"Pay What You Think It's Worth" Scheme Pays Off In Germany

Ernest Gill, dpa Hamburg

The latest trend in the European restaurant business is the pay-whatever-you-think-it's-worth gimmick, and enterprising eateries in Germany say it pays off big time.

Taking a tip from the rock group Radiohead, which offered its latest album via the Internet for whatever buyers were willing to pay, restaurant owners in Germany say the idea of letting customers decide how much their dinner is worth to them is great for business.

Until a few weeks ago an Iranian ethnic restaurant called Kish in Frankfurt was empty most nights. Then owner Pourya Feily posted a sign out front saying "Pay What You Want" for entrees. Beverage prices are fixed, but everything else is up for grabs.

"Now we're full every evening and the amazing thing is that people are quite reasonable in paying a fair price," says Feily. He concedes that the patrons tend to pay less than the fixed prices he used to charge. But the difference is made up in the increase in trade.

"People pay about 6.95 or 7.95 euros (10 or 11.80 dollars) for an entree, which is quite acceptable," he told RTL Television.

He and Radiohead are not the only ones. Across Germany, wine bars, hotels, hairstylists, gourmet food shops and even some cinemas have taken up the "Pay Whatever You Want" slogan.

"Admittedly, it's a gimmick," Frankfurt marketing analyst Martin Natter told RTL. "Everyone knows it's a come-on. But it's a way of making customers feel they are in control. And it offers them a chance to be gracious and to feel they aren't being ripped off, but rather that they are doing their favourite restaurant or pub or hairstylist a service. Customers like to feel needed and appreciated."

The Iranian restaurant in Frankfurt has made headlines nationwide, and television news crews jostle with customers to report on the phenomenon.

"We could never have paid for such publicity in a million years," says Feily. "At lunch we used to close early due to lack of customers. Now we have up to 150 people, and we can only seat 90, so people have to wait. And that's just for lunch."

If nobody is required to pay a cent, then why do people still pay about what they would pay anyway?

"Basically, people are honest," he says. "They know what their lunch is worth and they are willing to pay that. Most people wouldn't want to cheat anybody any more than they would want to be cheated themselves. And because they set the price themselves, they feel it's a bargain, even if it is just as much as they would have paid anyway."