Tera Bite restaurant works on the honor system…pay what you want or can…

Okay, so imagine this. You go into a fairly upscale restaurant, in a nicer part of town, order some yummy food, drinks (apparently the best espresso on the east side) and when it comes time to pay, you just put your money into the box at the end of the counter.

No, bill, no tip, just give what you want, what’s fair or what you can afford at the moment. Yes, this is called the honor system and you’d think it might now be the best business model right? Wrong.  It works.

As the Wall Street Journal points out, “Ervin Peretz, one of the cafe’s founders, figures that generous patrons cover the tabs of those who pay less than what’s fair. And the business saves money by not having to pay for workers or services to handle financial transactions.”

And I love this: “The approach has allowed Terra Bite to both make money and help out those who can’t always afford a good meal. “We’re not nearly as selfless as a soup kitchen,” says the 38-year-old Mr. Peretz, who also works as a lead software-development engineer for Google Inc. “We’re able to operate without charity.” WST

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