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

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

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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

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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."


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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.


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