- A Bay Area bakery banned tips and instead charges more to fund higher wages
- Backhaus now offers at least $23.50 an hour plus parental leave and healthcare
- Americans are increasingly frustrated by “typflation” and high food prices.
A popular Bay Area bakery banned tipping staff and opted to raise prices to fund higher pay.
Backhaus last month eliminated the option for customers to tip staff at its two branches. Instead, it raised prices by an average of 11 percent — about 25 cents for a typical pie.
The price increase is intended to fund a $23.50 per hour wage for entry-level staff and benefits such as paid parental leave, comprehensive healthcare and a 401(k) plan, the The San Francisco Chronicle reported.
Customers and staff at the two stores in San Mateo and Burlingame, cities about 20 miles south of San Francisco, are happy with the move.
Backhaus’ move comes after months of growing customer frustration over “typflation” and the rising cost of dining out.
Backhaus, which has a location in San Mateo and another in Burlingame, eliminated the option for customers to tip staff.
The popular Bay Area baker increased the prices of its items by an average of 11 percent.
California restaurants will also no longer be able to use surcharges to offset the cost of wages, local mandates and benefits after a new law goes into effect on July 1.
Under SB478, which will ban junk fees in the state, California restaurants will no longer be able to use service fees, meaning many will have to include them in menu prices.
Some restaurants and cafes have expressed concern that offsetting costs by raising prices will discourage inflation-weary customers, resulting in lower sales.
However, Backhaus co-owner Anne Moser said the reception of the new model by her customers has been mostly positive.
Some customers don’t realize the price increase until they read the sign next to the register explaining the change Moser explained.
“You will notice that we have increased prices so we can offer our team a wage closer to the San Mateo County Living Wage,” the sign says.
“We think it’s fair to provide stability to our team and those types of benefits and a fair level of pay so they can afford to live in the community that they serve,” Moser told the Chronicle.
He added: “That’s part of the cost of doing business here, so we need to price our products accordingly.”
Backhaus in San Mateo and Burlingame now pays its initial staff $23.50 an hour, in addition to providing parental leave and health care.
The biggest increase was for Backhaus’ breakfast sandwich, which rose from $13 to $15.50.
Backhaus’ most expensive pie is now a $9.50 seasonal galette, up from $8.75.
All bakeries and other pastry shops rose only 25 cents.
Each item was analyzed separately, Mosey explained, to consider the labor and ingredient costs for each, as well as the price of its competitors’ options.
Mosey said she and co-owner Robert Moser also used a ‘living wage calculator’ from the Massachusetts Institute of Technology to assess the needs of legacy staff living in the area.
“It’s refreshing,” one customer, Melissa Basso, told the Chronicle about the change.
‘[I know] how hard people work for that money,” he said.
Adding that the higher price simply “comes with the territory of living here.”
“They shouldn’t depend on tips,” said another customer, Preeti Deb.
Kerri Hampton, however, questioned why ‘everything goes back to the consumer’, through tips or price gouging.
