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These restaurants don't take tips

A handful of restaurateurs have started 'no tipping' policies. Here's why, and how they're paying their staff.

Staying competitive

Bob Conway Packhouse Meats
Kurt Stephens (left) general manager of Packhouse, Bob Conway (right) owner
  • Where: Packhouse, Kentucky
  • Owner: Bob Conway

Patrons of Packhouse can't make it through the front door without knowing tipping isn't expected at the end of the meal. "No Tipping" is written in red letters on the floor by the entrance. The policy is also printed on the menu.

Conway decided to disallow tips before launching the meatball restaurant in January 2014, and he incorporated the additional costs, including tax, into his menu prices. His staff makes $10 an hour or 20% of sales, whichever is higher.

Why: Conway said a big reason for the no-tipping policy was to stay competitive with fast-casual restaurants where a 20% tip isn't added to the final bill. "The sticker shock was starting to catch up with full-service dining."

The result: Conway admits that he missed some costs associated with the pay structure. "Our prices are raised to cover labor, but it doesn't capture the tax implications," he said. "That is something we failed to anticipate; we are sucking it up."

  @KathrynVasel - Last updated May 20 2015 11:40 AM ET

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