ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / ECONOMY & WORK

Check out the Reason why a Restaurant Chain Decided to do Away With Service Charge

The Housepitality Family Restaurant Group plans to eliminate its service fee, believing it could yield positive outcomes.
PUBLISHED FEB 14, 2024
Cover Image Source: istockphoto | Photo by Igor Vershinsky
Cover Image Source: istockphoto | Photo by Igor Vershinsky

Tipping has been crucial for the overall income of the staff at eateries and hotels, and leaving tips is considered as essential part of consumer etiquette. But in recent times, charges like service fees have been added to bills, which discourage a lot of people from leaving tips for better service. In a move to enhance customer experience while embracing a familiar tradition, several restaurants have decided to eliminate their 20% service fee and revert to the traditional tipping model. Paige Healy, a representative from the Housepitality Family Restaurant Group, expressed optimism about this change, stating, "We’re hoping that it increases the guest experience and increases the service connection to the table they are serving."


 
 
 
 
 
View this post on Instagram
 
 
 
 
 
 
 
 
 
 
 

A post shared by #GrowWithTheFam (@housepitality_family)


 

Healy explained the reason behind the initial implementation of the service fee, highlighting the uncertain and challenging circumstances faced by the restaurant industry during the pandemic. "What we ended up doing is putting on a 20% automatic service fee so that we can guarantee a livable wage to every staff member we had on. It was a very scary time," she explained.

However, with the gradual return to pre-pandemic workstyle and changing consumer sentiments, the restaurant group decided to embrace the traditional tipping system once again.

In recent times, the implementation of mandatory service fees has already been causing outrage among customers who think it's unfair to levy additional charges on them. Many organizations in the service sector are already in hot waters for implementing this rule.

Money in a tip jar | Getty Images | Photo by Robert Alexander
Image Source: Getty Images | Photo by Robert Alexander

The Housepitality Family Restaurant Group, which has adopted this practice, owns popular establishments such as Boathouse locations, Casa Del Barco outlets, and Island Shrimp Company restaurants. Regarding the strategic move, Healy said, "With the tip service, we are going to be able to actually have a better environment for the staff now that we know the guests will be coming in."



 

A Pew survey conducted last fall found that 72% of respondents opposed service fees, with 50% expressing strong opposition.

Michaela Johnson, a server at one of Casa Del Barco's locations, shared her perspective on the move. While acknowledging the stability provided by the service fee, she expressed enthusiasm for the potential earnings flexibility associated with tipping. "I would have a flat rate, but going back to tip-based means if it is busier, I have more time to maximize what I’m making in a 4-5 hour shift," she explained.

Tipping Jar | Pexels | Miguel Á. Padriñán
Image Source: Pexels | Photo by Miguel Á. Padriñán

Despite the benefits of consistent paychecks facilitated by service fees, the return to tipping presents opportunities for servers to capitalize on busier periods and maximize earnings. A report from the Times-Dispatch highlighted the impact of service fees on hourly wages for servers, with some experiencing significant increases. However, as seasonal fluctuations bring forth opportunities for higher earnings through tips, servers like Johnson remain optimistic about the transition.

Healy also emphasized the importance of creating an engaging and interactive dining experience through the traditional tipping model. "So we want to change our service back to that comfortable and exciting, and I think even maximizing experience where you have that server and the table, and you guys are interacting for a tipped experience," she stated.

MORE ON MARKET REALIST
The guest had an item that was presumably made in the pre-1800s era, which made it valuable.
21 hours ago
She had asked for $250,000 when she came and she walked away with close to $400,000.
1 day ago
The showrunners must have had a storm on their hands when they were called out.
1 day ago
Steve Harvey burst out laughing when he heard that answer, as was the case in much of the round.
1 day ago
The guest wanted more than $3,000 for the item but the expert crushed his hopes.
2 days ago
The game even had a twist which saw Drew Carey doing something special for the contestant.
2 days ago
One had to pay attention to catch the error, and the show has a lot of fans like that.
2 days ago
The contestant's nonchalant behavior after answering left everyone on the show stunned.
2 days ago
The host was left red-faced and he even apologized to the contestant later on for his actions.
3 days ago
The guest was not expecting the low valuation of his item given by the expert.
3 days ago
The host perhaps did not expect to hear that answer and was left impressed.
3 days ago
The contestant was over the moon with her victory, which she made look quite easy.
4 days ago
The guest could do nothing more than accept his bad luck, and that is exactly what he did.
4 days ago
The host had his head down and could not even look at the board as the answer was revealed.
4 days ago
Almost all of the answers given were either shocking or hilarious, or both.
5 days ago
The pawn shop owner had doubts about the beverage's condition and was proven right.
5 days ago
The pawn shop owner has always been a big fan of WWII memorabilia and this was no different.
6 days ago
The contestant turned to the audience for help and it paid massive dividends.
6 days ago
None of the three contestants wagered anything in the final round, which was a first.
6 days ago
Cuban was excited to try them on and did a good job despite not having too much experience.
6 days ago