Calgary Earls location eliminates tipping, replaces it with 16% ‘hospitality charge’

Click to play video: 'Calgary downtown restaurant adopts new tipping model'
Calgary downtown restaurant adopts new tipping model
Earls 67 on Stephen Avenue Mall just reopened on Friday and they have a new tipping model. Carolyn Kury de Castillo reports – Jul 11, 2016

When the new Earls.67 on Stephen Avenue opened after months of renovations, more than just the décor and the menu changed. Now there is an automatic 16 per cent hospitality charge on the bill – an alternative to tipping.

“Currently, a large portion of that goes to the server and it creates a disparity in the wages from our cooks all the way to the servers,” Craig Blize, Earls VP of operations said on Monday. “In this new model, what it allows us to do is to redistribute that compensation so 100 per cent of the 16 per cent hospitality charge goes to our highly-trained cooks and it goes to our servers and what we’re testing to see is if it promotes teamwork, promotes engagement – that will hopefully result in a better guest experience.”

Blize said Earls has done a lot of research around the no-tipping model.  He said it’s happening in New York and in other major cities in the U.S. Some restaurants in Vancouver and Toronto are also experimenting with the new system.

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“So as the restaurant industry evolves and is ever-changing, we just want to test this out and get some information and get some knowledge to see if there’s a different type of compensation model that can result in a better guest experience for everyone,” Blize said.

Servers at Earls.67 are welcoming the new tipping model.

“It’s not about who’s tipping more. It’s a good environment,” Anika van Breevoort said. “There’s lots of people wanting to help you out instead of focusing on their stuff alone because you’re making the same, no matter what.”

“I think it’s actually got great potential – what they’re doing here – just in terms of completely changing the industry,” server Grayson Manning said.

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Many customers said they are happy to not have to deal with tipping.

“I am a fan of it. I think it would be a good policy. You see it in Europe and other places. You don’t have to worry about tipping. People know they’re getting paid decently,” Rory Nagge said after lunch on Monday.

Some visitors to Calgary who dined at Earls.67 are also in support of the 16 per cent charge.

“I think it’s fantastic. You don’t have to worry about what you’re going to try to work out. Even on a corporate bill, you don’t have to split the expense for the tip,” Jeff Favaloro from Australia said.

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“It’s going to save me money. I think other people will be paying more,” Greg van der Linde from South Africa said. “ So I am all for this because I think some people go really cheap. This will be a good model to get the waitresses and waiters paid well.”

The thought of getting poor service and still having to pay the 16 per cent charge was on the minds of some patrons, however, most didn’t think it would be a big problem going forward.

“That did strike my mind when we found out about it, but I think depending on the policies at the different restaurants that will be taken care of,” Van der Linde said.

“We were joking about that inside – that maybe there’s no incentive. But I don’t think so. I think people who are good at their job will be interested in carrying on and continuing to do a good job, so I don’t think it will make a big difference. If you don’t like the service you just won’t go to the restaurant,” said Nagge.

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Earls’ response to the question of getting poor service and still having to pay the hospitality charge is “talk to the manager.”

“We want to accept that feedback and at the same time if your experience is not up to standard then ask for a manager and we will make things right,” Blize said.

David Dick is a philosophy professor and a fellow in the Canadian Centre for Advanced Leadership at the University of Calgary’s Haskayne School of Business. He thinks doing away with tipping is a great idea.

“ I think tipping is a bad custom,” Dick said. “I think most people think, when you give a tip, they are responding just to good service. And I think most servers think they are receiving a tip only in response to good service. But there’s just a ton of research that shows that’s not the case. People respond to good service exactly the same amount as they respond to whether it’s sunny outside, whether or not their server touched them, whether or not their server left candy and, troublingly, whether or not their server is white or black, a man or a woman.”

“It just seems that tipping is a location for lots of discriminatory practices that aren’t worth it.”

“I think the best solution for payment is good, steady high wages and if the restaurant happens to have an especially good year, give your employees a bonus. Don’t leave 30 to 50 per cent of the servers’ wages up to the random whim of a person at the end of a boozy meal.”

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Earls.67 plans to review this pilot project after getting feedback from both staff and guests.

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