As a special offering for downtown workers, Vincenzo’s Italian Restaurant this week introduced gratuity-free lunches.
Anyone who dines at the storied fine-dining restaurant, from 11:30 a.m. to 2 p.m. Monday through Friday, won’t have to tip their waiter or waitress.
Vincenzo’s owners, Agostino and Vincenzo Gabriele, will pick up the tab on tips, making sure their employees don’t miss out on the income, according to a news release.
“Offering gratuity-free lunch service is about making lunch out for our guests special and convenient,” Vincenzo Gabriele said in the release. Vincenzo’s says it is the first fine-dining restaurant in Louisville to institute such as policy — at least that the brothers are aware of.
Darren Tristano, president of the restaurant industry research firm Technomic, says he is skeptical about no-tip policies, including Vincenzo’s new offer.
“Ultimately, I don’t believe the consumer is concerned about gratuity at a full-service restaurant,” Tristano said. “I think it is going to be a little bit disruptive.”
Cost is not usually an issue for people going to high-end establishments and often customers like to tip, he added. Employees also could react negatively to the change.
“When an employee is working for tips, they tend to work harder,” Tristano said.
Vincenzo’s is known to be innovative when it comes to pay. For decades, the restaurant has offered a profit-sharing program for employees, which helps lower staff turnover, the brothers have said.
“While many restaurants have staff that come and go, we are extremely proud of our loyal and dedicated team who live and breathe fine-dining service to their core,” Gabriele said in the release.
One other Louisville restaurant has tried a no-tip policy: the local Joe’s Crab Shack. Louisville’s store was one place the national chain tested the policy change. The seafood chain dropped the no-tip policy after experiencing a 16.2 percent drop in income during the first quarter of this year, and an 8 to 10 percent decline in customer counts.
The elimination of tipping means that restaurants must institute a salary system to comply with federal wage laws, and they end up spending more on the front end in labor costs. To compensate for the loss in tips and change in employee wage structure, restaurants have increased menu prices.
Union Square Hospitality Group in New York City instituted a no-tip policy at all 13 of its restaurants in November 2015, and after four months, the company reverted back, according to a report from Eater. Company owner Gabe Stulman told Eater that his employees’ wages didn’t decline and he did not lose employees after the change, but his restaurants simply weren’t bringing in enough money from the consumer end.
“Patrons didn’t necessarily adjust their spending accordingly, ordering less food and requesting bottles of wine at the same prices as under tipping – scenarios that can result in the restaurant taking in less revenue,” Eater wrote.
Unlike restaurants that institute no-tipping policies for all meals, Vincenzo’s won’t raise menu prices. Lunch typically costs $10.95 to $16.95, according to the release, and the menu includes salads, soups and entrees such as poached salmon, veal parmigiana, beef tenderloin and lemon risotto with sea scallops.
Time will tell if the gratuity-free lunches bring in large enough crowds to cover any loss in revenue.
“If we’re going to evolve as an industry, these types of tests are going to be important, to see what works and what doesn’t,” Tristano said.