Eliminate Tipping

[ERD50]

For those who are complaining about tipping, the economics of a running a restaurant business necessitate the tipping. 44 percent of all restaurants fail in the first 3 years. Most are already operating on a string.
Restaurant Failure Rate Study

By having the compensation as tips and having the employees report their tips, as most employees tend to have the incentive to underreport their tips, this minimizes the amount of taxes the restaurant has to pay. So this process of tipping ends up being cost control for a restaurant. ...

To be honest with you, I didn't read any further.

Not paying taxes just puts the burden on lawful taxpayers, that 'reasoning' is not going to fly with me (and many others I'd guess).

If all restaurants complied, they'd all be on equal footing against each other, so not a big deal. They might lose a little to people eating out less, but that would be more transparent than pushing the taxes on other people outside the food exchange transaction.

'operating on a string' isn't a license to cheat on your taxes.


-ERD50

 

[Independent]

By having the compensation as tips and having the employees report their tips, as most employees tend to have the incentive to underreport their tips, this minimizes the amount of taxes the restaurant has to pay. So this process of tipping ends up being cost control for a restaurant.

I always assumed that tips on credit cards are 100% reported.

Do we know what percent of tips are cash? I switched from paying cash to using a credit card at some point in my life, so my personal experience is " a shift from cash to more cc payments".

 

[Walt34]

Having heard that some restaurants "skim" the cc tips I tip in cash to make sure the waitress/waiter knows what the tip was even if I pay the bill by cc.

 

[marko]

$60K for a waiter? Seriously?

A true professional waiter in an upscale big city restaurant can make upwards of $250K. Not some college kid, but the kind of person who's been there 20 years, knows food (and can often cook) as well as the chef and has his own clientele. Yeah; seriously.

I always assumed that tips on credit cards are 100% reported.

Credit card tips are reported. Cash tip reporting is subject to the server but is often monitored for 'accuracy' by the IRS by some reporting by the restaurant; I forget exactly how it's done.

You might be able to fudge a bit, but the IRS can look at the servers total sales and deduce that you're only claiming 5% instead of 15%.

 

[Walt34]

A true professional waiter in an upscale big city restaurant can make upwards of $250K. Not some college kid, but the kind of person who's been there 20 years, knows food (and can often cook) as well as the chef and has his own clientele. Yeah; seriously.

I had no idea. That's a long way from "You want fries with that?"

I guess I don't go to that type of restaurant.

 

[marko]

Having heard that some restaurants "skim" the cc tips I tip in cash to make sure the waitress/waiter knows what the tip was even if I pay the bill by cc.

I do this myself, but this often hurts the lowest guy on the totem pole. Many times the money flows downward, not upward.

In many places, the waiter/ess has to also 'tip out' the busboy, bartender, hostess and a few others based upon that night's tip receipts. If s/he is able to show less of a tip, the busboy et al gets less money.

 

[Music Lover]

In Canada, no one can get paid less than minimum wage, wait staff included. The current minimum in my province is $10.70. A friend is a waitress at a local chain restaurant and works 2-3 days a week. She makes about $10k a year in wages and about $30k a year in tips. She declares about $2k of the tips on her taxes, which leaves $28k of tax free income each year.

$40k a year with $28k of it tax free is a nice living for many.

 

[Chuckanut]

$60K for a waiter? Seriously?

Well, in Europe, a waiter is a professional job in many restaurants. My first time there I was surprised at how many gray haired old guys were waiting tables at the better restaurants.

Even in the USA a good server can make pretty good money. I figure a waiter making $60,000 a year makes more sense than some hoopster, running back or outfielder making $5,000,000 a year.

 

[PhrugalPhan]

Just to add fuel to the fire... a posting from last Friday (though hardly surprising): How technology is making us tip more than ever - The Washington Post

 

[Music Lover]

There is no shortage of people who get offended if a millionaire athlete doesn't tip "enough". But tipping on a take out order? I don't feel that a tip is required at all, regardless of my income. IMO, picking up food as a take out is no different than buying a roast chicken at the super market deli. I don't tip the checkout person eat the grocery store, and I don't tip buying take-out food.

Millionaire QB Drew Brees leaves $3 takeout tip as online debate erupts | Toronto Star

 

[braumeister]

But tipping on a take out order? I don't feel that a tip is required at all, regardless of my income. IMO, picking up food as a take out is no different than buying a roast chicken at the super market deli. I don't tip the checkout person eat the grocery store, and I don't tip buying take-out food.

Of course it's not required.
But I always leave an extra buck or two when I pick up a takeout order. It always gets me a surprised and happy smile, so it's well worth it.

 

[ERD50]

Having heard that some restaurants "skim" the cc tips I tip in cash to make sure the waitress/waiter knows what the tip was even if I pay the bill by cc.

All the more reason the compensation system should be up to the 'manager' - let them 'manage'.



I had this exchange earlier...

For those who are complaining about tipping, the economics of a running a restaurant business necessitate the tipping. 44 percent of all restaurants fail in the first 3 years. Most are already operating on a string.
Restaurant Failure Rate Study

By having the compensation as tips and having the employees report their tips, as most employees tend to have the incentive to underreport their tips, this minimizes the amount of taxes the restaurant has to pay. So this process of tipping ends up being cost control for a restaurant.

To be honest with you, I didn't read any further....

'operating on a string' isn't a license to cheat on your taxes.

-ERD50

But I went back later and read further, so...

... The best servers are going to migrate to where they can make the best money, the server is your salesman in a restaurant, and they need to be able to read the customers in a way to maximize the bill for the owner while keeping the customer satisfied and happy, even as they spend more than they planned, ... The best restaurants know how to select the best servers. ... Good servers are a tremendous source of information for management of a restaurant as well, ....

To pay servers hourly you will tend to get servers that slow down the process just a bit because making customer happy is now the only thing that counts ....

All of the above can and should be handled by 'management', after all, they are called 'management', let them manage.

I worked in a production environment - our goal was quality and volume. A good manager works to make sure you get both.

Why would a good manager delegate this work to the customer? A manager should stay on top of their employees and make sure they are delivering superior service.

I am so glad tipping isn't more prevalent than it is already. I'd rather call and complain to a real manager that the company service was sub-par, than to rely on the collective 'bribes' of customers.

Sorry, tipping is just plain stupid, no way around it, it can't be rationalized.


-ERD50

 

[utrecht]

I know a bartender at a downtown oyster bar who owns a nice home in walking distance to the central city, and raised and sent to college 2 daughters with a non-working wife. And they can afford to go skiing frequently.

Ha

10 year Dallas police officers don't make $60K. To me, carrying food from one spot to another isn't deserving of that kind of money. I tip pretty well at the places I eat because the wait staff at the kinds of places I eat are mostly young people trying to get started in life. I rarely eat at high end places, but after reading this, I'm going to have to start tipping less when I do. I don't see how a waiter carrying my steak deserves three times as much of a tip as the waiter carrying my chicken fingers.

 

[MikeP]

A new Philadelphia (I think this is in Philadelphia) restaurant recently dealt with the tipping issue here: No-tip restaurant offers food for thought on employee wages, benefits - Chicago Tribune

Where the wait staff makes a decent wage and has benefits, but the food apparently is not more expensive than tipping-encouraged restaurants. I hope there is a follow up story in a few months as to whether the owners could maintain the set-up. I would bet not.

ETA: the prices actually are adjusted higher to pay for the benefits. And akthough "no tipping is necessary" the owner says,


Give me a break.... Either allow tipping or don't allow it.

In Europe now it is very much following the US culture of tipping becoming more prominent and expected. Which like you say is ridiculous, they earn a normal working salary and have all kind of benefits. if i feel like the service has warranted a tip, i will leave something, but not the 18% which i see everywhere in NY now. just crazy they ask that much, nearly feeding an extra member that price.

 

[Tadpole]

Does someone tipping 20%, in essence, help pay for the meal of someone not tipping or tipping 5%? (I guess I am wondering if high tippers keep prices down for low tippers.)

 

[Dash man]

I don't mind tipping. DW started out as a waitress in a snobby resort and told me many stories of what she had to go through to please her customers. She felt the wealthiest customers typically were the stingy ones. They work hard for their money, so as long as long as they're not standing around gabbing while people are waiting for service, I give them 20%.

 

[marko]

Does someone tipping 20%, in essence, help pay for the meal of someone not tipping or tipping 5%? (I guess I am wondering if high tippers keep prices down for low tippers.)

Well, the tip goes to the server not the restaurant that is setting the prices.

What over tipping does do is encourage a server stay at an establishment rather than move on.

 

[marko]

10 year Dallas police officers don't make $60K. To me, carrying food from one spot to another isn't deserving of that kind of money.

In most serious, busy restaurants (I'm not talking Denny's) it's a lot more complicated than just 'carrying food'...it requires keeping a lot of balls in the air, keeping a lot of stuff in your head, timing things and a lot of poise under pressure. It is a lot harder than it looks.

But, oh...there could be an entire thread about people who are not "deserving of that king of money" but I suspect waiter/esses wouldn't be among those high on the list.

 

[2B]

I worked in restaurants many, many years ago. One of them was an Ivar's Mexican restaurant at a mall south of Seattle (can't remember the name). In the restaurant service industry, income was primarily determined by tips and back then 15% was a big time tip. Waitresses/waiters were supposed to give the busboys 10% of their tips which definitely didn't happen where I worked. The competition for spots at top tier restaurants was stiff. The better places "sold" the positions. Waiters/waitresses had to pay to work there and if they weren't top notch they were immediately let go.

Back in the 1980s, I knew a laid off engineer that got a job at a high end Houston restaurant. He got an engineering offer a couple of years later as things recovered. He hesitated to quit being a waiter because it paid better than being an engineer. He did go back into engineering because he couldn't see himself still being an effective waiter when he was 50.

Being a waiter/waitress is not a "minimum wage job" at many decent, well run restaurants. Tipping as a percentage of the check creates enormous disparities in people's earnings. I'd personally love to see tipping eliminated but I doubt our culture would accept it easily. The other side of this pathetic practice is the "automatic tips" where you have to deselect outrageous tips that get hidden in the charge. This is especially true when the server flips a screen around for you to "authorize" charging your CC. If you don't look carefully and speak up, you might be tipping 50% or more if you add a tip onto the tip.

BTW, it's idiot Americans that are distorting tipping in Europe. I've told people I'm with that the tip is included in the bill and they still insist on throwing down an extra 15-20%. The French have come to expect this from Americans but they think we're stupid.

 

[Independent]

Having heard that some restaurants "skim" the cc tips I tip in cash to make sure the waitress/waiter knows what the tip was even if I pay the bill by cc.

Some restaurants require "tip pooling" or "tip splits". That's illegal in some states.

Servers will often voluntarily "tip out" the other people who make the server's job go better, but that's not a fixed percent, just what the server thinks is right for the night.

I think it's consistently illegal for management to claim that any portion of a true "tip" has to be shared with the owner. Mandatory "service fees" are a different isue.

Tips, Tip Pooling, and Tip Credits: What Service Employees Need to Know | Nolo.com

 

[Texas Proud]

I remember reading about a lawsuit on gender discrimination... it was some high end crab or lobster place... all were male... and they said that all made over $100,000... this was many many years ago.... I was not making anything close to that when I read it and was just dumbfounded....


BTW, talking about a high salary that is not deserved.... try a doorman in NYC.... another $100K plus job....

 

[ampeep]

In Japan, tipping is not expected and often discouraged. Not sure if that could work here in the U.S. unless some BIG changes are made.

Years ago, my sister worked in the personnel dept for a hotel & told me that the bell captain made more that the hotel manager.

 

[braumeister]

Interesting map today showing the minimum wage differences among states.

I well remember as a teenager when I became 18 years old and they suddenly had to pay me minimum wage which was $1.50 (back in the 1960s). Based on cumulative inflation, that would be $9.82 today.

 

[utrecht]

In most serious, busy restaurants (I'm not talking Denny's) it's a lot more complicated than just 'carrying food'...it requires keeping a lot of balls in the air, keeping a lot of stuff in your head, timing things and a lot of poise under pressure. It is a lot harder than it looks.

But, oh...there could be an entire thread about people who are not "deserving of that king of money" but I suspect waiter/esses wouldn't be among those high on the list.

Waiters in general wouldn't be, but the ones making $60K+ certainly would. Waiters making more than Engineers or Cops or Teachers? Come on. Get serious

 

[marko]

Waiters making more than Engineers or Cops or Teachers? Come on. Get serious

Maybe I got it wrong.

Then again, there's this article about waiters making $150K:
Waiting tables at nation's high-end restaurants can earn up to $150,000 a year | Daily Mail Online

People make what people are willing to pay.