Kentucky Restaurant Bans Tipping, And The Wait Staff Loves It

Packhouse Meats is a unique restaurant located in Newport, Kentucky that has an all meatball menu. However, that is not the only thing unique about the company, they also have a strict ban on tipping. The ban does not allow patrons to tip their servers. In fact, there is not even a line to leave a tip if you pay via credit card.

According to Cincinnati.com, there is actually a really good reason behind the no tipping policy. Bob Conway, the owner of Packhouse Meats, said he did it to protect his servers.

I’ve heard the horror stories – $3 left on a $100 tab. How much a server makes has nothing to do with how hard they work. Servers had quit because they couldn’t make ends meet.

Bob did not want to see the servers at his restaurant suffer because of a few bad tippers. Therefore, he created an innovative pay structure that gives servers a guaranteed base pay of $10 per hour, but bonus incentives for higher sales volume.

We wanted our servers to participate in our productivity by giving them reasonable compensation based on sales. It takes the whim of the customers out of it.

The pay structure at Packhouse Meats is as follows: severs are paid $10 an hour or 20 percent of their individual food sales during their shifts–whichever amount is higher. This means that servers are guaranteed to make no less than $10 per hour, but have the option to make much more based off of sales. This would be the equivalent of a guaranteed 20 percent tip on all tables and $10 per hour on slow table days.

Many servers would agree that this is pretty awesome. Writer Meg Summers from B101.7 notes that by eliminating tips you also remove the “jerk factor”. She says:

There are few things in life more infuriating than busting it to take care of a table who leaves a chump change tip. You hustle like crazy to make sure these people’s drinks stay refilled, their orders are delivered promptly and accurately, their every need is attended to–all with warmth and courtesy– and they repay you with a $5 tip on a $125 check. Packhouse Meats has taken the Jerk Factor out of the equation and ensured that their servers get the pay the deserve. Their owner gets an A++ in my book.

Packhouse Meats has taken the service industry and turned its standard tipping model into a sales model. He is taking his servers and using them as part of the sales team. Why not? Servers are on the front-line of the restaurant and are the face of the company. What better person to use to increase your sales? This model allows for servers to benefit from their sales increasing their motivation to do a great job.

It also puts responsibility back on the restaurant owner. Instead of relying on patrons to “pay” the servers, Packhouse Meats is taking the matter into their own hands by ensuring their workers are being paid a fair wage with potential for more when they are busy or do a great job up-selling.

Packhouse Meats isn’t the only company making changes. Many restaurants are taking their servers’ wages into their own hands by banning tipping.

What do you think of this policy? Would you prefer to work for a restaurant with a standard tipping policy or this new sales-based pay structure that bans tipping?