Greek Restaurant Offers its Own ‘Greek Bailout’

Paula Douralas, the owner of Santorini Grill, has invented her own version of a “Greek bailout” at her Williamsburg restaurant. Since November, she has run her restaurant under a “Pay what you want” policy, The Brooklyn Ink reported.

“People are shocked, afraid of it. I can see it in their faces,” said Douralas, while taking a smoke break in back of the restaurant. Douralas, 55, has cropped blonde hair and a blunt but good-natured attitude. “They go by. They read it. They are like ‘What is this? It’s too good to be true. What’s the catch?’”

She insists that the plan is working, although, on a recent Friday night, the restaurant was about half full.“It hasn’t hurt me,” Douralas said. “It brings a lot of people that didn’t know I existed.” She said the first three weeks were busy with all the media attention, but now she has a steady stream of new diners and estimates a 15 percent increase in customers. She has recently decided to extend the pay-as-you-feel plan indefinitely.

Still, the approach comes with some risks, according to Professor Martin Natter, Chair of Retailing at University of Frankfurt in Germany who co-authored a paper on pay-what-you-want pricing mechanisms for the Journal of Marketing in 2009. The Brooklyn Ink reports:

The study found that customers may appreciate the novelty of the concept and that long-term relationships and loyalty to a certain business may increase the price paid.  “If several persons jointly visit a pay-what-you-want restaurant, social norms may be pretty strong,” he wrote in an e-mail. “Nobody wants to lose his face by paying very low prices.”

The result was some confusion. New customers had to quell their fear that the whole pay-what-you-feel deal wasn’t a scam. Then they have to navigate a menu that lacks both prices and descriptions of the dishes; diners are left to ask the waiter or often Douralas herself what, precisely, they’re ordering. (The food is standard Greek fare done well.)

Douralas isn’t the only one turning to “pay what you will” as a recession strategy. The rocker John Bon Jovi recently told Grub Street about a New Jersey restaurant he recently opened through his charity, JBJ Soul Foundation, where patrons pay what they can, or volunteer in exchange for food.

The bailout starts November 4th

The Santorini Grill offeres a different sort of Greek bailout plan.

What do you make of this trend, readers? Does “pay what you will” attract you to a restaurant, or is the policy off-putting?

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