Joe’s Crab Shack Ends ‘No-Tipping Policy’ At Most Restaurants

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By Cooking Panda

Joe’s Crab Shack has decided to re-instate tipping at most of its restaurants.

In 2015, Joe’s Crab Shack established a “no-tipping test” at 18 of its locations. As part of the policy, tipping was eliminated, which meant that servers’ wages started at $14 an hour and prices were increased from 12 to 15 percent.

At the time, Ray Blanchette, then-CEO of Ignite Restaurant Group, said the policy was logical because Joe’s Crab Shack often serves large groups, and waiters did not like having to split tips and work at extra tables.

“We’re really leading in our industry with regards to national brand going out and testing this thing in a meaningful way,” Blanchette said, as reported by Restaurant Business Online. “So we want to be somewhat cautious.”

However, customers at some locations have been unhappy with the changes.

“The system has to change at some point but our customers and staff spoke very loudly,” said Bob Merritt, CEO of Ignite Restaurant Group, according to Nation’s Restaurant News. “And a lot of them voted with their feet.”

Almost 60 percent disliked the no-tipping policy, according to internal research. Not only did customers not like being unable to incentivize good service, but many didn’t actually trust restaurant management to pay their employees well.

“We got negative customer counts between 8 percent to 10 percent on average among the 18 restaurants, and we tried it for quite a while, tried communicating it different ways,” Merritt said. “So in those 14 restaurants, we are going back to the more traditional structure.”

However, since the new policy does appear to work in four of the restaurants, the no-tipping program will continue at those locations. 

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“We are going to try to figure out why it worked in some places and why not in others,” Merritt said. “The way we look at it is: We are really continuing the tests in [places] where it works.”

Sources: Restaurant Business Online, Nation's Restaurant News / Photo credit: Restaurant Business Online

Tags: customer dissatisfaction, Joe's Crab Shack, no-tipping policy, tipping
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