Joe's Crab Shack is the first major chain to test a ban on tipping. So far, so good.
Here's another reason to go 'Eat at Joe's.'
If you ask Raymond Blanchette, there's something fishy about the modern-day restaurant dining experience.
To Blanchette, the CEO of Ignite Restaurant Group, which owns Joe's Crab Shack, it has nothing to do with the food on your plate.
It's this whole idea of tipping. It's just "antiquated," according to him. And that's why his crab shacks might be kicking tipping to the curb for good.
Joe's Crab Shack is testing a new no-tipping policy in many of its restaurants — the first time a major chain has done so.
Blanchette, who announced the news during an earnings call last week, said the testing has been underway throughout the past few months at 18 Joe's locations.
At those locations, instead of having to rely on the generosity of customers, wages for servers, hosts, and bartenders will be upped to about $14 an hour (an improvement over the previous system in which servers were paid roughly $2 an hour, plus tips), with performance playing a factor in the exact rate, according to Restaurant Business.
Although tracking national data on tipping is a tough task, evidence suggests that $14 an hour is substantially higher than what many servers rake in when they rely on the kindness of strangers for their income.
It's a "forward-thinking" policy that won't just benefit workers, according to Blanchette — it'll boost business, too.
"It's expected to result in an improved team atmosphere, a significant reduction in [employee] turnover, and greater financial security for the employees," Blanchette said, as CNBC reported.
Essentially, a win-win.
In order to accommodate the wage increase, the restaurant is increasing menu prices ever so slightly — about 12% to 15%. But don't fret, frugal diners! Those increases are still less than 20% (the standard expected tipping percentage for fair-minded tippers), somany customers will actually end up paying less for their overall dining experience under the new model.
Some people have voiced concerns over this new tip-free system on the basis that it will hurt good customer service.
But there's good reason to believe that's simply not the case.
"Quality of service has a laughably small impact on tip size," as Brian Palmer wrote for Slate back in 2013. He noted a study that found a diner's evaluation of the quality of their service only accounted for somewhere between 1% and 5% of the variation in tip amount.
Factors that do have a sizable impact on tip size? If customers use a credit card or if they pay with cash (credit card users dish out more dough to their servers). If customers are part of a larger dining party or a smaller one (bigger tables have a tendency to leave disproportionately smaller tips).
Even a server simply mentioning their name to diners has a bigger impact on tip size than the overall quality of service, Palmer wrote. So the argument that we should keep tipping around for the sake of good service doesn't realllly hold up when you think about it.
So far, it seems like the no-tipping model at Joe's is working out great.
"Though we're still in the test phase, we are already receiving very positive feedback from our guests, both anecdotally and in our service scores," Blanchette said, as WPXI reported. "Our staff has also embraced the change, which is important as we seek to implement the new policy across the system over time."
Now I can dunk my crab legs in butter knowing my patronage is going toward fair wages. That's certainly all the more reason for me to "Eat at Joe's."