Special Report: The end of tipping?

SAN DIEGO (KUSI) – You do it every time you dine out. You leave your servers a tip.

It’s the social norm in this country, but the restaurant industry is re-thinking its stance on tipping.

It’s something that could change your dinning experience and the way many restaurants operate.

Since 1993, the "Spice House Cafe" has been doing it right in terms of customer satisfaction: good food and good service.

Linda Dickerman has been a server at this San Diego mom and pop for 15 years and says she makes a good living.

She gets paid hourly, at about minimum wage and she earns tips.

California is one of a few states where tips are property of the worker, not the employer, so servers like Dickerman can keep her tips on top of her minimum wage earning. 

But many restaurants across the country are starting to do away with tipping.

Why?

In a statement, the California Restaurant Association said: "When  the minimum wage increases without any mitigating measures, some owners opt to replace tipping altogether by instituting a service charge, while other operators have opted to eliminate tipping and increase prices, in  order to provide all employees the increased wages." 

Basically, increase prices or add service charges in order to pay everyone more.

The thought of not making tips makes Dickerman nervous.

"I have a small family and we need the tips desperately. That’s why we’re here in the restaurant."

The same goes for the owner of the Spice House café.

"For our restaurant, it won’t work," said George Stanitsas.

Stanitsas has been in the restaurant industry for over 40 years. His employees and his customers are like family.

"How can I raise my prices. I see the same customers everyday. We’ve been here 23 years. Ninety percent of the customers are the same people. They keep  coming over, their kids keep coming. I mean how much can you raise the prices?" Stanitsas said.

Perhaps high-end establishments or chain restaurants can afford a no-tipping system, but the owner of this family shop said he can’t. He said it could put him out of business.

This idea of a no-tipping model will definitely impact this restaurant and other mom and pops, but the more pressing issue right now really is the city’s minimum wage initiative. You see next year, voters will decide whether to increase the minimum wage to more than what the state requires.

In January, the state minimum wage becomes $10/hour, which is an increase of a dollar for San Diego.

In the summer, San Diegans will vote on an $11.50 minimum wage rate with a built-in cost of living adjustment.

City Councilman Todd Gloria is behind San Diego’s minimum wage initiative.

"Typically in response to any minimum wage, employers say this will hurt  their bottom line. but really what we see is that people can accommodate  them if the change is done incrementally in a measured approach," he said.

The other issue having to do with a no-tipping system is quality of service.

"You tip for better service and you appreciate it and you show your appreciation. If you can’t show your appreciation, what’s the incentive for even the server to provide any extra service?" said Deborah Kornheiser, a local customer.

Many servers agree and then there are those who say restaurants should get rid of tipping because it just complicates things for the customer and can create unpredictable earnings for servers.

In the end, over at the Spice House Cafe, nobody wants that to happen.

And while the no-tipping trend has yet to hit San Diego, it’s something that’s becoming a big concern in the restaurant business. 

Categories: Special Reports