American Restaurants Are Finally Leaning Into This Awesome Worldwide Practice

by N/A, 10 years ago | 2 min read

"Eat at Joe's" now has a more meaningful rationale behind it, rather than just being a marketing term. The seafood restaurant chain Joe's Crab Shack is planning to to phase out the process of tipping the wait staff in a move that will benefit the customer and the employees as well.

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Here's how this whole thing breaks down: waiters are typically paid a measly $2.13/hour, obviously, before tips, but they never truly know how much those tips are going to be–i.e. some people are stiff.

So, Joe's plans to start wait staff out at a rate of $14/hr., an obvious increase in their hourly rate that's guaranteed money that will come in (what a relief for them).

How does Joe's Crab Shack plan to make-up for the increase in wages on their end? Pretty simple: raising the menu prices by 12-15%.

That's actually a pretty slight increase that you might not otherwise notice if it wasn't being reported. In fact, executives at Joe's Parent company Ignite Restaurant Group, think this price increase will save seafood patrons money in the end.

If a happy customer that generally feels inclined to tip 20%, a pretty standard rate for good service, the total on their new bill at Joe's would be less.

The price increase would look something like a bucket of snow crabs now goes for $24.99, but under the new no-tipping system it would cost $28.74. That's nothing for customers, and yet the end result is so great for the wait staff.

Ignite CEO Ray Blanchette explained to Restaurant Business:

"We’re really leading in our industry with regards to national brand going out and testing this thing in a meaningful way. So we want to be somewhat cautious."

The company is entering a period of testing for this new system at select locations with most of the rest of the chain rolling it out as the new year comes. The idea is also thought to decrease wait staff turnover, because, well, the money is more consistent and reliable.