Video: The employee-free cafe and the honor system in North Dakota

In a world of arrogant apparatchiks, biased media, and laughably dishonest pols, it’s time to take a quick break and restore a little faith in humanity. We turn to North Dakota, where one entrepreneur has discovered that trusting his neighbors to pay for their coffee is not just a good bet, but actually even better than assuming they won’t (via Rob Port):

A coffee shop in Valley City is saving money on employee costs…because it doesn’t have any.

“The Vault” downtown has been growing in popularity as a self–serve hangout.

It’s like any other coffee shop in that it has coffee, tea, and pastries.

The one thing it’s missing?


“At the time I didn’t realize how unique that was, I thought it just made sense. And I found out later by Googling…there really isn’t anything else like it,” said co-owner/operator David Brekke.

WTNH also picked up on The Vault’s business model of trust:

If you don’t have cash, you can use a credit card or a check. Another bonus is that you don’t need exact change; the computer will round the cost of your coffee up or down, depending on your drink.

Owners say people actually tend to pay 15 percent more instead of being dishonest.

You can also purchase tea and pastries, and the coffee shop offers movies every Saturday.

Here’s why I think The Vault succeeds, even if it’s not quite profitable yet. First, people are generally honest, especially in smaller communities where social connections are tighter and everyone knows each other. Valley City has a population of around 6600 people as of the 2010 census, so not too many people will be chintzing out on payment when others are watching. Second, the act of paying on the honor system is an opportunity for self-affirmation. It would make people feel good that they are participating in a transaction honestly, and that may be even better than the coffee and the conversation.

There is another aspect to this, too. North Dakota has a booming economy thanks to the oil industry, and in many places has more good-paying jobs available than people. The labor market is much tighter as a natural result of economic expansion, therefore more expensive, and the need to forego staff may be more of a necessity than an innovation. Where labor becomes more expensive from artificial interventions such as minimum-wage hikes in looser labor markets, the employee-free approach will look more attractive where it can be applied, and will have little to do with self-affirmation.