Service charge

For takeout orders, do you prefer a mandatory service charge or the ability to tip?

For takeout orders, do you prefer a mandatory service charge or the ability to tip? —Jason L., Clayton

This is a much more complicated question than it seems. Semantics play a role, as do the different percentages involved, as well as why an institution adopted such a policy in the first place.

There are customers who place all service expenses under the same umbrella: for them, a tip is the same thing as a service charge. For the restaurant owner, however, these are completely different terms.

A service charge is most often mandatory, although it can be reduced or even waived if there is a service issue. These dollars are the property of the facility and can be spent or distributed among staff as they wish.

A dot, or gratuity, is by definition voluntary and usually goes directly to the person offering the service. Then the muddy waters. Customers will sometimes see terms such as “tips required”. Tips can be pooled and shared, but only with hourly employees who have direct contact with customers, which keeps kitchen staff away (which for years has been the source of many arguments). wage inequality).

If those are the parameters, then my preference would be to pay a service charge with the option to add a tip. This way the kitchen gets a slice of the pie. And if I feel the service charge is too low, I can leave a surcharge, which goes to the service staff. To me, that’s about as fair an arrangement as the laws currently allow.

However, restaurateurs see the issue of service from different angles and establish policies accordingly. The results are everywhere.

At Elmwood, which is currently only open for pickup and delivery, co-owners Chris Kelling and Adam Altnether have opted to add a 19% service charge to all orders. “We thought people would perceive 20% as just too high, kind of like $19.95 seems less than $20,” Kelling explains, “so we went with 19.” Fees cannot be changed and no additional money can be added; it’s “a function of the online ordering platform, not of us,” he notes. “In a perfect world, we would have a tab, so the guest could add something extra.” Kelling says the service fee (he calls it “service included”) allows Elmwood to pay its staff “like the professionals they are.

“Our business is down 90%,” Kelling says, “and our team can’t live on 10% of normal volume.” Kelling says he and Altnether have assembled “a strong team, all of which provide top-notch service, and we want to keep them,” he adds. “Our goal was simply to break even until we could safely open the restaurant. The included service charge allows us to do all of that.

At Grace Meat + Three, the online ordering page says a “10% free is set for all online orders,” with the option to “opt out or opt for more,” says chef Rick Lewis, owner of the restaurant with his wife, Élisa. “Even that percentage is completely discretionary,” he says. For Lewis, the 10% is “more of a reminder. People don’t want to be told to tip, say, 20%, although they often end up tipping that much anyway. I end up answering more questions about how much to tip than how not to tip. At Grace, staff are paid minimum wage or more, and tips are distributed fairly. “The system works for us,” says Lewis. “It adds to the camaraderie.”

Brant Baldanza is Managing Partner of OG Hospitality Group, which operates three restaurant concepts: The Corner Pub & Grill, The Shack and The Tavern Kitchen & Bar. Taking a unique approach, the partners have implemented different service fee policies for the respective concepts, each approved by their respective employees.

“The Shack is so reliant on indoor dining that we closed it completely when in-person dining was discontinued,” Baldanza says. “Curbside pickup is such a small percentage of sales that we charge 5% just to cover the cost of the upgraded takeout materials we’ve invested in: boxes, bags, plastic cutlery, etc. At Corner [Pub & Grill], we need two or three more people per shift to keep up with demand, so we’re adding 20% ​​to help cover that cost. Just like at The Shack, customers can add to this amount if they wish. The tavern is a different animal. There, tips pretty much take care of themselves without any nudge from us.

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