Are Customers on Board with Restaurant Service Charges?

There’s a new microtrend in the restaurant industry: Eliminate tips for front-of-house employees, add a mandatory 15 to 20 percent service charge and raise the wages of everyone in the restaurant. The idea is tips lead to wage inequality, particularly for back-of-house workers who make less money despite also working hard.

It’s something seen often in Europe, but not so much in the United States. However, that may be changing. Major players like Danny Meyer in New York and the Joe’s Crab Shack chain are ditching tips in favor of service charges. And tons of independent restaurants in major U.S. cities are following suit.

But how do diners feel about the change? A new study by Horizon Media shows most restaurant diners are not ready to embrace an end to tipping.

However, the survey found attitude largely depends on one’s age. Millennials and Generation Z consumers were the most likely to be more open to tip-banning. They were also more likely to call the current tipping practice “outdated and unfair.”

But most U.S. consumers polled are not supportive of the change, with 81 percent of adult restaurant-goers not yet ready to welcome built-in tipping. For more than half of these restaurant-goers, the main drawbacks of built-in tipping come down to expected effects on service: 55 percent say they would be forced to pay the same amount no matter how good or bad service is, and 52 percent say it should be up to them to decide how much to pay for service.