Per Se ends tipping in favor of service charge

[rich]

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?

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I thought I mentioned that in a very early post, but I've made so many in this thread, I might not have. I'm going to make a wild leap of faith here and say that's the reason for 20% and not 18% or 15%. My guess is (as someone else said, either Sam or Bux) the average Per Se tip is probably closer to 15% because of the high prices and some people don't give a full tip on very expensive wine. I guess the 20% (and I'm sure Keller knows) represents an increase in the average Per Se tip.

[Felice]

I worked in restaurants, as both a waitress and manager, for many years in the US (Philadelphia) and then moved to Paris, where I live now, and waitressed at a wine bar/restaurant for about two years, so I have experience working with both systems.

In France a service charge is always included and the waiter is often paid a monthly salary. The service charge therefore goes towards paying that salary and the waiter does not usually receive a percentage of what he/she serves. Like all employees in France, waiters are also given healthcare, 5 weeks vacation, and retirement benefits (mind you, these are not free and a VERY big portion of my check went towards these benefits each month). Where I worked we were paid the minimum wage which was a bit more than 7.50 an hour. We then pooled the small tips (with the entire staff) that people left and were paid our “tip-out” at the end of the week. On average, I made about 50 € a shift, (including these small “tips”), after charges and taxes. So, it was A LOT less than I was used to making.

Even though we were being paid a little less than 8 € an hour, the restaurant themselves were paying about double that to cover all of the social charges. That’s why a lot of restaurants in France work with such small staffs. We had no busers, no runners, etc They just can’t afford to have a big staff the way restaurants do in the US. So, service does suffer. Fine dining, of course is different, but the prices reflect this.

For financial reasons, I definitely preferred the American system. There’s also something highly motivating and even fun about working for tips. Sitting down and counting your tips after a really hard night feels great and in France no matter how hard I worked, chances are I was going to make roughly the same amount—not very motivating.

[MichaelB]

After 6 pages of holding back, I will throw my 2 cents onto the table -- even though I acknowledge that I am not speaking from a terribly defensible base on several counts.

The indefensible base:

1. I really don't dine out when I am in my home town. I have been out in my home town 4 times in 2005 and two of those were to a service compris establishment (Jean-Robert at Pigall's).

2. I couldn't even tell you what my average tip is. It has been so long since I tipped on a "straight" check, I can't remember when it might have been. I know though that the average for the last 5 years is meaningfully north of 25% of my restaurant checks.

3. I am a kitchen rat at heart. I cannot express my emotions when I think about the relative equities (and contribution to my perceived value of the meal) of (a) the line cook who is $40,000 in debt from his eduction at CIA, NECI, J&W, etc., makes $11+ an hour and works 11 or more hour days and (b) the waiter who works perhaps 6 hours a day on average in air conditioned comfort and makes well over $50,000 a year, one-third to one-half undeclared.

That said:

The US restaurant world is the only place (that I can think of) where the "tip" represents both an independently meaningful amount of money and a substantial portion of the cost of the overall experience. (For example, even if I use the heck out of hotel services at a high end hotel and expend $25 a day in tips, that $25 represents and insubstantial portion of the several hundred dollar a day cost of the room; the general tip to a cabbie is not an independently significant sum; etc.)

Like Bux, I find it demeaning to both me and the servers that I am expected to pay a substantial portion of the operating cost of the restaurant directly to the employees and that the servers are expected to entice me to do so.

Service is an integral part of the dining experience. I see no justification for unbundling the cost of that service from the rest of the cost. I see even less justification for my getting to determine that value of the service portion of that integrated experience.

Please Mr. (Ms.) Restaurateur, tell me the value that you place on an experience in your establishment. I'll let you know if I perceive an equivalent value -- by becoming a patron or by staying home.

(All quoted amounts are in the context of a place like Per Se.)

[MichaelB]

(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.

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I suspect their research indicates that -- in the context of the US restaurant world -- consumers will be less confused with a separately stated service charge.

Picture these two checks at Per Se (dinner for 2, tax omitted intentionally):

Food $350

Wine 250

Total 600

SC 120

Grand 720

or

Food $420

Wine 300

Total 720

Now, the menu and bill both say service included. Do you still feel obligated to leave a meaningful "tip" because that's the way things are done in the US? What if you are a German tourist and you are used to service compris but you understand things are "different" in the US?

I think the service charge is a middle road that most people will understand better.

[TPO]

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?

There is bad service in many industries outside of restaurants. I don't know why service seems to have gone downhill in recent years, but perhaps it is related to such employees being typically unappreciated and underpaid while dealing with lack of vacation time as well as other benefits. And there may not be a penalty for such behavior as many Americans have become accustomed to bad customer service in exachange for cheap prices, leaving stores with an incentive to keep prices low but not necessarily treat employees better.

But then there are some fast-food restaurants and department stores where I almost consistently get good service. I am not tipping these employees; therefore I would guess that the businesses hire good people and work to keep them. To me, what matters much more than letting workers work for tips is paying them a living wage with benefits and treating them like valued employees. Happy employees often help make happy customers which often makes increased business through repeat customers and word-of-mouth advertising.

Like Bux, I find it demeaning to both me and the servers that I am expected to pay a substantial portion of the operating cost of the restaurant directly to the employees and that the servers are expected to entice me to do so.

Service is an integral part of the dining experience. I see no justification for unbundling the cost of that service from the rest of the cost. I see even less justification for my getting to determine that value of the service portion of that integrated experience.

Good point about the tipping process being demeaning. That's how I have been feeling lately, although I appreciate and respect the servers who prefer the current system.

As for incorporating the cost into the food, on one hand I think it is a good idea. But on the other hand a service charge charges only the people eating in the dining room. Presumably takeout food would have a smaller service charge. (Obviously I am not talking about high-end restaurants here, just thinking hypothetically if all restaurants went to a service charge instead of tipping.)

[Edited to correct spelling.]

Edited August 11, 2005 by TPO (log)

[rich]

(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.

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I suspect their research indicates that -- in the context of the US restaurant world -- consumers will be less confused with a separately stated service charge.

Picture these two checks at Per Se (dinner for 2, tax omitted intentionally):

Food $350

Wine 250

Total 600

SC 120

Grand 720

or

Food $420

Wine 300

Total 720

Now, the menu and bill both say service included. Do you still feel obligated to leave a meaningful "tip" because that's the way things are done in the US? What if you are a German tourist and you are used to service compris but you understand things are "different" in the US?

I think the service charge is a middle road that most people will understand better.

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I think they will understand it better, but they will be less likely to leave anything extra once they see that $120 in print.

[Bux]

. . . .

I suspect their research indicates that -- in the context of the US restaurant world --

. . . .

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Context is everything.

I think the service charge is a middle road that most people will understand better.

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I believe Fat Guy made a similar statement when he said it was a move in the right direction, or whatever he said (even if I'm putting words in his mouth). Let's also bear in mind that this move is made not in the context of the US restaurant world as much as it's in the context of diining at Per Se, per se. (Gotta wish I was speaking to Percy so I could add his name.) That context includes a severe charge if you're a no show. It includes a charge for the no show when a party of five shows up and the reservation was made for six. For all the hoopla, there really is little or no precedent being set here.

[Bux]

I think they will understand it better, but they will be less likely to leave anything extra once they see that $120 in print.

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Here we can only make suppositions. Your guess is as good as mine. What I expect will happen is that people who eat here regularly will talk among themselves. Journalists will help spread rumors about what's becoming the standard and tipping will, or will not re-establish itself. For all that those who wish tipping would be replaced by a fair professional salary and true dining costs reflected on the menu, I should not that some people buy their lawyers Christmas presents as well. Call it a gift, call it a tip or call it a bribe, it's ingrained.

[Fat Guy]

Thought I should also mention that Chez Panisse has long had a service charge, currently 17%, and Charlie Trotter's has an 18% service charge.

Edited August 11, 2005 by Fat Guy (log)

[rich]

I think they will understand it better, but they will be less likely to leave anything extra once they see that $120 in print.

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Here we can only make suppositions. Your guess is as good as mine. What I expect will happen is that people who eat here regularly will talk among themselves. Journalists will help spread rumors about what's becoming the standard and tipping will, or will not re-establish itself. For all that those who wish tipping would be replaced by a fair professional salary and true dining costs reflected on the menu, I should not that some people buy their lawyers Christmas presents as well. Call it a gift, call it a tip or call it a bribe, it's ingrained.

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True, but human nature being what it is, don't you think seeing a large service charge number in print, rather than it being included in the menu/wine list price, would deter people from leaving an additional tip? Or do you think at that level, it doesn't matter and people will add more for whatever reason they may have?

[rich]

Thought I should also mention that Chez Panisse has long had a service charge, currently 17%, and Charlie Trotter's has an 18% service charge.

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I got married in 1979 and one night during our honeymoon week, we went to the Palace on 59th Street near the Queensborough Bridge. It was considered one of the finest and THE most expensive NYC restaurant at the time. The service charge was 23% - 15% waiter, 5% captian, 3% wine steward. I didn't leave anything extra. The final bill came to $385 in 1979 money.

[Fat Guy]

(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.

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True. I haven't read every one of Lynn's studies, nor have I read all the other studies on tipping that he has studied in his meta-studies, but it's clear that the majority of the data come from the majority types of restaurants relevant to most people when it comes to tipping: casual dining table service places. I'm not aware of studies he has done wherein he isolates fine dining. Well, at least not studies on the tipping-service correlation issue. He does isolate fine dining in some of his ethnicity studies -- now there's a powderkeg we should discuss on another topic and preferably in another universe. What I think is interesting about the extremes of dining, however, is that you find the service charges there: at Per Se, Chez Panisse and Charlie Trotter's, and also at the really cheap places like buffets and "barbecue" (as in roast chicken) restaurants -- that's where you see a lot of fixed service charges, whereas you don't see them in the middle. One thing I'd have to guess -- and this is an educated guess -- is that when you get to the fine dining level you have 1) something like 95% customer satisfaction (this comes from a USA Today poll I saw awhile back) so the tipping variance isn't as much of an issue, 2) a lot more people who are inelastic tippers, 3) nearly universal pooling, and 4) I'd bet a lot that there is one factor -- size of check -- that totally dominates all the other factors in the fine-dining tip-decision matrix.

[slkinsey]

I got married in 1979 and one night during our honeymoon week, we went to the Palace on 59th Street near the Queensborough Bridge. It was considered one of the finest and THE most expensive NYC restaurant at the time. The service charge was 23% - 15% waiter, 5% captian, 3% wine steward. I didn't leave anything extra. The final bill came to $385 in 1979 money.

That's very interesting, Rich. I wonder if it's the case that >25 years ago -- more likely >35 years ago -- when the definition of fine dining in America was largely a French European one, if it was the case that many/most high-end fine dining establishments tended to be on a service charge or service compris system. This would make some sense, as it would more or less have mirrored the system in place in the restaurants in France that were being emulated (they were doing it with the food, FOH and BOH organization, and style of service, so why not this too?).

[Fat Guy]

(Note: yes, I have been trying to get him to participate here; I'll put in a nagging call tonight).

[ingridsf]

Having been in the sex ed <cough> biz, I'm here to tell you that what people tell you they do and what they actually do are often two different things. I do not believe fifteen, let alone twenty, is the baseline percentage people use. Oh, they KNOW about it, refer to it as they calculate, but the amount they leave may well be in the ten-twelve percent range.

Anyone who doubts my theory should consider the sad case of a Dr. Kinsey whose study on the average size of a certain male body part relied solely on uncorroborated individual disclosure and led to a generation of needlessly anxious men.

Don't know about the generational thing. My dad's in his 70's and I always sneak back to add money to the teeny tips he leaves at his favorite places -- the family-owned diner in his town and the place opened by the CIA grad, heh. His amount has nothing to do with the quality of service -- and he's from Europe! He just doesn't think he should have to pay anything more than he's absolutely forced to. If it makes me yuppy scum to do otherwise, so be it. (As if a nonprofit worker makes enough to even DREAM of being yuppy scum...)

[jbonne]

One thing I'd have to guess -- and this is an educated guess -- is that when you get to the fine dining level you have 1) something like 95% customer satisfaction (this comes from a USA Today poll I saw awhile back) so the tipping variance isn't as much of an issue, 2) a lot more people who are inelastic tippers, 3) nearly universal pooling, and 4) I'd bet a lot that there is one factor -- size of check -- that totally dominates all the other factors in the fine-dining tip-decision matrix.

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totally agree. i always tried to take the studies with a grain of salt because many of the findings -- and the little suggestions given to servers based on the Cornell data -- would be invasive and inappropriate in a fine-dining context. Keller/Cunningham specifically train their staff *not* to tell diners their names, for instance, on the belief that service should be attentive but anonymous.

re: the Panisse service charge, i remember appreciating that they were removing some of the tipping guesswork likely to happen when you journey to Alice Waters' altar. but given the lousy service we had at the cafe there, i also felt 17 percent was about the max i possibly would have given in a free-market system. i wondered afterward if the service charge had contributed to an atmosphere in which servers had stopped trying because they knew upfront that they were guaranteed a certain amount.

[Carrot Top]

re: the Panisse service charge, i remember appreciating that they were removing some of the tipping guesswork likely to happen when you journey to Alice Waters' altar. but given the lousy service we had at the cafe there, i also felt 17 percent was about the max i possibly would have given in a free-market system. i wondered afterward if the service charge had contributed to an atmosphere in which servers had stopped trying because they knew upfront that they were guaranteed a certain amount.

It really startles me to hear this, for it seems to me that a guaranteed salary to the staff would be one of the best tools that a manager could have in terms of "motivation". If their salary is secure and of a certain level, they should be expected to perform at a certain level. There can be no softness there in terms of them saying, "Well I just don't make *the money* here".

It is what it is, one must assume they understood the salary when they took the job, and the service standards are what they are.

And if the service standards are not being met, then that is a management problem that rather hints at lacksadaisical-ness (if that is even a word. . . ) on the managers part.

Even at "only" 17% of the bill, they likely were taking in more than many of their counterparts who work at places with lower check averages. Plus they were getting a pretty good reference on their resume.

That situation could be improved by better management or hiring practices.

[jbonne]

Even at "only" 17% of the bill, they likely were taking in more than many of their counterparts who work at places with lower check averages. Plus they were getting a pretty good reference on their resume.

That situation could be improved by better management or hiring practices.

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couldn't say it better myself. i think it's a mixed blessing: you're going to draw staff who like the stability of the process. but in that mix, you may also find some duds. i'm guessing Panisse doesn't ride herd on their staff quite as rigorously as FL/Per Se. (few do.) we also encountered some perfectly charming staff there, just not our server.

[Fat Guy]

Just a semantic point: if anything, a set fee for a service strikes me as more "free market" than an after-the-fact gratuity. Or, as Michael Lynn has said in the Cornell Chronicle, "Tipping is an interesting behavior because tips are voluntary payments given after services have been rendered. Consumers rarely pay more than necessary for goods and services. Tipping represents a multibillion-dollar exception to this general rule."

[ingridsf]

i wondered afterward if the service charge had contributed to an atmosphere in which servers had stopped trying because they knew upfront that they were guaranteed a certain amount.

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I guess I'm still confused about why being paid for your job, i.e., "guaranteed a certain amount," is considered a disincentive to perform well in one job but not another. My mom was a public school teacher. Truly, if any one profession deserves tips (and needs them!) it's teachers. Yet it would be unthinkable, crass, appealing to the basest motives imaginable, to use MONEY to fuel a teacher's desire to do good work.

[Carrot Top]

I guess I'm still confused about why being paid for your job, i.e., "guaranteed a certain amount," is considered a disincentive to perform well in one job but not another.  My mom was a public school teacher.  Truly, if any one profession deserves tips (and needs them!) it's teachers.  Yet it would be unthinkable, crass, appealing to the basest motives imaginable, to use MONEY to fuel a teacher's desire to do good work.

I know a lot of teachers and a lot of professors. In today's world, they do not disdain money as something crass. Most of them would be very happy to make more and indeed, some of them have either quiet depresssions over the fact that they don't or loud complaints that they don't.

It is a completely different economic environment in reality and in the philosophic sense to most people*now*, than it was before the Eighties hit.

And in the best places, the best restaurants, places like Per Se, money is not the only thing being held out as important to the servers or anyone else there. There is a sense of higher calling (which in this case would be immaculate service and stupendous food. . .choreographed to create a wonder of a moment in a guests mind and heart and memory) being used as incentive. And it is a real thing and a good thing.

Edited August 12, 2005 by Carrot Top (log)

[TPO]

i wondered afterward if the service charge had contributed to an atmosphere in which servers had stopped trying because they knew upfront that they were guaranteed a certain amount.

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I guess I'm still confused about why being paid for your job, i.e., "guaranteed a certain amount," is considered a disincentive to perform well in one job but not another.

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Although it is 20% of sales, it is not a guaranteed amount. If customers find the service unsatisfactory or if the quality of the food slips, the sales will reflect that and wages effectively will go down.

When I think about it, tipping servers is an odd practice. Even if I could wave a few dollar bills at the cashier at the local mega store to make her more pleasant and helpful, I wouldn't. But tipping servers seems to make us feel like we can force people to be nice to us.

[Fat Guy]

That's why I don't understand how proponents of tipping have been allowed to drape themselves in the flag of capitalism and free markets, while I get called a pinko on the irate waiter's blog. I mean, my "neoliberal" credentials are absolutely impeccable (anybody else posting here who writes about food politics for Commentary magazine please raise your hand). You want to go to a seriously capitalistic country, go to Singapore. No tipping. The free market, apparently being defended against pinkos like me by people who think Salma when they hear Hayek, would grind to a halt if all services -- medical, sanitation, electrical, legal -- were put on the gratuity system.

[Carrot Top]

That's why I don't understand how proponents of tipping have been allowed to drape themselves in the flag of capitalism and free markets, while I get called a pinko on the irate waiter's blog.

Hey. Steven. Whether the irate waiters think you are a pinko or not, it is quite likely that they will go out now and spend some of their tip money on your book.

You can be happy about this for the reason that *that* in itself is an exercise of capitalism and free markets that will benefit you and yours. . .or you can be happy that they might read a bit of you and decide that you are not so bad a guy after all. Either way, it is a good thing, no? All's well that ends well.

And if it ends really well, well then write a rap song called "Waiters Call Me Pinko" and sing it all the way to the bank. . .

[ingridsf]

With all due respect to the amount of information about economic trends, healthcare costs, and business accounting present here, I say the real issue at play is far more personal and emotional.

Holly Moore said a while back (I paraphrase) that he likes the sense of control that he feels in tipping. The servers who like tipping probably feel some sense of control over making enough money through tips.

My concern is that this private pleasure translates into unstable income for too many other workers, for reasons that are not within their power to control. (Namely, the caprice of diners who resent tipping in general.) And perhaps that tipping keeps the server position from becoming more of a career than a temporary job in restaurants less exalted than Per Se.