Happy Hour is a Button on the Register

Posted by jcnnghm Thu, 02 Sep 2010 14:10:00 GMT

During a conversation about Bruce Feiler’s article describing his experience bribing the maître d’ at various New York restaurants for priority seating, the topic of bartender tipping and comp drinks came up. Less than a year ago, I was sitting in the office above a popular bar when I noticed some writing on a whiteboard, $12,376. I asked the owner what that signified, and he explained that was how much more the bar would have grossed the week before if every drink that went over the counter was paid for. Since then, I’ve been a little more interested in inventory control.

Founding Barhopolis, I have quite a bit of experience dealing with everyone associated in bar operations, from liquor reps to managers, bouncers to owners. Inventory control is the biggest problem faced by any bar. The next time you walk up to a bar, I encourage you to look up, and see if you can find the cameras. Almost every bar has them at this point, especially if they have had any problems with shrinkage, and they are almost always trained not on the crowd, but on the point-of-sale terminals. In fact, modern bar surveillance systems interoperate with the PoS controls to the point that a minute of video is recorded before and after each transaction, as well as PoS replay data, showing exactly what the bartender did before they rang in the transaction. If there is any suspicion that a bartender is stealing, they can watch the video indexed by transaction.

The reality of the situation is that free and discounted drinks are part of the rules of the game. Because shrinkage is essentially unpreventable, most bar owners and managers have taken proactive measures to get the most out of it. In my estimation at least 80% of bartenders are given a comp check every night. They can use this check however they wish, to buy people drinks, hook up the regulars, whatever they choose to do. In general, the checks are usually around $50, but I’ve seen as high as $200, and occasionally unlimited. The idea being that everything goes through the register, so there is at least accountability. Eliminating shrinkage all together is actually undesirable, as you tend to lose your regulars that way, and without regulars it’s harder to attract other people. Nobody wants to drink in an empty bar.

The comp check is often complemented by pricing set at the bartenders discretion. If you tip well, it’s likely that happy hour will never end. Almost universally, bartenders can ring whatever drinks they want through at happy hour pricing, any time of the day. Less commonly, employee discounts can be given at the discretion of the bartender. Between discounts and comp checks, the savings from tipping well can be substantial. For example, say one group of 4 people has three non-happy hour drinks at $5 a piece, for a check of $60. They tip $9, for a 15% tip, and a total of $69. A second group does the same thing, but the bartender takes $8 off his comp check to buy the group a round, and charges $2 for the same drinks, with 8 landing on their tab, comprising a $16 check. The group tips 50% of what the check would have been, $30, so they have a total bill of $46. It’s in the interest of the bartender to continue using his comp check and discount discretion on the second group.

The majority of inventory control problems actually stem from heavy pours, not from comped drinks. Knowing these rules, the easiest way to minimize your bill is to target specific bartenders and tip them heavily. Often, the bartender will test the waters by buying you a round. In this case, I would suggest tipping the bartender whatever the round would cost, plus whatever you usually tip. This shows the bartender that you aren’t going to waste his comp check. In general, I would suggest opening tabs with the same bartender a few times in as many weeks, tipping 30-50% each time, with the percentage going up the lower the bill is. It’s best to go in when the bar isn’t crowded, so you can befriend them, which has a host of other benefits. Nobody can get you into a full bar faster than a good bartender, bartenders usually have a pretty decent sense of humor and know tons of people, and can provide high-priority service. If you can play the game, you can enjoy superior service and substantial discounts.