How to set yourself apart in the restaurant, bar, hotel and taxi service industry in Canada: look at Japan.

by Nov 25, 2015Strategy0 comments

“Imagine going to a restaurant where the price you see on the menu is what you pay. That would be so refreshing!”


AUTHOR’S NOTE: The second time I went to Japan as a young teenager, I was stopped at a restaurant to refuel after a long day of shopping in Shibuya (the famous Times Square-style district in Tokyo). When I overpaid at the cash intentionally to leave a nice tip, the waitress refunded me the difference. I said “no please, it’s tip.”. She looked embarrassed and said “no tip” and proceeded to return my change. I didn’t understand what had happened until I explained the situation to my Dad when I returned to his place that evening.

There is a difference between being honest and being sincere. An honest waitress will tell you that adding cheese to escargot is an additional $4, a sincere one won’t try to upsell you on escargot to begin with just to make more in tips.


Pleasu, no tippingu.


You might be shocked to know that you don’t tip in Japan. I’m serious! You do not tip barmen, taxi drivers, waitresses, bellboys, you name it. You just don’t. And they will refuse profusely if you try. They just won’t accept tips. Why? Simply put, tipping goes fundamentally against Japanese values. They believe that when you pay for a service, you shouldn’t have to pay extra

1) to receive the service in question, or worse yet;

2) to receive even better service.

To speak to the first point, if you pay a barman 600 Yen (the equivalent of 6 CAD) to make a drink in Japan, then you are paying for the drink itself AND the act of making it. Both should be included in the price of the drink. Otherwise, you’re wrongfully charging someone for a product and a service separately (even though the service cannot be separated from the product). It’s a no brainer! Too bad this isn’t the way things work in Canada and the rest of the world.

“Otherwise, you’re wrongfully charging someone for a product and a service separately (even though the service cannot be separated from the product).”


If you don’t tip a barman when you order a drink on a Friday night in Canada, then odds are he will take your next order only after he has served all tipping customers first (as you painfully watch someone arrive at the bar after you get served before you). Here, you almost need to tip in order to receive service, period.

To speak to the second point, let’s say you tip really well in Canada. Let’s say you give the bar man a $5 tip for pouring you a beer, he’ll treat you like a king the next time you come to order. He won’t make you wait for you next drink, I can assure you. Effectively, this is a situation where the more you pay, the better the level of service you receive.

Tipping, in this situation, is no different than bribing. Isn’t it? Doesn’t this make you feel sick? It does for me. Maybe that’s because I have a bit of Japanese blood in me, but still!


Don't blame the barman.


But it’s not the barman’s fault. It’s the system. Barmen work 4-hour shifts and they are often paid less than minimum wage during peak times. So, they need to make tips in order to make a living. Hence, their willingness to provide good service is directly related to how much the customer tips them - a classic example of operant conditioning.

The Japanese view tipping along the same lines as begging, and begging (for them) is wrong. Even the homeless in Japan don’t beg for money, oddly enough… Still, there is a stronger argument that explains the tip-less phenomenon in Japan. The Japanese believe in doing your best every time. It doesn’t matter if you are serving a no-body or the Prime Minister. You should be sincere enough to offer the same level of service to both. This is why you don’t tip in Japan; it goes against their nature.

Ok, what's your point?


So, we established that tipping doesn’t illicit sincere behaviour from service providers. What’s the big deal? Well, sincerity, or a lack there of, largely contributes to a customer’s evaluation of the service. The more sincere you are when dealing with a customer, the more likely it is that the customer will positively evaluate the service experience.

I’m not suggesting that we ban tipping in Canada. I do think, however, that Canadian service providers can set themselves apart in tip-centric industries (like restaurants, bars, taxis, hotel, etc.) by choosing to adopt a tip-less model: no tipping at all.

Imagine going to a restaurant where the price you see on the menu is what you pay. That would be so refreshing! No tax and no tip. So that they’ve worked the tax into the price and you don’t pay the waiter a tip. At least, I know what to expect when the bill comes around. This is how it’s done in Japan. And it works!

How to make a tip-less model work.

Well, you need to start by paying your employees a high enough hourly wage to attract and retain them. More importantly, you need to attract ones that are service-oriented, and not performance-oriented. They will be the key to delivering service that is authentic, which is the whole point of abolishing the tip model to begin with. Because, when they aren’t so absorbed with getting a tip, they can instead focus on providing service that is truly worthy of one.

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Meet the author.

Taro Abarbanel-Uemura

Marketing Strategist

Meet Fortified Marketing's founder and lead marketing consultant. Taro loves reading fascinating articles on various marketing-related subjects, just as much as he enjoys writing about them. When he isn’t savouring a latte while working on his newest blog post, he can be found at a coffee shop in Ottawa's Little Italy, or marathoning shows and documentaries on Netflix.

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