Joe's Crab Shack tests no-tipping model

No Tips at Joe's Crab Shack

Waitstaff no longer have to fear the wrath of bad tippers, at least at Joe's Crab Shack.

The beach-themed restaurant chain began testing a no-tipping service policy in more than a dozen stores in the last few months, CEO Raymond Blanchette says.

Calling the practice a "forward-thinking policy" during an earnings call last week, Blanchette explained that traditional tipping methods were "antiquated" and fostered and overly competitive environment for workers.

"Servers, hosts, bartenders are paid now higher, fixed, hourly wages," Blanchette said during the call, "and it's expected to result in an improved team atmosphere, a significant reduction in turnover and greater financial security for the employees."

Have we reached the tipping point for restaurant tipping?
Danny Meyer
Danny Meyer: Tipping ‘demeaning' for workers

The exec noted that the restaurant would raise prices a bit instead of adding a service charge to make up the gratuity.

Joe's Crab Shack's no-tipping policy comes just weeks after restaurateur Danny Meyers revealed that all restaurants under Union Square Hospitality Group would do away with gratuities.

Joe's, owned by Ignite Restaurant Group, faced a sharp decline in sales this year; its comparable-store sales dipped 6.6 percent in the third quarter.

Blanchette said that the decline in sales was "fundamentally a traffic issue" and that the restaurants will focus on driving foot traffic earlier in the week and during weekend celebrations.