For takeout orders, do you prefer a mandatory service charge or the option to tip? —Jason L., Clayton
This is a much more complicated question than it sounds. Semantics plays a part, as do the various percentages involved, as well as the reasons that an establishment adopted such a policy in the first place.
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There are patrons who put any expenditure for service under the same umbrella: To them, a tip is the same thing as a service charge. To the restaurant owner, however, they are completely different terms.
A service charge is most often mandatory, although it can be reduced or even waived if there are service issues. Those dollars are the property of the establishment that can be spent or allocated among the staff any way it wishes.
A tip, or gratuity, is by definition voluntary and usually goes directly to the person offering the service. Then the waters muddy. Patrons will occasionally see notations such as “mandatory gratuities.” Tips can be pooled and shared but only with hourly employees who have direct customer contact, which keeps the kitchen staff out of the mix (which for years has been the source of many a wage inequity arguments).
If those are the parameters, then my preference would be to pay a service charge with the option to add a gratuity. That way, the kitchen gets a share of the pie. And if I feel that the service charge is too low, then I can leave a supplement, which goes to the service staff. To me, that’s about as equitable an arrangement as laws currently allow.
Restaurateurs see the service issue through different perspectives, however, and set policies accordingly. The results are all across the board.
At Elmwood, which is currently open for pickup and delivery only, co-owners Chris Kelling and Adam Altnether chose to add a 19 percent service charge to all orders. “We felt that people would perceive 20 percent as just too high, much like $19.95 seems less than $20,” Kelling says, “so we went with 19.” The fee cannot be altered, nor can any additional money be added; that’s “a function of the online ordering platform, not us,” he notes. “In a perfect world, we would have a tab, so the guest could add something extra.” Kelling says the service charge (he calls it “service included”) allows Elmwood to pay its staff “as the professionals they are.
“Our business is down 90 percent,” Kelling says, “and our team cannot live on 10 percent of normal volume.” Kelling says he and Altnether have assembled “a solid team, who all provide a high level of service, and we want to keep them,” he adds. “Our goal was just to break even until we can safely open the restaurant. The service-included fee allows us to do all that.”
At Grace Meat + Three, the online ordering page states that a “10 percent gratuity is set to all online orders,” with the option to “opt out or opt in for more,” says chef Rick Lewis, who owns the restaurant with his wife, Elisa. “Even that percentage is totally discretionary,” he says. To Lewis, the 10 percent is “more of a reminder. People don’t want to be told to tip, say, 20 percent, although they often end up tipping that much anyway. I end up fielding more questions on how much to tip than how to not tip.” At Grace, the staff gets paid minimum wage or higher, and tips are spilt equitably. “The system works for us,” Lewis says. “It adds to the camaraderie.”
Brant Baldanza is managing partner for OG Hospitality Group, which operates three restaurant concepts: The Corner Pub & Grill, The Shack, and The Tavern Kitchen & Bar. Taking a one-size-doesn’t-fit-all approach, the partners implemented different service-charge policies for the respective concepts, each approved by its respective employees.
“The Shack is so dependent on indoor dining that we closed it completely when in-person dining was interrupted,” Baldanza says. “Curbside pickup accounts for such a small percentage of sales there that we charge 5 percent just to cover the cost of the upgraded to-go materials we invested in: the boxes, bags, plastic flatware, etc. At Corner [Pub & Grill], we need two or three more people per shift to keep up with demand, so we add 20 percent to help cover that cost. Just like at The Shack, customers can add to that amount if they would like. The Tavern is a different animal. There, the tips pretty much take care of themselves with no nudging from us.”
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