The first no-tipping restaurant in Edmonton has dropped the policy it adopted a year ago, and is now letting customers leave gratuities to servers.

Café Linnea at 10932 119th St. opened in July 2016 with a novel concept — including tips built into menu prices, with servers receiving higher wages.

This Aug. 18, however, Café​ Linnea announced on its Facebook page and menus that it was returning to a tip-based system, effective Aug. 22, in line with the "industry standard."

"While we still support the living wage concept, the current model has proven to be untenable and our team has decided this is the best way for the restaurant to move forward," the post said.

"We will be lowering prices on the menu to reflect these changes and we thank you for your patience while we switch tracks. We are fully committed to creating a fair workplace for our employees and customers while still providing the absolute best in service, atmosphere, food, and drinks. The tips our employees receive will be fairly distributed between the service staff and the kitchen."

Café​ Linnea's decision to drop it's no-tipping policy was announced on its Facebook page on Aug. 18. (Facebook)

Co-owner Garner Beggs declined comment, but in an interview with CBC Radio just before the restaurant opened, Beggs said he got the no-tipping idea while living in Japan, where restaurants don't allow it.

"Coming back, I found tipping as an institution, to me, doesn't make a lot of sense," he said.

Co-owner Garner Beggs, second from left with staff last year, said at the time that he got the idea for a no-tipping policy while living in Japan. (Supplied/Facebook)

At the time Café Linnea introduced the no-tipping policy, Beggs said it was an experiment he was entering into with an open mind.

More money working for tips

Theo Fox said the policy was one of the reasons he wanted to work at Café​ Linnea, where he was employed for a year until last month.

"You get to know how much money you're going to make at the end of the month, at the beginning of the month because you're making a consistent wage," he said, adding that under the no-tipping policy, servers earned $20 an hour.

Fox said it's hard to make plans while working for tips, because the income fluctuates so much, depending on how busy the restaurant is. After several months working at Café​ Linnea, he also found he was making less money than if he were receiving tips.

"I think that the wage ended up working out to be like ... an average of what one might expect to make on a slow night, but it didn't adequately make up for the busy nights."

Fox said the no-tipping policy meant management couldn't end up sending servers home early on slow nights.

"I think it's a really important mechanism to how people keep their labour costs low," he said. "People were not going to go home early because they were being paid hourly."

Fox has worked as a server for seven years, including in fine dining, high-end restaurants where tipping made up most of his income.

"My employer paid for less than half of my total earnings," he said. "Most of the burden of my earnings was on the customer and thus didn't have to be reflected in prices."

Café​ Linnea never increased prices enough to make up for the higher staff wages, he said.

Customer habits hard to change

It's difficult for one restaurant to change the way the industry operates, said Kyle Murray, professor of marketing at the Alberta School of Business at the University of Alberta.

"If it was going to happen, you'd need an industry association to make it change so that it happened in hundreds of restaurants across the province or across the country all at once, and made a really big push to try and change people," he said.

"One restaurant here and there, the odds of that working are really small."

Taking away tipping may have made some customers uncomfortable, as people are used to the idea that it acts as a sort of reward, Murray said.

"There's kind of a social norm that makes us feel like, if we get good service, we should tip."

Also, a business would have to charge enough for menu food to make up for a server not getting tips, he said.

"It's really just a pricing issue. In theory, you can charge enough money that you don't need to tip and you could pay your staff very well, which is essentially the Australia model where servers are making $25 an hour, but prices [on the menu] are much higher."

Communicating the difference in pricing to customers is also key, he said.

"When you look at a price for ... an omelette and it seems like it's $5 more than everywhere else, that's going to have an impact on demand," he said. "So higher prices will reduce demand."

Murray said theoretically, that shouldn't matter because what the customer ends up paying with a tip would work out to the same amount.

"It's really more the customer's perception. When they look at the price, they don't end up thinking about what they paid somewhere else plus a tip."

Disappointed by change

Roberta Stasyk, who has eaten at Café​ Linnea several times, said she was disappointed by the change.

"I was hoping this model would be successful because as a customer, I really like it," she said. "I like knowing what my meal is going to cost.

"I like not having this angst about, 'Oh what should I give? Should I give 15 per cent? Should I give 18 per cent? Do I look cheap if I only give 15 per cent?'"

Stasyk said she always received excellent service at Café​ Linnea even with the no-tipping policy, and she plans to continue to eat there.

While Café​ Linnea was believed to be the first Edmonton restaurant to launch a no-tipping policy last year, at least one other restaurant in the city has adopted no-tipping since then.