Do you feel overwhelmed by the increasing expectation of tips on your bill, from 18 to 25 per cent each time you dine out?
A northern Chinese-style barbecue restaurant in North York, WoodHouse BBQ, has been bucking the trend since February by adopting a no-tipping model, which has received significant support from customers.
Owner Hong Dai said that despite two years passing, business at her restaurant hasn’t bounced back to its pre-COVID-19 pandemic levels, particularly on weekdays when the number of customers has dwindled.
"I share the feelings of consumers; with rising prices and inflation, everyone is tightening their belts," she said. "Heading out for a meal is already tough, and adding an extra 15 per cent or even 25 per cent in tips only adds to the burden. It's no wonder more people are opting for takeout or cooking at home."
To stimulate business, Dai decided to introduce a bonus incentive system for employees in place of the tipping model.
"The initiative has been launched for a month now, and the results have been promising," Dai noted. "As business improves and profits increase, employees receive more tangible benefits. Compared to when we had tipping, their income is at least the same or even higher."
The Chinese Cuisine & Hospitality Association of Canada (CCHAC) headquartered in Markham views WoodHouse BBQ’s approach as a bold innovation.
CCHAC president Catherine Hou emphasized that consumer sentiment ultimately drives consumption.
"For a restaurant to adopt a no-tipping policy, it requires unanimous agreement among all staff," she said. "If both the owner and servers agree that this can maximize their benefits, then of course, this system can be implemented. However, in North America, tipping has been a longstanding tradition, so I'm not sure how much of a ripple effect this model can create."
As the first non-tipping Chinese restaurant in the Greater Toronto Area, Dai received huge support from consumers, alongside criticism from peers following her announcement on social media.
For example, many patrons specifically came to show their appreciation for the decision, feeling that finally a business was considering consumers' needs. However, some critics argued that this move disrupts industry rules and disrespects local dining culture.
"I've redirected funds originally earmarked for advertising and marketing, as well as additional revenue, to incentivize employees," Dai reiterated, “with their enhanced motivation to provide excellent service, business is flourishing.”
Hou expressed understanding of the pressure consumers are currently facing due to rising prices and also appreciates the business' highly experimental marketing approach. However, she remained uncertain whether other restaurants would follow suit.
While she neither opposes nor advocates for the no-tipping policy personally, she stressed the importance of ensuring fair wages for servers who provide quality service.
"At a time when the restaurant industry is struggling, it's crucial to find a solution that benefits consumers, business owners, and employees alike," she said.
Scarlett Liu is a federally funded Local Journalism Initiative reporter at Markham Economist & Sun.
