Is it Time to End Tipping
There have been a lot of discussions recently about how tipping the US has gotten out of control. Everyone, it seems, wants to be tipped for doing their jobs. Go to the local doughnut shop, walk up to the counter, order two donuts and a cup of coffee and there is a) a tip jar on the counter and b) a tip line on the credit card reader. Sorry? You want a tip for literally putting two donuts in a bag and filling a cup with coffee? I think not! The same is true at many fast food joints.
The issue has become so pervasive that there is a sub on Reddit dedicated to this very topic. There, people share their experiences some of which, assuming they are true, are just ridiculous. Tips being added to tickets before the customer receives the bill, tips amounts being changed, servers and cashiers giving you the evil eye if you don’t tip the “right” amount, etc.
It’s gotten so ridiculous that I recently bought an item online and on the payment page I found this:
In what world should a WEBSITE expect a tip? What am I tipping for? WHO am I tipping? I just paid 80 bucks for product and the COMPANY expects a tip?
Did I mention that tipping seems to have gotten out of hand?
According to both Tiphaus and thehistoryofthe (and others) tipping is “the practice of giving a gratuity, that is an additional payment to service in recognition of their work.” The underlying principle is that you are rewarding the provider of a service for their effort, promptness, or exceptional service.
Tiphaus suggests that historically tipping was often a payment, perhaps surreptitiously, to the waitstaff of a pub or tavern to ensure good service. It was also a means of asserting class superiority, as the upper class gave coins to the servants as a token of appreciation or to express goodwill. This was also a means of “reinforcing social hierarchy – the giver had money and power, the receiver, service and deference.”1 This same source notes that what began as a voluntary gift has become and expected custom.
In the US, tipping has allowed restaurant owners to reduce what they pay their servers noting that tips (which should be a reward for good service) can make up the difference between what should be paid and what actually is paid to the worker. This practice is known as “tip credit”. The federal “cash wage” is currently $2.13. Most states pay this wage. Some states pay above that and others pay well above that. This is important to know, since this can have a profound effect on the server’s earning (and their reliance on tips to live).2
Some (many?) restaurants now put the tips into a pool and distribute them equitably among the staff – including kitchen staff who are presumably adequately paid. This practice, to me, removes the incentive for the individual to provide good service. After all, why go the extra mile to provide exceptional service if you’re going to be rewarded the same as sorriest person on the team? Moreover, from the customer perspective, why should I reward good service if I know my specific server will not receive that reward?
Tipping has other effects as well. For example, servers have an incentive to ’turn tables’ quickly since the more people they can serve the more potential tips they can make. This obviously pleases the restaurant management, as more people in the door also means more revenue. It is interesting that the French have such a different perspective here. In France, according to Business Insider, French waitstaff are considered professionals and are compensated accordingly. Unlike the US which often considers waiting tables as a temporary job and pays accordingly. Tipping in France, while not forbidden, is also not expected and the employer does not adjust the food servers’ pay accordingly.
As a consequence, the waitstaff are not incentivized to push you off your table so that others can be served (and they can make more tips). To be sure, eating is more ritualized in France than in the US and a slowly savored meal while relaxing in conversation with friends is part of their cultural identity.
While tipping in the US is getting out of hand, some cultures look down on the practice. In Japan, for instance, it is considered rude; exceptional service is part of the job. In many parts of Europe, a service charge is simply added to the bill, making tips unnecessary. Similar to France, Australia and New Zealand pay their servers well making tips unnecessary. That said, it is still good practice to reward for exceptional service with a tip.
At the end of the day, I don’t mind tipping for quality service. If someone provides exceptional service – they’re friendly, helpful, courteous, prompt, and reasonably social (without being overbearing or obsequious) I’m happy to reward them accordingly.
It is common (and expected) practice to base the tip on the total bill. I don’t agree with this. Why should a waiter who provides an identical level of service receive more for their service simply because they work at an expensive restaurant? My wife and I often visit Cracker Barrel where we can generally eat for less than $30. At 15% this would result in a $4.50 tip to the server. Recently we went to a higher end restaurant where the meal total was $100 resulting in a $15 tip for the waiter. Did that waiter provide better service than the Cracker Barrel waiter? Nope. So why were they rewarded more?
I also don’t agree with ’tip sharing’ where tip money goes into a general pot and is distributed equally among all staff. My attempts to reward the server for exceptional service is undermined by the restaurant’s policies. And, as I mentioned earlier, what incentive, then, does the individual have to go above and beyond to serve her clients?
Finally, I’ve heard (though admittedly I don’t know that it’s true) that some restaurant owner/managers pocket some of the tip money.3 This is, unfortunately, apparently legal in some jurisdictions. I can assure you that if I know this is happening, I won’t be visiting that establishment, just as I’ll never again visit the website I referenced early on in this post.
At the end of the day, to me the best approach is for restaurant owners (and others) to pay a fair wage to their employees. This ensures that everyone is treated equitably and increases the ability of the company to set and enforce expectations regarding the quality of service. After all, if you’re only paying $2.13 per hour, can you really expect your staff to provide high-quality service?
Paying a fair wage ensures a happier, more professional staff and that translates to a better experience to the customer. And, in turn, increases the likelihood that the customer returns.