Experiment over: Two Minnesota restaurants end their 'no-tipping' policy

While banning tipping has grown more popular in the past year, it hasn't panned out for everyone. Two Minneapolis restaurants have recently ended their no-tipping experiment.

Upton 43 and Victory 44 have been operating under a no-tipping policy for the past few months. Upton 43 opened with a no-tipping policy while Victory 44 raised it's prices 18%-20% to offset the cost. Chef/owner Erick Harcey said he did it in an effort to create a more stable income for his employees -- both front and back of the house. 

Though the restaurants have gone back to the traditional tipping system, spokesmen for the venues say that the program didn't fail and that they're more than happy to go back to no-tipping once it becomes more mainstream.

Nothing went wrong, it was an experiment. It helped us build a strong, unified and supportive service staff that works as a team. As the restaurant industry grows and progresses into no tipping as a general practice, we will be ready to implement the structure again.
— Josef Harris, Upton 43 and Victory 44 spokesperson

Harris also said that guests were completely on-board with the no-tipping policy. He added that they "had more problems with people wanting to leave a higher tip than the included 18 percent." The restaurant's staff was also on board and both restaurants didn't have a single server leave during the experiment.

According to Minnesota Monthly, however, Upton 43 and Victory 44 servers didn't like what they perceived was a pay cut. Upton hired servers at $18/hour and then gave raises based on experience and performance. The servers, however, were too used to getting nightly paychecks and the top servers could make more money in just a few days than a full-time work week, according to blogger Jason Derusha.

[The] servers had grown used to getting paid nightly, and the good ones were able to command the best shifts. Making $40/hour is not uncommon, and servers can make this without working a full 40-hour work week. They want to work three days and kill it every day.
— Jason Derusha, Minnesota Monthly writer

Another interesting side symptom of the no tipping model was that there was "no desired shifts" among the servers and that each shift was "equally valued," Harcey said.

The math to achieve the no tipping model was the biggest obstacle for Upton 43 and Victory 44. Raising prices 18% wasn't enough to pay their staff what leadership wanted to. The restaurants would've had to price entrees in the $35 - $45 range to properly offset costs.

Where we were challenged was that if we were to stay competitive (price wise) we wouldn’t have been able to continue the no tipping model. We would have priced ourselves right out of the market
— Josef Harris

Wages for back of the house staff hasn't changed since going back to the tipping system.

So it was not a failure in terms of equalling front/back of house income and staff retention, but it also sounds like it was a bit of a failure in terms of keeping up enough business to keep this new model going. If the restaurants were doing well enough with the experiment, no doubt they would have continued their no-tipping policy.

 

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