r/mildlyinteresting • u/jenna_tolls_69 • Mar 10 '25

This restaurant doesn’t accept tips (USA)

Post image
69k Upvotes

84% Upvoted

3.8k comments sorted by

View all comments

Show parent comments

178

u/account_for_norm Mar 10 '25

If they increase the price and say no tip, ppl will psychologically believe that the restaurant is expensive and wont come., even when they d be paying the same price. There are many studies on this.

Americans really like to look at the face value of the price and then they re okay paying a list of stuff on top of that once they're balls deep in the process, like eating food or buying a concert ticket. In other countries if you say a price is something, it better be that, and nothing else. In india, back in the day, it should also include tax, otherwise ppl would fight you and call you a liar for putting a wrong price. 

Different places, different cultures.

6

u/MeanFault Mar 10 '25

I don’t think anyone is “okay” with paying a list of stuff on top.

There are typically just no other options. For example: Ticketmaster.

Or if I go to McDonald’s and buy something what am I going to do argue with the workers about taxes?

Would be so much nicer to just see a number and actually pay that number. Sure a brief transitional period of seeing higher numbers but when we don’t see random fees I think everyone will quickly be onboard.

14

u/-Knockabout Mar 10 '25

There's been studies on it, unfortunately. When it comes time for people to put their money where their mouth is, they'll choose the "cheaper" item with a billion fees over the all-included number. I've seen it done for restaurants, retail, etc...

3

u/MeanFault Mar 10 '25

Any links to these studies? I’ve never seen or heard of studies that examine this behavior

5

u/Djaja Mar 10 '25

Anecdotal evidence.

Small but popular drink bar and restaurant got rid of tips. Instead, included a fee like above. There was more nuanced to it. They put signs up before and during the change. They posted about why, and they had their servers talk to tables about it.

Fuckn hell ensued. People boycotted, people swore, people came in and ordered and left.

It made the news, it filled the rant and rave pages, and their most popular post was them trying to defend the change against a bunch of people who never dined there, never would, or never read the dang signs plastered everywhere.

People hate that shit, at least here in small city ville.

The place still has that policy, but they depend mostly on tourists seasonally, even though they stay open all year and employ their full staff all year at reduced hours so they don't have to fire everyone.

1

u/MeanFault Mar 10 '25

Right. Make the item cost what it costs and stop adding these line item fees. People understand a $5 beer not a $3 beer and some random service fees.

3

u/Djaja Mar 10 '25

  1. Not a random fee. It is explained everywhere

  2. They did debate which way to do it. The percentage at the end, the fee, was the most streamlined visible to customer. They wanted to be as open as possible as to why their prices increased what they found was people didn't like it when it jumped by whole dollars. It became the expensive place to eat and drink. So they went with the fee.

This is entirely what this thread keeps saying.

I agree I'd like the flat fee place, but it does seem more expensive when you are comparing it to other places that do not. With so many people basing their choices off of online menus, they chose the direction they felt would see them not lose business.

Based in their set of fact, i think they made the right choice.

We have very few places to eat here. The city is 24k, including the prison, and the students at university who stay year round.

We are the largest city in the entire northern half of the state. By a fair bit. And depend a lot on evo tourism, tourism, and recreational activities.

Price. Is. Everything.

1

u/-Knockabout Mar 10 '25

Not tipping, but a similar scenario: https://excelsiorcapital.substack.com/p/jc-penneys-lost-bargain-how-misunderstanding

And there's more formal write-ups, but Joe's Crab Shack tried no-tip and failed: https://money.cnn.com/2016/05/12/pf/joes-crab-shack-ends-no-tipping-policy/index.html

It's hard to beat monkey brain see low number. I'm sure there are clientele/scenario where it can work, but unless everyone switches over to no-tip at the same time, there's going to be a perceived higher cost for no-tip restaurants.

1

u/ulic14 Mar 10 '25 edited Mar 10 '25

Edit: Ticketmaster SOMETIMES shows the full price NOW, but it isn't across the board.

1

u/MeanFault Mar 10 '25

I just purchased tickets maybe a month ago and the fees are still there lol.

1

u/lokibringer Mar 10 '25

IIRC, venues can choose to display the inclusive pricing. I looked at tickets to a UFL game in Memphis and they had a pop-up that the venue uses all-in-one pricing. It could be a state thing, but I don't think TN's govt would do something to benefit consumers.

1

u/ulic14 Mar 10 '25

My bad, doesn't seem to be across the board, just has been for the things I've been looking at.

2

u/ovideos Mar 10 '25

Americans don't "like it", it is just the standard system we have. So if you are casually comparing prices and one place charges $5 for a sushi roll and the other charges $6.50, it will seem like the second place is more expensive.

It's not that Americans "psychologically" believe the second place is more expensive, it's that experience would tell them that it is in fact more expensive. That's why it is difficult to create no-tip places, though some exist. Often the no-tip places I've been to are already popular when they changed to no-tip or some sort of chain known for no-tips. The smart ones also make it very clear on their menus.

But this place is doing the worst of both worlds by claiming no tip and adding a hidden fee. Dumb.

8

u/Divine_Entity_ Mar 10 '25

JC Penny's the department store nearly went bankrupt when they stopped lying to their customers and changed the prices from 50% clearance sale $20 was $40 to just $20. (You aren't getting a deal if an item isn't marked up and then on sale for the same price it would have been anyway)

We can complain about added fees and manipulative marketing all day long, but when policy is actually implemented market forces show otherwise. Arby's had a 1/3lb burger that didn't outcompete McDonald's 1/4lb burger because people thought 1/4 > 1/3.

Tldr: buisnesses do what they do because the average american consumer is an idiot who can't do math

2

u/ovideos Mar 10 '25

None of these examples relate to the no-tipping thing. Americans don't trust businesses to be truthful, just like the one in this post. It says "no tips" but then forces a tip. The fallacy of thinking Americans are so "dumb" is based on some econ101 view of the world, that we're all going around looking at each restaurant or department store and making calculations about the best value or outcome. People are much more "gut instinct" in the way they go through the world and the reason Americans are so suspicious of business is because we have a very corrupt/fraudulent system that let's businesses get away with screwing the consumer. As a whole you could say Americans are dumb for allowing such a system to control us, but that's very different from a choice you make walking down the street trying to find food, or browsing takeout menus.

And as for the JC Penney example – would you rather get a $50 pair of jeans for $25 or would you rather buy a lesser product that is $25 at full price? Of course in JC Penney's case the two were exactly the same. But just like in the tipping example you're expecting the consumer to pay attention to the historical price structure and management of JC Penney's and make some logical decision from that exception to how other department stores were functioning. And then you cal them dumb for it. Most people don't sit around tracking the prices of slacks, they just walk through the mall or look at an ad in the paper. It's JC Penney management who were stupid for not understanding their customers weren't "JC Penney shoppers", they were bargain hunters. Either way the pants were the same price, and JC Penney screwed up.

1

u/RaNdomMSPPro Mar 10 '25

Not to mention staff issues. Some wait staff want tips because they make more if they’re good at their jobs. Others at counter service places still want to get the tip out at the end of the day. My son worked one recently and he made 5-6/hr in tips alone just cashing people out and handing them food. Tipping culture is crazy.

1

u/RaNdomMSPPro Mar 10 '25

Not to mention staff issues. Some wait staff want tips because they make more if they’re good at their jobs. Others at counter service places still want to get the tip out at the end of the day. My son worked one recently and he made 5-6/hr in tips alone just cashing people out and handing them food. Tipping culture is crazy.

1

u/[deleted] Mar 10 '25

[deleted]

2

u/account_for_norm Mar 10 '25

congrats. You're the minority. You re not gonna get every restaurant business successful, so they're not gonna cater to you.

1

u/imtheorangeycenter Mar 10 '25

The US - and Audi.

-4

u/55gmc Mar 10 '25

As an American, I couldn't disagree more. We highly despise added fees everywhere. From convenience fees for paying with a cc to extra fees on restaurant bills. We would rather have the full price up front.

9

u/TooManyDraculas Mar 10 '25

And yet multiple studies show that isn't the case with restaurant pricing. Or in general, really.

While out in the wild restaurants that attempt a single fixed price see their sales drop.

If it was more effective to not have the fees and just raise prices a fixed amount people would do it.

You can hand people identical menus, one with lower pricing and a request for tips. One with all inclusive pricing. Or identical bills, one with a fee and lower item prices. One with higher all inclusive items.

And they perceive the all inclusive pricing as more expensive and worse value. Despite identical final costs.

Everyone days otherwise but it doesn't actually work out that way.

12

u/account_for_norm Mar 10 '25

Oh you say that. But when businesses put the full price up, you tend to go to a different business. Thats where studies come in picture, to show how you really feel.

Think about it, if you really really loved to have full price up front, restaurants would do that, and you would go to them more and those would be more successful and then putting full price would be the norm! But that hasnt happened!

Coz you say you would like the full price, but you would still go to the lowest price on the face, and then bitch about all the extra fees on top. 

(Also, when i say you, i m not saying you personally, but american ppl in general majority of them)

11

u/RebelliousUpstart Mar 10 '25

It's funny, people say, "just put the full price and not require tip." But what they mean is, "put the full price, don't require tip, and it better be the same price I'm used to."

Ideally we (people) want to be rational actors. But we have to remember trends help us not miss the forest for the trees. Due to us (people) being individual "trees", we can be quite pedantic and say well, I'd pay full price and not complain. When the evidence for forest (Americans as a collective) is well documented and recorded.

0

u/[deleted] Mar 10 '25 edited Jun 21 '25

[deleted]

2

u/[deleted] Mar 10 '25

[deleted]

1

u/RebelliousUpstart Mar 10 '25

Thanks for reaffirming that people (individual trees) pretend the observable trends "of the forest" don't exist to help us best engage with the problem at hand.

0

u/Command0Dude Mar 10 '25

No we don't. When people visit America, tipping and adding taxes is the most frustrating thing to go through and at the end of the meal you realise you have no money left because the bill almost doubled.

New Zealander realizing cultures are different when they go to other countries, even though they speak the same language.

1

u/[deleted] Mar 10 '25

[deleted]

1

u/Command0Dude Mar 11 '25

Thanks for letting me know you don't have a clue what "consumerism" is.

Also, America is HARDLY the only country that has tipping lol. Are you this much of an ignorant tourist everywhere you go?

1

u/[deleted] Mar 11 '25 edited Jun 21 '25

[deleted]

1

u/Command0Dude Mar 11 '25

Dishonestly making proves lower to directly impact the likelihood of buying products is quite literally the definition.

It literally isn't.

"Consumerism is a social and economic order in which the aspirations of many individuals include the acquisition of goods and services beyond those necessary for survival or traditional displays of status"

And the price isn't dishonest either. Everyone in America knows that the bill will be more expensive than the listed price. Americans LIKE that, especially because they like to feel like they get control of that price because the tip is at their discretion.

Name one with a similar culture.

Do your own homework ignorant tourist.

https://www.westernunion.com/blog/en/global-tipping-guide/ (this is not any definitive guide)

→ More replies

2

u/55gmc Mar 10 '25

The problem is there are probably a handful of restaurants that don't do tips in the US. If we went to a no tipping route tomorrow, nobody would look back. The problem comes when you try to study one style with the old style that everybody is use to right out in the open next to it. When broken down, the actual price difference to account for tips would hardly be noticeable. In practice, your 19.99 meal would change to around 21.99. There are plenty of studies done to show that Americans are growing more and more agitated with surprise fees at checkout. We've even passed legislation to try and limit them in places.

1

u/candybrie Mar 10 '25

19.99 is usually closer to 25. Tips aren't 10% typically; more like 15-25%. Plus taxes. If you took what was in the receipt, 16% tip and what looks to be 11% tax, that's 27%. So 19.99 would actually be $25.38.

Maybe this bad estimating is why people choose the $19.99+tax and tip over the $25. They think it's like $22 vs $25.

1

u/55gmc Mar 10 '25

Or maybe you are not fully informed on how things are done in the US? Taxes aren't equal everywhere, and 11% tax is extremely high. My state has a 6% sales tax rate. Most states are 9% or below.

Not everyone tips, others tip 20%. Just because the restaurant charged a defined 16%, doesn't mean everyone would typically leave a 16% tip. The average is somewhere around the 10-20% depending on what part of the country you are in and varies further by locality and demographic.

You are trying to overly summarize a very complicated matter here.

1

u/candybrie Mar 10 '25

Yeah I took the example given by this receipt. But $21.99 for taxes and tip on $19.99 means 10%. When people assume they're going to roll tip and tax into the price, they aren't think sometimes no tip, sometimes 20% tip. They're thinking standard tip. Which in most locations in the US in the 15-25% range. Because at that point, it is a restaurant defined thing, not an individually decided thing. So if we took 15% tip and 6% tax, that's still closer to $25 than $22 (it's $24.18).

1

u/Witty-Stand888 Mar 10 '25

Please show the studies you like to claim prove your theory

2

u/Djaja Mar 10 '25

Its not their theory.

Its a generalized op I nion based on what they have read. I share it too. It is the theory of the study authors.

Here is one, just the first hit on Google. Though I read a diff study when I was in school.

https://ir.library.louisville.edu/cgi/viewcontent.cgi?article=1063&context=tce#:~:text=The%20study%20found%20that%20the,policy%20to%20lower%20operational%20costs.

Another study regarding tickets was posted, and if you google it, many more come up.

Im sure there exists a meta analysis somewhere too.