'What you see is what you pay' - why some US restaurants are banning tips

"What you see is what you pay" is the motto of a growing number of US restaurants that are eliminating tipping. Caroline Kraetzer, a wine waiter, is one such beneficiary; her salary has doubled.

Kraetzer now earns $40 (£30) an hour, which is twice the typical wage for service staff in San Francisco. This higher pay is possible because her restaurant, La Cigale, charges a fixed price of $140 (£100) per person. La Cigale is among a small group of establishments that have raised menu prices to support higher salaries and explicitly prohibit tipping. Their message to customers is clear: "What you see is what you pay. We do not accept tips, your kind words and return visits will suffice."

Kraetzer appreciates no longer being "reliant on the generosity of strangers to pay the bills." She notes that while tipped staff at other restaurants can earn a lot, they often work unpaid hours before and after service, making only minimum wage during those times.

On the East Coast, Rachel Miller, chef and owner of Nightshade Noodle Bar in Lynn, Massachusetts, adopted a tip-free model five years ago when her French-Vietnamese restaurant reopened after the Covid-19 pandemic. Her primary motivation was to create a fairer system for her kitchen staff.

Miller observed that "The people breaking their backs and minds in the kitchen – often the least visible and the least celebrated – were taking home a fraction of what the front staff made on tips for the same hours." She also found it "deeply unsettling" that white male staff often received higher tips than others. "Tipping lets guests, consciously or not, pay people differently based on gender, race, or sexuality and I was not willing to let that decide my team's income," Miller stated.

To fund higher wages, Miller increased prices at Nightshade Noodle Bar. Tasting menus now start at $102 for seven courses before 6 pm, and $126 for nine courses. Miller explains, "Our prices are higher than a comparable restaurant's because they carry the full cost of paying people properly. That is the trade, and I stand behind it."

However, not all restaurants that have transitioned to a tipless model have succeeded, as customers sometimes balk at the increased menu prices. Talulla in Cambridge, Massachusetts, eliminated tips in 2020 to ensure more equitable pay but reverted to a tipping model in September of the previous year. Co-owner Danielle Ayer explained, "We tried to keep our non-tipping model simply by raising our menu prices 23%, but we were only able to sustain this through the winter months." Ayer added that "Operating a non-tipped restaurant is more expensive overall." This is because tips are not considered part of a restaurant's revenue, whereas higher menu prices are, leading to increased sales tax obligations.

William Michael Lynn, a professor of food and beverage management at Cornell University and author of *The Psychology of Tipping*, suggests that the main hurdle for tip-free establishments is customers' difficulty in grasping the financial implications. "Higher menu prices make dining out seem more expensive because people do not adequately take into account that they are no longer tipping," he said, which "leads to lower demand."

In New York, Dirt Candy, a vegetarian restaurant, was an early adopter of the no-tipping policy in 2015. Chef and owner Amanda Cohen, who now pays her staff about $30 an hour, aimed to "make it more equal for everybody." She notes that many customers "are pleasantly surprised when they realise they don't have to tip 20% on top."

Filmmaker Cassidy Van der Kamp's YouTube documentary *Tipless* was inspired by her own experience working at a tip-free restaurant in Oakland, California. While some servers left, Van der Kamp, who initially earned about $10 an hour plus tips, stayed and saw her hourly wage increase to $21 after the change. "I had stability for the first time as I knew what I was earning… and I didn't need to look at a low tip and think what did I do wrong?" she recounted.

Despite positive experiences like Van der Kamp's, Lynn points out that a significant challenge of moving to a gratuity-free system is attracting and retaining waiting staff who prefer earning tips.

Nevertheless, with the rise of "tipping fatigue"—a growing annoyance among people regarding high tips—the question remains whether more restaurants will abandon the practice. Lynn believes that "Despite tip-fatigue, I do not think tipping is going to be eliminated on widescale anytime soon because the economic disadvantages of eliminating tipping outweigh the advantages."

Back at Nightshade Noodle Bar, Miller remains confident in her decision. "The clearest measure is that staff stay," she said. "Turnover in this industry is brutal, and we have people who have been here since we made the change. It has proven to be highly valued by my guests and team."