No one knows when or why this started, but there are a few reasons it has become a common practice:
You can keep an eye on things while you have your back turned: While this works well for patrons past and present looking to avoid a fight, the bartender can also keep an eye on the bar while he or she is grabbing a bottle. He or she can take note of who is ready for another round and who is trying to sneak out.
Patrons can look at things without gazing directly at them: Dirty paintings were often hung in bars in the 1800's. Looking at these paintings through the bar mirror was a lot less creepy than looking directly at them. Today the same method works well for getting a look at that girl in the tiny dress sitting on the other side of the bar.
A mirror makes the liquor area look fuller: What's better than a bottle of alcohol? Several bottles of alcohol! A mirror reflects the bottles, making it look like the bar has a huge supply of booze. This technique is commonly used in high class food presentation, particularly desserts.
It makes good advertising: Most liquor companies distribute etched mirrors to establishments in order to promote their brand. Too drunk to know what you want? Read what’s on the mirror. Recently an advertising agency in Amsterdam took this a step further by created this video-playing mirror to encourage patrons to drink a local brand of sparkling cider:
Posted 1865 day ago