Nick Price believes tipping has gotten out of hand in the US – and so have his cafe customers. Now he’s adopted a recent business strategy that he says is better for both customers and his staff
A coffee shop owner has eliminated tips at his establishment, allowing him to raise workers’ pay from $8 to $18 an hour.
The store in Salt Lake City, Utah, USA, decided to adopt a different business model than the typical American hospitality industry. With tips typically ranging from 15 to 20 percent in the US, they typically make up a significant portion of a worker’s income in the industry.
But Nick Price, owner of Three Pines Coffee, says getting rid of tips will make life easier for customers and allow him to significantly augment the pay of his valued employees. “Since when do we tip for everything? I definitely feel tip fatigue,” he said.
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Price believes the tipping system is unfair to his customers because business at the cafe is much slower in the winter than in the summer. As a result, his employees can’t count on making the same amount of money year-round.
“Because we have a lot of work in the summer, the tips are pretty good. In the winter, it’s a little slower, and the tips are pretty bad,” Price explained. “I didn’t feel like my employees should be making less money during those slower months.”
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The owner decided to eliminate tips at his coffee shop — and instead raise the price of everything on the menu by about $1. That won’t make a difference in prices for customers, who will no longer have to tip for coffee, but it allowed Price to more than double their pay from $8 to $18.
Everett, a Three Pines employee, says that now that he knows how much he’ll take home in a year, it’s made a huge difference. He’s been working at the store for two years and says asking for tips on every order used to feel “awkward,” and he prefers the stability of earning a higher hourly wage. “I know how much I’ll take home. It’s really comforting because tips can be so volatile,” he said.
Three Pines Coffee has had the policy for just 30 days, but so far it’s working and clearly popular. “I can’t wait to see if other businesses in Salt Lake get on board because I think people are tired of tipping and this is the future of our industry,” he said.
