Coffee shop boss scraps tipping and increases staff pay from £6 to £14 an hour

01 February 2024 , 16:16

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Coffee shop boss scraps tipping and increases staff pay from £6 to £14 an hour

A coffee shop owner has abolished tipping in his cafe - and says it allowed him to raise his workers’ pay from $8 an hour to $18.

The shop in Salt Lake City, Utah, US, has decided to adopt a different business model to what is typical in American hospitality. With tips typically around 15 to 20 percent in the US, they usually make up a significant part of an employee’s income in the industry.

But Nick Price, the owner of Three Pines Coffee, says that getting rid of tipping will make life both easier for customers and allow him to significantly ramp up the pay of his valued employees. “Since when are we tipping for everything? I definitely feel tipping fatigue,” he said.

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Price says he hopes other business owners catch on with his idea (wmtv15news)

Price believes that the tipping system ends up being unfair on his customers, because business in the coffee shop is far slower in winter than it is in summer. As a result, his employees can’t count on raking in the same amount of money throughout the year.

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“Because we get pretty busy in the summer, tips are pretty good. Then we get a little slower in the winter and tips are pretty bad,” Price explained. “I didn’t feel it was right for my employees to be making less money in those slower months.”

Employees are enjoying a much higher wage thanks to Price's new police (wmtv15news)

The owner decided to abolish tipping in his coffee shop - and instead raise the price of everything on the menu by around $1. It won’t make a difference to the prices for customers who will no longer have to leave a tip for their coffee, but it has allowed Price to more than double their pay from $8 to $18.

“The tip is essentially included in the price. So, the prices up on the board are exactly what you pay,” he said. It is a popular policy for customers who say they have no problem paying the extra dollar if it means there is no need to tip. “I think that’s a good solution. I think tipping got really out of hand. I’d rather pay the higher price [than tip],” one said.

Customers will now pay $1 extra for their coffee - but won't need to tip (wmtv15news)

Everett, an employee at Three Pines says it has made a huge difference now that he knows how much he is going to take home throughout the year. He has worked at the shop for two years and says he found it “awkward” asking for tips with each order, and much prefers the stability of earning a larger hourly wage instead. “I know how much I’m going to bring home. It’s really comforting because tips can be very volatile,” he said.

Three Pines Coffee has only had the policy in place for around 30 days, but it is working so far and has been clearly popular. “I look forward to seeing if any other businesses in Salt Lake jump onto this because I do think people are sick of tipping, and this is the future of our industry,” he said.

Alex Croft