Eliminate Tipping

[retirementguy1]

I worked as a waiter in Las Vegas for the last ten years. I would have loved it if 18% gratuity was included with every check. The vast majority of foreigners only leave 10%. This is also very common for military personnel. Most people also don't realize that the server has to tip out bartenders, sommeliers, bar backs, food runners and bussers.


There was one restaurant I worked at where the mandatory tip out was 10% of sales. So if someone tipped 10% I basically worked for free. There was one instance where I had a $400 check and the guy didn't leave a tip at all. I still had to tip out $40!!!!!


Also, 6 figure incomes in food service are extremely rare and they are also in high COL areas. Secondly servers are really horrible with money. The moment they got a job like that they would buy a $60k Mercedes. The lifestyle is not very conducive to FIRE.

 

[Midpack]

There was one restaurant I worked at where the mandatory tip out was 10% of sales. So if someone tipped 10% I basically worked for free. There was one instance where I had a $400 check and the guy didn't leave a tip at all. I still had to tip out $40!!!!!

As I noted earlier, tip pooling is another matter, and evidently more and more restaurants are abusing the practice (I was never forced to pool tips, though I often did so voluntarily). More of us might agree on that, and that would begin to help servers...

And I assume 99%+ of diners have no idea which restaurants they frequent use/abuse tip pooling. Though turnover would be one of the telltale signs.

 

[Philliefan33]

There's another variable I haven't seen mentioned yet. Not all servers make minimum wage. In PA, a couple of years ago, my danger was paid $2.35 per hour by the restaurant. She had to share tips with the bartender/busboys/runners. Most shifts she was able to average $10/hour but not always.

Compare that to a cousin who was working as a server in OR at the same time. She got paid minimum wage, which was $10.xx per hour. Then she got tips on top of that. The aunts and uncles were shocked to learned that my D was only paid $2.xx an hour.

 

[mickeyd]

To eliminate the need for tipping the business owner only needs to increase his posted price by 15-20%, pass it all on to the employees and post sign "Tipping not Allowed".

 

[Midpack]

There's another variable I haven't seen mentioned yet. Not all servers make minimum wage. In PA, a couple of years ago, my danger was paid $2.35 per hour by the restaurant. She had to share tips with the bartender/busboys/runners. Most shifts she was able to average $10/hour but not always.

Compare that to a cousin who was working as a server in OR at the same time. She got paid minimum wage, which was $10.xx per hour. Then she got tips on top of that. The aunts and uncles were shocked to learned that my D was only paid $2.xx an hour.

You probably realize, but federal minimum wage for tipped employees is $2.13/hr. Many states have higher minimums, but nothing like the general minimum wage. If wages and tips are less than $7.25/hr the employer is required to make up the difference. BUT I am sure too many employers don't make up the difference, with all the cash transactions, objective accounting would be essentially impossible.

http://www.dol.gov/whd/state/tipped.htm

 

[retirementguy1]

As I noted earlier, tip pooling is another matter, and evidently more and more restaurants are abusing the practice (I was never forced to pool tips, though I often did so voluntarily). More of us might agree on that, and that would begin to help servers...

And I assume 99%+ of diners have no idea which restaurants they frequent use/abuse tip pooling. Though turnover would be one of the telltale signs.

This situation was not a tip pool. I have been in tip pools and I prefer them. It eliminates bias from the managers and hostesses. It is frustrating to have your financial fate in the hands of an 18 yo girl.

A tip pool is based on a point system. Ex. Servers get 1 point, bartenders get 1 point, bussers get .33, and runners get .4. You add up the tips at the end of the night and divide it by the number of points. So to make it easy lets say the server makes $100, the busser makes 33, and the runner makes 40.

 

[Chuckanut]

I was in Holland several years ago and a group of us had lunch at a rather nice brewery. After the meal was over, one lady insisted on leaving a tip on the table despite being told several times that tipping was not expected or needed. As we were leaving the waiter stopped us and handed the tip money back, thinking we had left it by accident.

 

[traineeinvestor]

Restaurants in many other countries routinely provide great service and stay in business without tipping being either required or expected. The US is the only country I visit where large tips are expected - and the US tipping culture does not result in better service. In most of the countries I visit, tips are entirely optional and a few (like Hong Kong) have a mandatory 10% service charge added to the bill - the US practice of adding a "discretionary" 15-20% to a bill is something of an anomaly.

 

[Cobra9777]

...And the article makes points that are way too easy to counter. People can't do math - that's idiotic and sad...

Actually, that's NOT idiotic and sad. I go out to eat with my 82-year-old FIL at least once every week. He insists on paying every other time. He had a stroke several years ago, so in fact, he quite literally "can't do the math." We have a "routine", where he gives the waitress his credit card. When she returns, he asks me, what do think about a tip? At that point, I grab the bill, fill in the necessary amounts, etc, and return it to him to sign. It makes for one less humiliating moment for a proud American engineer who helped put a man on the moon, but can no longer calculate 15% of $25. But yeah, that's idiotic and sad.

 

[utrecht]

I doubt he was referring to 82 year old stoke victims he said people cant do math

 

[samclem]

. . .its like other low wage jobs where the tax payer gets to support the workers at various companies via food stamps, etc. even if I don't get anything from that low paying company.

I don't understand this reasoning. The taxpayer would still be paying these benefits (food stamps, etc) if the person had no job at all, so the employer really isn't part of the equation. Yet people say this--that the government is somehow "subsidizing" employers of low-wage workers.

As far as I can see, it only makes sense if we assume that the employer isn't paying for the services of the employee, but is instead responsible for meeting all the basic material needs of their employees in exchange for their labor--so the government's food stamps help the employer meet their obligation. But that would be far different than the normal understanding of the employer/employee relationship.

Lots of low-wage part time workers have a couple of jobs to make ends meet. It has always been that way.

 

[sengsational]

To the folks that said "not in my lifetime", I have a question for you...

Wouldn't a law that forced every business, including restaurants, to pay the real minimum wage precipitate a no tipping culture in no time? I'd think twice about tipping in those cities (that city?) that implemented that law locally.

 

[Texas Proud]

While there are certainly many good servers who are not well paid, these are sweeping generalizations.

A truly good, or even half decent server in an upscale restaurant can make a very good living, without any advanced education. I worked in a moderately high end restaurant the last summer before I graduated college, and I made more per month in that restaurant than I was making as a Process Engineer for the first few years starting out. Yes, I did better $ in the long run, but there are also some really high end servers (much more talented than I was as a server) who take home six-figures nowadays - guaranteed. And if you asked truly professional career servers what they think about eliminating tipping, I suspect they'd be overwhelmingly opposed...

And between those who are not well paid, and the top end six figure servers, there's a whole continuum of folks who are fairly or even well paid for the service they provide. Like most professions...

Not to be too negative.... but you used my quote way out of context....

I was talking about a lunch service at a chain where lunch was $6 to $8.... I would challenge you to find anybody doing that making a decent wage....

High end restaurants are a much different experience.... I remember going to the 4 Seasons during a closing... I think 8 people where there... I think the bill came close to $3,000... I did not see the tip but would not be surprised if it were $600.... much more than my small $1.50 tip for my lunch....

 

[photoguy]

To the folks that said "not in my lifetime", I have a question for you...

Wouldn't a law that forced every business, including restaurants, to pay the real minimum wage precipitate a no tipping culture in no time? I'd think twice about tipping in those cities (that city?) that implemented that law locally.

A few states already mandate that tipped employees receive the state minimum wage (e.g. california, washington, oregon, etc.) instead of the federal 2.13/hr. I'm not sure how long these laws have been in effect, but restaurants with no tipping are very rare and I've never personally been in one.

From what I can tell from news stories, the no tipping restaurants are generally at the high end, have a fixed service charge instead, and pay substantially more than the minimum wage.

 

[Sunset]

Oh the unfairness of it all.

I go to a restaurant for a $50 meal, tip is $10 for good service.

I go where its $250 meal and the service is good (the same good, after all how good can you carry a tray and ask "will there be anything else"?) and the tip is $50

 

[Sunset]

I don't understand this reasoning. The taxpayer would still be paying these benefits (food stamps, etc) if the person had no job at all, so the employer really isn't part of the equation. Yet people say this--that the government is somehow "subsidizing" employers of low-wage workers.

As far as I can see, it only makes sense if we assume that the employer isn't paying for the services of the employee, but is instead responsible for meeting all the basic material needs of their employees in exchange for their labor--so the government's food stamps help the employer meet their obligation. But that would be far different than the normal understanding of the employer/employee relationship.

Lots of low-wage part time workers have a couple of jobs to make ends meet. It has always been that way.

If you think of all low wage jobs as something teenagers do for spending money, then there is no issue.

If however, you think of some of the people holding these jobs as adults because for various reasons (like criminal record, no high school, etc) then its easy to see one can work full time at one of these jobs and still qualify for food stamps (taxpayer making up the difference).

It is based on the law the permits certain employers to pay less than slave wages. Some wages are so low that it would cost more to house, feed, cloth, and take medical care of a slave assuming you want your slave to live because they cost a lot of money.

 

[samclem]

It is based on the law the permits certain employers to pay less than slave wages. Some wages are so low that it would cost more to house, feed, cloth, and take medical care of a slave assuming you want your slave to live because they cost a lot of money.

Okay, I think we've jumped the shark. I appreciate your explanation. We are clearly coming to this with different understandings about the nature of the employer/employee relationship.

 

[Midpack]

Actually, that's NOT idiotic and sad. I go out to eat with my 82-year-old FIL at least once every week. He insists on paying every other time. He had a stroke several years ago, so in fact, he quite literally "can't do the math." We have a "routine", where he gives the waitress his credit card. When she returns, he asks me, what do think about a tip? At that point, I grab the bill, fill in the necessary amounts, etc, and return it to him to sign. It makes for one less humiliating moment for a proud American engineer who helped put a man on the moon, but can no longer calculate 15% of $25. But yeah, that's idiotic and sad.

Proof by exception? Of course there are some people who may be challenged to calculate a tip.

In the article the OP linked, 'doing the math' was the first of several primary reasons the author used to support eliminating tipping. That would suggest most/many people can't manage calculating a tip. It is idiotic and sad that most people can't do the math, as the OP suggests. It's not hard to do in your head, but today most people have smartphones with calculators, even free tip calculator apps. A few restaurants even print out a range of tips on the bottom of their receipts.

 

[RonBoyd]

Maybe this innovation will help:

How Technology Is Tricking You Into Tipping More

A new report by the tech research firm Software Advice discovered that digital point-of-sale terminals, like the one in my cab, increase the frequency and amount of tips left by customers. What’s the secret behind how these manipulative machines get us to pony up?

How did tipping increase so dramatically? Clearly the service wasn’t 38 percent better. Patrons didn’t suddenly become more generous. Rather, the higher tipping is a result of a few intriguing design decisions by the payment processor.

However, for the average person just trying to do the right thing, these devices can mean hundreds if not thousands of dollars spent unintentionally. ... for example, most of us don’t have the time or mental bandwidth to think about how the way we’re paying affects how much we are paying.

During these times, our brain is operating out of habit, and we quickly act with little or no conscious thought. We remain woefully unaware of how these interfaces leverage our deeper psychology to change our behavior by design.

 

[marko]

I won't name him by name but a very wealthy politician (you see him just about every single day on TV) is notorious for not tipping. At all. Nothing.

He just doesn't tip and God knows he can afford it.

When waiters see him come in they run for the kitchen hoping some newbie will get him.

When he dines with others, they will look embarrassed and throw down a $50 on the table behind his back as he leaves.

Mods: feel free to delete this post if you feel it could become political

 

[Totoro]

It is an interesting scenario, but imagine if waitstaff didn't have to evaluate your ability to tip based on their ability to please you. No one would then be interested in how well you enjoyed your restaurant experience.

Why do you say that? There are more ways than just money to motivate and give feedback to people. Do you pay a significant other a bonus if that person is nice to you to show your appreciation?

Believe it or not, but many people take pride in their jobs and want to do it right, even if they don't really want to work!

In fact, there is much to be said for removing financial incentives and putting in social incentives to perform well, especially since essentially waiting tables is a social job to begin with.

 

[Totoro]

He just doesn't tip and God knows he can afford it.

Do you know why?

 

[fritz]

Originally Posted by fritz
It is an interesting scenario, but imagine if waitstaff didn't have to evaluate your ability to tip based on their ability to please you. No one would then be interested in how well you enjoyed your restaurant experience.

Why do you say that? There are more ways than just money to motivate and give feedback to people. Do you pay a significant other a bonus if that person is nice to you to show your appreciation?

Believe it or not, but many people take pride in their jobs and want to do it right, even if they don't really want to work!

In fact, there is much to be said for removing financial incentives and putting in social incentives to perform well, especially since essentially waiting tables is a social job to begin with.

Given that I find most restaurants we frequent do not really solicit customer feedback (other than some giving receipt/website feedback concern), and we're not going to see customer tipping (at least in the U.S.) as the bulk of waitstaff income go away anytime soon - I don't see a comment like "thanks for great service" with no monetary incentive getting you favor in your favorite places. You could end up being talked about and waitstaff hiding from you in your favorite places - like a well known wealthy politician who has a reputation for not tipping...

I received financial incentives throughout my career (commissions, vacation trips, stock options, management bonuses, etc). The bulk of CEO pay these days is mostly comprised of incentive pay (stock options). I created incentive programs where rewards were paid to non-employees (mfr. to company owned and independent distribution) that were very successful. Don't know too many that don't appreciate a financial incentive with a verbal attaboy (what's a raise?). Incentive pay works IMHO.

 

[Independent]

To the folks that said "not in my lifetime", I have a question for you...

Wouldn't a law that forced every business, including restaurants, to pay the real minimum wage precipitate a no tipping culture in no time? I'd think twice about tipping in those cities (that city?) that implemented that law locally.

I'd like to see a law that says servers get the regular minimum wage from the employer, plus 100% of any tips.

The impact would depend on what customers believe today. I expect a lot of customers think that's already happening, so such a law may not change what they choose to tip.

 

[RonBoyd]

I'd like to see a law that says servers get the regular minimum wage from the employer, plus 100% of any tips.

And how whould Taxes be handled, SS, for instance? (Specifically the employer's portion of SS.) By the employer or the employee? For that matter, how is that treated now?