Popular Bay Area bakery BANS tips for staff - but workers are happier than ever

A popular Bay Area bakery has banned tipping staff and opted to raise prices to fund a higher wage instead. 

Backhaus removed the option for customers to tip staff at its two branches last month.  Instead, it raised prices by an average of 11 percent - about 25 cents on a typical pastry.

The price rise goes towards funding a $23.50-an-hour wage for entry-level staff and benefits such as paid parental leave, comprehensive healthcare and a 401(k), the San Francisco Chronicle reported. 

Customers and staff at the two shops in San Mateo and Burlingame - cities about 20 miles south of San Francisco - are happy with the move.

The move by Backhaus comes after months of increased customer frustration about 'tipflation' and the rising cost of dining out. 

Backhaus , which has one branch in in San Mateo and another in Burlingame, removed the option for customers to tip staff 

The popular Bay Area baker raised the prices of their 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 affect on July 1.

Under SB478, that will ban junk fees in the state, California restaurants will no longer be able to use the service fees meaning many will have to fold them into menu prices. 

Some restaurants and cafes have expressed concern that offsetting costs by raising prices will put inflation-weary customers off, resulting in lower sales. 

However, Backhaus co-owner Anne Moser said the reception from her customers to the new model has been mostly positive. 

Some customers don't realize the price rises until they read the sign by the till that explains the change Moser explained. 

'You will notice that we have increased prices to be able to offer out team a wage that is closer to san Mateo County's living wage' the sign reads. 

'We believe it's only fair to provide stability to our team and those kinds of benefits and a fair level of wages so they can afford to live in the community that they serve,' Moser told the Chronicle. 

Adding: 'That's part of the cost of doing business around here, so we need to price our products accordingly.' 

Backhaus in San Mateo and Burlingame now pays their entry-level staff $23.50 an hour as well as providing parental leave and healthcare

The highest hike was for Backhaus' breakfast sandwich which rose from $13 to $15.50.

Backhaus' most expensive pastry is now a $9.50 seasonal galette, up from $8.75. 

All the bakeries other pastries went up by just 25 cents. 

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Each item was analyzed separately, Mosey explained, to consider labor and ingredient costs for each, as well as how their competitors options were priced. 

Mosey said she and her co-owner Robert Moser also used a Massachusetts Institute of Technology 'living wage calculator' to assess heir staff's needs 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,' said.

Adding that the higher price just 'comes with the territory of living here.' 

'They shouldn't be dependent on tips,' another customer, Preeti Deb said. 

However, Kerri Hampton, questioned why 'it all comes back to the consumer,' through tips or increased prices.