UPDATE | Terra Bite Lounge

Earlier this year we talked about the pay-what-you-want honor system of Terra Bite Lounge in Kirkland, WA. This is the coffee shop where there are no prices for the coffee drinks, pastries, and sandwiches. Instead, customers pay whatever amount they feel is appropriate.

The Wall Street Journal today gives us an update on Terra Bite Lounge. The honor system seems to be working just fine. According to the article, daily customer counts at Terra Bite average around 200 with each customer paying $2 or $3 per order.

Let’s keep in mind the owners of Terra Bite Lounge aren’t getting rich from this coffee shop—their café breaks even. However, the owners aren’t doing this to get rich. Instead, this endeavor is more an experiment in the greater good of public honesty.

The owners of Terra Bite explain the reasoning behind their voluntary payment this way…

Terra Bite is not only an experiment into the level of public honesty, it is also a visible demonstration of that high level of honesty. I think that has some secondary benefits.

In my life, there have been times when I've felt like being good and honest, and other times when I've felt cynical. When I have felt cynical, it was usually because I felt that I was surrounded by corruption. On the other hand, when I feel that people around me are good, I feel more like being good.

Well, by existing, Terra Bite demonstrates to the public that they are surrounded by a high level of honesty. I believe that helps reduce the general level of cynicism, even for those that never visit Terra Bite.

The cafe chains base their business on the popularity of coffee. We do also; but we also base it on people's notion of wanting to be good. I believe that this personal notion of "I am a good person" is quite universal; even people who we don't regard as good -- someone in prison, say -- is often there not because they don't have an ethical system, but because they acted out too strongly on their ethical system. So I believe we're on solid ground basing a business on that. READ MORE

Refreshing to hear, eh?

Comments

[Ben Rowe]

I think this honesty pricing could become more widespread.

Here in Melbourne (Australia), we have a restaurant called 'Lental as anything' that uses the same system. They've been around for years, so I assume that it works for them.

[jim]

In May, I was in the downtown Kirkland area for an errand and stopped by Terra Bite for a grande mocha. I thought the alternative capitalism was an interesting concept, and happily paid the equivalent of what I would at Starbucks.

The store felt like a large room with an espresso cart inside. There were a few strange-looking people milling around, but there was nowhere to sit (perhaps because of the one-employee model would assume they'd also bus tables). The coffee was terrible.

When Starbucks has occasionally pooched a drink, I have no qualms about asking them to redo it, nor do they hesitate in doing so. Yet here, it didn't seem to be worth my time.

[Juanita]

Excuse me while I digress a bit. I was with you on this experiment up until the statement by the owners that "even people who we don't regard as good -- someone in prison, say -- is often there not because they don't have an ethical system, but because they acted out too strongly on their ethical system." Obviously these owners live in a mental utopia. I am familiar with Federal prison, I visit a relative in a prison. The canvass of ethics is blank. If as the owners say they acted out too strongly, it is not based on good ethic and is responsible for murder and fraud and all sort of crimes against humanity. Most, not all, even if they wanted to be good, would not have the ethics to know what good is, unfortunately. Interestingly they do have a system of marketing and commerce in prisons, not based on honesty, but based on intimdation and weak against strong, not good ethics.

[johnmoore (from Brand Autopsy)]

Jim ... nice to hear from someone with first-hand experience as a customer of Terra Bite.

The one-employee on duty model frightens me. A coffee shop compromises a lot with just one employee. Tables and condiment bars do not get cleaned often. Floors do not get swept as often as they should. Stress on the one-employee is bound to be high.

But terrible tasting coffee just doesn't cut it. The ante nowadays is having good-tasting coffee. This experiment in honesty will only go so far if the coffee tastes bad.

Thanks for sharing your experience at Terra Bite.

[johnmoore (from Brand Autopsy)]

Juanita ... I interpreted that line differently than you. My interpretation was the owners of Terra Bite believe GOOD is in everyone, including people who have been found guilty of being bad.

[kristen]

I lived in the Pacific Northwest for many years and overall, the people are just plain nice. I would love to see the results of an experiment like this in a place like New York. I wonder what would happen if we geo-target this "honesty is the best policy" idea.....might make for a great blog.

[Marty Moore]

I read this post and am immediately reminded of Macaroni's Grill. Launched in 1988, I believe, it promoted the unique and altruistic concept of wine by the honor system. While the food was pretty good, I recall many people were drawn to that gimmick. Its sales were high. Now the chain is up for sale, but I doubt it's because of the honesty-is-the-best-policy wine policy. I'd like to see another company soar using that philosophy. It makes me want to go there and do the right thing.

[Paul (from Idea Sandbox)]

After living in NYC I know a concept like this would thrive. The difference is that the New Yorkers would also honestly tell the owners if they felt the coffee wasn't up to par... or if the floors/condiment bar were too dirty.

[Kayla]

The original article said the shop had one paid BARISTA per shift. It didn't say how many employees per shift.

[Kayla]

The original article said the shop had one paid BARISTA per shift. It didn't say how many employees per shift.

[Dan]

Doesn't treat employees fairly - owner is bipolar = great concept - inept owner and manager - potential employees RUN AWAY

[Terra Bite]

In response to the claim about coffee quality, I want to point out that Terra Bite just won the Seattle Magazine 2007 award for best eastside cafe. Terra Bite coffee is regarded as excellent. We use Caffe D'Arte beans and our baristas are highly trained.

See link to article at http://www.terrabite.org/ .

- Terra Bite

[Terra Bite]

oh, and in case it's not obvious, "Dan" is actually a girl and is a disgruntled ex-employee. This comes back to Terra Bite having good baristas ...