/artist exhibited a glass case so the diners could experience Schadenfreude and a sense of their superiority and apparent generosity.

Edited August 11, 2005 by jackal10 (log)

[Carrot Top]

Its not as though I can elect to receive less service (I'll pour my own wine/ fetch my food from the kitchen/ stack dishes, thanks), and pay less tip.

Tell ya what, though. I can't remember a single time within the past year that I've gone to a "family" style restaurant with my children where I didn't do just that, in lieu of finding a service person that knew what they were doing.

I know where the napkins and silverware are in each of these places. (Not that we go often, even, perhaps once every two months.)

And I know where to go to tell the kitchen that it left off part of the order, too.

Because I am unwilling to sit there for ten minutes fiddling my thumbs trying to get a server (or even a manager) to pay attention, while the food is cooling and the children are understandably getting cranky.

Why do I go back? Because sometimes that is the standard. . .one will simply not find better in the area.

[rich]

Rich, there's not much I can do to convince you if you're going to be so truculent in the face of what every expert says based on studies of thousands of customers, restaurants and meals. We're not talking about one study by one person. We're talking about a large body of work. Perhaps you could start by pointing to one expert, one study, one set of data that supports what you're saying. At least then we'd be in the realm of credible disagreement. At this point, you're just insisting that the Earth is flat because anybody can see if you look straight ahead the Earth is obviously flat -- that's your experience and, damn it, you won't be hearing any different from the so-called experts. Furthermore, if the tipping system works so well, why is restaurant service in America so bad? Why is it better in Europe? Why don't countries where they don't have tipping have uniformly bad service? Clearly, the cultural bias that makes so many Americans express the belief that restaurant service would be awful without tipping is patently false when held up against the map of reality.

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I've tried NOT to be truculent, just offering an alternative view to the studies.

The more I read this, the more I'm convinced this is really a generation gap issue. Steve, you're 19 years younger (I'm jealous) than me. At 19 I had already worked for a couple of years in a restaurant and at the time, service was the determining factor for better tips. On that I ask you to take my word - I don't even think they did tipping studies back then. (The age difference is also the reason why you and I have different views of Luger's)

If over the years it's changed, so be it, Ill accept the studies if that makes everyone happy. It's not how I tip now or the people I go out with tip. Since they are usually around the same age, the generation gap issue is a strong possibility.

I have expressed my view about supporting a complete salary system, the only two places we disagree are the studies and the money beyond the added-on or built-in (we both prefer this) service charge. You say it should be pooled because that money is determined by factors other than service, based on the studies.

I say it should be kept by the individual who received it because it was earned due to good service, based on my experience. Since I haven't worked in a restaurant since 1977, I'll give in and say the pretty face gets the better tips. But I must add that I'm very glad it didn't work that way when I was a waiter!

Edited August 11, 2005 by rich (log)

[Tess]

It woyld be bribery if you paid it at the beginiing of the meal. At the end its begging.

It's bribery if you go back to the same places a lot.

I give out either tips or gifts at holiday time to anyone who performs a personal service for me, including the guys who look after my dog in the kennel. That's bribery and that's fine with me. I want them to remember me-- and not as someone who's a pain in the a**-- if I ever have to make a special request. I can also do that by acting polite and not habitually wasting their time, but a bit of money helps too. I like that part about tipping but in most cases I'm tipping those people on top of a wage I assume they can live on.

[MichaelB]

The more I read this, the more I'm convinced this is really a gender gap issue.

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Sorry, I simply cannot resist this one.

Just which one of you gentlmen was once a member of the other sex?

[Fat Guy]

It woyld be bribery if you paid it at the beginiing of the meal. At the end its begging.

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That assumes a single transaction with all payment at the end. But assume an iterated tipping game, such as in a bar. You tip the bartender generously after the first and second drinks in the hopes of getting the third drink comped. That's an inducement (aka a bribe), not a gratuity. Likewise, over the course of multiple visits to a restaurant the line between inducement and gratuity gets blurred. You tip the server well so he'll remember you the next time and give you "better service" (I use this phrase to include what many people mistakenly think is better service). Even in a single-visit situation, you may tip the maitre d' on the way in so that you get a better table and better service. And there are other ways to play the game: you dress really well, you act a certain way, you imply that you're the big-tipping type in the hopes of getting better service.

And tipping in advance is only a matter of time, because the bribe is fundamentally more efficient and effective than the gratuity. Already, in other tipped industries it is common to tip in advance. For example, at this point everybody should know to tip moving men in advance of the move -- in other words you should negotiate the bribe up front so they break less of your stuff.

Edited August 11, 2005 by Fat Guy (log)

[rich]

The more I read this, the more I'm convinced this is really a gender gap issue.

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Sorry, I simply cannot resist this one.

Just which one of you gentlmen was once a member of the other sex?

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Good catch - I meant generation gap. I'll go back and fix it.

[jbonne]

a couple quick things, then ducking back into read-only ...

(1) i'm surprised folks haven't spent more time considering the revelation from Page Six that the service fee is meant to be shared between FOH and BOH. by my read, that translates into a lot less money for the wait staff, since they're suddenly going to be pooled in with line chefs, &c. note that the Per Se rep said that it's become "harder and harder" to keep the line staff. their solution is to dock the FOH?

(2) i think i'm on the record endorsing Fat Guy's view of the general screwed-up-edness of the U.S. tipping system. given that Keller and his wife Laura Cunningham probably spend more time and effort training their servers than almost anyone else in America, it's curious that he didn't go all the way, as suggested above, and move to a French-style straight salary. given the level of training for the staff, you'd expect Keller/Cunningham to be finding a solution to keep their servers long-term, and a standardized salary/benefits/&c. would potentially help attract those people who view service as a career. that said ...

(3) as Busboy mentioned many, many screens ago, diners always have the option of leaving (or more adeptly, palming) a cash gratuity to the captain, server or sommelier who has gone the extra mile. true, these (totally off-the-books) tips are an anachronism, but tradition usually dictates that they can be pocketed by the staffer in question. my father, who studied restaurant management in school and spent his share of time in professional food service, still occasionally engages in this practice for outstanding service -- when, for instance, a sommelier was the only helpful staffer among an otherwise inept set of servers at one Seattle restaurant.

(4) Michael Lynn has truly fascinating studies on the subject, but my recollection is that most of his data is generated at casual restaurants. (it's been a while since i looked at his reports.) while i don't dismiss some of his conclusions, i think you have to acknowledge the gap between in customer behavior between the Olive Garden and Per Se.