T.J. Callahan says he was “trying to do the right thing” when he opened the Thomas & Dutch restaurant earlier this year, and switched from the traditional tip model to a required 20% service charge added to the bill.
Not only would it mean more money for the servers, but, Callahan said, the flat service fee would also help eliminate historically negative perceptions of tipping as having sexist and/or racist origins.
But the service charge lasted only five months, before Callahan went back to the old format.
“The hostility we got” from customers to the fee, Callhan told Evanston Now, included being accused of running a “socialist, woke restaurant.”
Last week, Evanston Now reported that another eatery, Soul & Smoke, has instituted a mandatory charge in place of gratuities, but Thomas and Dutch had reinstated tipping.
Callahan was not available for an interview at that time (another employee confirmed the end of the service charge), but was able to talk with Evanston Now today.
Callahan said that quite frankly, “some people were not coming because the service charge was in place.”
“It dramatically increased my costs,” he said, “but for the most part people seemed to hate it.”
The mandatory fee had become a “third rail.”
Even the servers, whom Callahan said received the equivalent of a 66% hourly pay raise from the charge, had to take grief from customers.
The required fee, Callahan said, “left a bad taste in the mouths of guests.”
Thomas & Dutch is an upscale downtown restaurant, a rebranding of Callahan’s more casual Farmhouse at the same location.
He had thought that progressive, affluent, educated Evanston would accept the service charge, particularly with the past negative connotations of tipping.
Didn’t happen. Despite putting service fee information on the restaurant’s website, and on a table card for diners to read, Callahan said customer reaction was often “what the hell is this?”
There is still a 4% surcharge to help cover employee fringe benefits such as health care. Customers are made aware of that.
But as for dropping the mandatory 20%, Callahan said, “I had to go back to the traditional model.”
“I need to stay in business.”
Considering the less-than-positive customer reaction he found for service charges, Callahan is worried that Evanston City Council might end the sub-minimum wage (which servers are now paid, with the understanding that tips will increase their take-home pay), in favor of a higher minimum rate.
Callahan said that might lead diners to Skokie or Wilmette, which are not considering such changes (Chicago is).
Ironically, Callahan noted that in his restaurant industry experience, the typical voluntarily paid tip is 20% … the exact same amount he had added as a mandatory service charge.