According to a Cornell University study, restaurant servers are overpaid due to conventional tipping practices. One solution is for restaurants to convert to no-tip menu pricing, but are consumers ready to see significantly higher prices in print? The Digital Restaurant recommends to restaurants the “run, grow, transform” model of doing business. Specifically, focus on daily operations, increase foot traffic, and be flexible to always meet your customers’ needs. Prices at restaurants are up 2.6% this year. Starbucks has gone public via Facebook with their increases. While customers don’t like higher prices, the average bill has only gone up about 1%.

Key Takeaways:

• Servers are overpaid by traditional tipping practices, though many servers would disagree, and this puts the front and back of the house on unequal footing.
• Keep this rule of thumb in mind to help you build your business: run, grow, transform. Also, know your customers needs.
• Restaurant prices are up 2.6 percent over last year. Starbucks has had price increases for three straight years in a row.

“Tipping has a net positive effect but guests don’t like having to pay any automatic service charges (with or without tipping permitted).”

http://www.foodservice.com/blogs/show.cfm?contentid=103706