Feb 25, 2018
Earlier this month, Claus Meyer became the latest restaurateur to abandon the so-called hospitality-included model. His reason: losing tips meant losing customers.
Despite the small correlation between tip size and service quality, American diners are too accustomed to “partitioned pricing” to make the switch to a “bundled” model.
Behavioral economics is at work yet again, and the author explains it very eloquently: “The underlying issue is that, while it is strongly encouraged by social norms, tipping is still notionally optional.”
