So what if more American restaurants followed suit and started to pay waiters and waitresses a salary? First, the obvious: Menu prices would be higher. Without tipping, restaurants would be forced to up the price of dishes. And yes, we all know that we’ll have to pay that 15 to 20 percent extra at the end of the meal, but when you’re ordering, it’s out of sight, out of mind.
Funny enough, studies show that all-inclusive restaurants—where 15-percent service costs are built in to the menu pricing—are perceived by diners to be higher-priced, says Mike Lynn, a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration. “It’s true even with 20-percent tippers, even though the all-inclusive restaurant would have been cheaper for them,” he said. “Diners don’t like being forced to do anything.”
And think about it: With tipping, diners are paying different amounts for the exact same meal, Lynn points out—which means more generous customers are being penalized. A recent survey even found that 63 percent of Americans felt pressure to tip even when the service was bad.