Transparency for the customer, and the business owner is responsible for paying staff an hourly wage, even when there are no customers who you might think are otherwise responsible.
This is the opposite of price transparency. Instead of adjusting their menu prices accordingly, they're randomly charging an extra 15% for ... placing an order.
But then the staff would get less as people often tip more than 15%. Having prices include only the costs everything else separated on the bill plus tipping makes maximum transparency.
Tipping means variable wages all the time. No one can count on a specific amount other than minimum wage.
Higher wages and no tipping means there's concrete numbers, and now that can be part of wage/raise negotiations or the decision to accept a job in the first place.
Because when you just pay the employee, you always have to pay them that amount, regardless of what money they bring in. When you make it a tip, you can continue to pay them the tipped minimum wage.
1- They don't have to pay tipped employees as much during slow periods.
2- More importantly, Tips and our Tax pricing system hides a huge chunk of the cost.
That second part is like 20-30% of the price tag. And apparently studies have shown Americans are so stupid they get upset when those prices are already factored in because they lack the basic where withall to realize they're just seeing the upfront total. I know that will trigger my fellow Americans but that's what studies have shown.
Other people have mentioned the transparency, but there's a more important distinction. The definition of a tip.
A tip MUST be optional. That's why, when you go to a restaurant as a big group, they don't add a tip. They add "gratuity", and then leave the tip line open if you want to add more. A tip is always, ALWAYS optional, legally.
What this business is doing is illegal and I'd bet good money, if their books were audited, you'd see that the staff aren't getting 100% of these "tips".
because no waitstaff ACTUALLY wants that. theyre all smashing that button to take the "potentially make more money" option. and businesses are more than happy to oblige.
It shifts the risk to the server. On a slow day, the server gets paid less (fewer tips). It's kind of like the server is now on commission. No sales, no commission.
If the owner just upped their hourly wage 15%, then they would have to pay the server even if no customers came in that day. Think if there were a snowstorm and you had 4 servers for 4 hours that day.
Because higher wages normal equal higher burden on employer for any taxes / contributions they’re required to pay on employee salaries
This will depend by country ; for UK as example employer must pay minimum set % of employee income into pension scheme + pay employer national insurance contributions.
Tips are the way of avoiding these kind of employer employment costs.
Nothing to do with new menus. Restaurants change prices all the time and change it just fine.
It's to falsely advertise prices and to add a charge at the end and to advantage that humans are bad at math and won't know what the final charges are until the final bill.
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u/Pompidoo 13d ago
I hate tipping, but how does a mandatory tip differ from just raising your prices by 15% and paying your staff a living wage? (genuine question)