Joe's Crab Shack Tests No-Tipping Policy in 18 Locations
Joe’s Crab Shack is changing the way people pay to eat at their restaurant. Instead of launching a new mobile payment app like Outback or adding new loyalty rewards like Chili’s, this restaurant has eliminated tipping in some of its locations.
Under its new no tipping policy, Joe’s Crab Shack is no longer allowing customers to tip their servers. Rather, the restaurant is increasing its menu prices by as much as 15%, depending on the area, and raising the hourly rate for their servers to $12 to $14 an hour, compared to the federal standard of $2.13.
Joe’s is the first major chain restaurant in the United States to do away with tipping. The company began testing the policy in August, and has now rolled out the plan to 18 of its 130 locations. There is still no timeframe for a nationwide adoption of the policy, but the tests so far have proven positive.
While the increase in menu prices may seem high, they represent less than the 15% to 20% most customers choose to tip their servers. In the end, people are spending a little less money for the food, and the servers are able to enjoy more consistent, predictable paychecks.
If you live near one of the 18 Joe’s Crab Shack locations with the no tipping policy, you should see signs in the restaurant indicating what the changes are, why they are happening, and what you can expect when you pay for your food. At a minimum, you will notice there is no longer a place to include a tip on your credit card receipt–just a signature line and a total for your purchase.