 AUSTIN, Texas (Reuters) - National restaurant chain Joe’s Crab Shack has rolled back an experiment at select restaurants to eliminate tipping after customers and workers complained, an industry news report said. “The system has to change at some point, but our customers and staff spoke very loudly,” Merritt was quoted as saying in a call with analysts. Bob Merritt, CEO of Houston-based parent company Ignite Restaurant Group, told investors this month that research indicated 60 percent of customers disliked the no-tipping policy, trade paper Nation’s Restaurant News reported this week. “While we made the determination that a gratuity-free system does not work for our business at this time, we continue to believe that it has the potential to change hospitality for the better,” Mr. Stulman wrote in a letter to diners. Danny Meyer's Union Square Hospitality Group in November rolled out a no-tipping policy three of its 13 restaurants, including the Modern at the Museum of Modern Art.
– The first full-service national chain to get rid of tipping is, for the most part, reinstating the practice that its former CEO once called "antiquated." Joe's Crab Shack, which had tried out the gratuity-included model in 18 of its 130 or so restaurants across the country, is going back to the old way of doing things in 14 of those restaurants, CNNMoney reports. The reason for the backtracking was made clear in the company's first-quarter earnings call last week: "Our customers and staff spoke very loudly [about the policy], and a lot of them voted with their feet," said Bob Merritt, the CEO of parent company Ignite Restaurant Group. Test eateries—which had compensated for the lack of gratuities by raising menu prices and giving increased, fixed wages to staff—lost between 8% and 10% of their customer base, per the New York Times. Reuters reports that some workers at the test sites got a $12-an-hour minimum, and that menu prices were boosted less than 20%; advocates of the no-tipping model say it allows servers to count on a fixed income and eliminates patrons' need to do math. But about 60% of the chain's customers didn't take to the new model, company research revealed: Patrons apparently didn't think the waitstaff would be as motivated to provide decent service if they couldn't count on a tip, and they were also wary that management might not share the extra money being pulled in through higher menu prices with staff. So why is Joe's keeping four of the test restaurants on the no-tipping system? Merritt says the model actually worked in those locations, though they're trying to figure out why. (Tipping is un-American, says this no-tipping advocate.)