Shanghai Restaurant Loses $15,000 After Employing ‘Pay What You Want'

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One Chinese restaurant owner believed diners would be "rational and fair" when it came time to pay for meals — but this was far from the case.

Shanghai restaurant food

It’s nice to think of humans as respectful, virtuous creatures who strive to do right by each other and pay the appropriate dues. Unfortunately, this often isn’t the case — a hard lesson learned by one Chinese entrepreneur after implementing a “Pay What You Want” promotion that went totally south, Shanghaiist reports.

Apparently, brand new restaurant owner Liu Xiaojun and her two business partners let customers order as many dishes as they wanted, permitting them to pay as they saw fit. The three of them apparently believed in the “inherent goodness of human beings.”

The problem? Practically no one paid nearly enough to cover the costs, badly hurting the eatery's bottom line in the process. In fact, Xiaojun’s restaurant lost $15,000 in just one week, after some customers only paid 10 percent or less of the meal’s value.

One of the partners even took off to his hometown, promising never to come back to Guiyang, China, where the diner was located. Yikes.

And the cuisine itself wasn’t even the issue: "If our food or service was the problem, then that would be one thing," Xiaojun said. "But according to customer feedback, our dishes are both filling and tasty. It's just that the payments don't match up with the evaluations."

This isn’t the first time a Chinese diner has tried out the “Pay What You Want Policy” to great disappointment. In 2013, a Fuzhou buffet restaurant owner was hoping to combat China’s “moral crisis”— a result of the 1960s Cultural Revolution. That restaurant lost $15,000, too, over the span of a month.

Conclusively, “Pay What You Want” is nice in principle. In the real world, however, it rarely works as intended. 

Banner Image Credit: Flickr user hans-johnson

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