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On Tipping

Moneyblog1The evolving debate over the custom of tipping often plays out in major cities facing $15/hour pay mandates. So, it's refreshing to see a restaurant in tiny Delta WI get international exposure through a Skift piece on the evolution of the practice.

Realizing that servers could, on a great weekend, walk away with $400/night during peak season (while line cookies wouldn't break $100), Delta Diner's Todd Bucher said no mas. And, he added the tip to the bill.

There was no discernable push back from customers because, in the end, they didn't feel a financial hit on the final bill.

Bucher expects a 30 to 40 percent growth in revenues within five years after eliminating tipping. He says staff turnover is down dramatically and he expects his once 5 percent profit margin will eventually hit 13 to 15 percent with this new operational structure.

So worth a read.

 

         

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Bill Geist

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