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One Restaurant’s ‘No Tipping’ Policy is Absolutely Genius

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One restaurant in Kentucky is making waves, but in a good way. And it comes in the form of not allowing tips from its customers.

But why is that a good thing? Turns out, this restaurant actually is keeping its waiters’ and waitresses’ better interests at heart, and it’s making them a lot more money.

Packhouse Meats in Newport, Ky., has signs posted around the restaurant that explicitly say, “No tipping.” If you pay by credit card, there’s no place to add a tip amount. It’s all done.

What does Packhouse Meats do differently? It pays its servers a flat rate of $10, no matter how long they work. But here’s the kicker: if the server’s individual food sales are more than $500, they’re paid 20 percent of the total sales.

Bad tippers can ruin a server’s night easily, causing financial struggles since they depend on patrons to basically pay their bills — because that $2.13 per hour isn’t going to get you much gas in the tank. But going in knowing you’re going to make at least $10 an hour is brilliant. But by pushing food and being a great spokesman for the restaurant, you can make way more.

It wouldn’t be uncommon for a server to wait on 100 individuals on a Friday or Saturday night. Even if you put it at $10 per person, that’s $1,000 in food sales and $200 to the waiter. If all that’s done in a five-hour shift, you’re looking at four times the $10 per hour base salary.

It benefits both the restaurant and its employees greatly. When servers know their pay is based on how much food they sell and not on a stranger’s generosity, they’re going to sell their restaurant.

And, it means the servers don’t have to deal with people who don’t know how to tip. Love it.

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