Category Archives: Thinking Aloud

The Foodie Friday word of the day is “coperto.” For those of you unfamiliar with the term it’s an Italian word meaning “covered.” When you eat out in Italy and wish to dine sitting down, you pay the coperto – the cover charge. It’s usually a couple of euros and is meant to cover the costs of the table, tablecloth, napkin, dishes, washing and cleaning, heating and light – everything involved with a restaurant meal which is neither food nor work costs of the staff.

(Photo credit: Wikipedia)

There is a corollary to the coperto – a “no tipping” policy. Since the coperto covers the non-staff items, the margins on food and beverage can be spent on staff. The US is one of the few countries where there is a two-tier pay system because we are one of the few that operates in a system in which someone is dependent upon tips for their income. The cooks and dishwashers often make far less than the better-compensated front-of-house servers and bartenders. Thanks to tips, service staff can take home as much as twice the pay of their kitchen counterparts.  This is beginning to change and I think it’s a good thing.  It’s also instructive thinking for all businesses.

Quite a few restaurants are starting to charge a nominal fee per head much like the coperto.  Others are inflating their food prices but forbidding tipping – in essence building in a 20% tip.  The final cost to a customer is the same assuming that they left a reasonable tip.  This allows them to pay a much higher wage and to provide benefits such as health care.  The transient nature of the business is changing as great servers and cooks can be compensated and induced to stay on.

What happens when there is a bad experience?  Think about it.  First, it’s rare that you withhold the entire tip.  That’s punishing an entire staff for one person’s incompetence.  The reality is that you’d probably complain to the manger.  It’s rarely a money issue.  Second, what happens quite a bit is that people are just too damn cheap.  $5 on a $125 bill is unfair but that is more the reality of the business than to person who overtips.

What does this have to do with your business?  First, ask yourself if there is a two-tier system that unfairly rewards one group over another.  Second, what have you done to make sure that your staff is incented to remain?  As with customers, I find it’s always more cost-effective to retain an existing competent person than to find, hire, and train a new one. Finally, how can you rethink how the money customers pay is positioned without seeming to nickel and dime them?

There are a lot of ways to change the US system.  At one place servers get paid either $10/hour OR 20% of their food sales, whichever is higher, and it’s almost always the over for servers.  Others charge a flat fee while others automatically add a 20 percent service charge to all bills or raise their food prices.  All forbid tipping.  Hopefully everyone wins.  Employees make more and consistent money, customers get better service due to a happy, motivated long-term staff, business owners continue to make reasonable profits.  Sounds like a plan to me.  You?