Eliminate Tipping

[swakyaby]

I worked as a waitstaff at a family restaurant while going to college. A lot of things have probably changed (more people paid cash then rather than credit card), but in California they passed a law at that time that mandated a minimum of 8% of a server's total food and beverage tab was taxable income, regardless if declared tips were less than that. So if someone left little (a few little old ladies thought $0.50 per check was perfectly adequate), it was worse than working for free, it was money out of my paycheck.

Should tipping be eliminated? As long as there are other restaurants that allow tipping, it would be hard for a business to retained quality employees because the higher income they need to provide would result in higher food prices that customers may not be willing to pay.

 

[JoeWras]

I like the "one step up from McD's" model. In my part of the country, that's Panera Bread. Nicer atmosphere, "better" food, real plates, but you do your own counter pickup and bus your own table. They probably have a tip jar on the counter, but I ignore it.

I would certainly try a table service restaurant that uses the "no tipping please, because we already pay a decent wage" policy, but I would like that service card I mentioned.

Not saying it doesn't happen, but I've never seen a tip jar at Panera. However, I have tipped there, directly to the sandwich maker. This was someone who knew my requests and always had special things ready for me without asking. It was only occasional, and I almost felt like a criminal doing it.

In away though, that's what tipping should be, something you really want to do. But it isn't that way, hence this really long and interesting discussion.

Someone else mentioned that perhaps some people like casual service over table service because of the tipping issue. COUNT ME IN on that. I'm really starting to disdain the whole tipping thing, especially since I've gotten some really lousy table service of late.

 

[Midpack]

I would certainly try a table service restaurant that uses the "no tipping please, because we already pay a decent wage" policy.

Name removed from quote because this has been said so many times by others on this thread, and it's largely unfounded. Most of you don't really have any idea what servers make, or how many are making a happily making a "decent wage" already with the tipping status quo. If you do the simple math, you'll see it's pretty hard to work in a restaurant and not make well more than the $7.25/hr minimum wage - do you really think servers would stay working in restaurants if they were only making anything like $7.25/hr?

Based on the media at least, the food service workers who are most angry about their wages are fast food workers who already make the full minimum wage (vs tipped minimum wage) or more, they're pushing for $15/hr. If you are in support of a decent wage for fast food workers, tipping has little or nothing to do with.

I wonder how many members here are protesting on behalf of workers, when the reality is they're just intimidated by the mechanics of tipping, and they aren't even considering how it might impact servers.

If you have some facts, flame away...but the outright conjecture in many posts in this thread is amazing.

Strike Fast Food - Low Pay Is Not OK

 

[utrecht]

I said earlier that tipping should be eliminated and servers should be paid a fair wage. I don't know what a fair wage for a server is but its certainly more than minimum wage.

Why cant a server be just like any other job? Eliminate tipping and give them an hourly wage that is determined by the market place. I have no idea why that concept seems so radical. The majority of jobs work that way. I see no reason why it wouldn't work for servers. Obviously the price of restaurant food would rise and I would have no problem with that.

 

[samclem]

Name removed from quote because this has been said so many times by others on this thread, and it's largely unfounded. Most of you don't really have any idea what servers make, or how many are making a happily making a "decent wage" already with the tipping status quo.

For me, the attraction of going to a "no tipping" restaurant isn't about whether the workers are making enough per hour. Maybe they'll make more at these places, maybe they'll make less. But I think the attraction is putting the onus of compensating employees back on the management, just where it is for 99% of other employees.
My dining experience is influenced by many other things than the waitstaff. The cooks obviously have a huge impact, but also the way the restaurant looks, cleanliness, portions, etc. I've got no idea how a tip gets split and no control over it. A competent manager/owner should take everything into account and put the resources/compensation where it does the most good, and build the costs into the price of the meal--maybe waitstaff is overpaid under the present model (i.e. there are lots of great, qualified people applying for every job), but it's darn hard to get good cooks. If there were no tipping, the total I paid to management could be more effectively used to address any imbalances. As it is now, the food prices have to go up to pay for competent cooks and I get to keep overpaying the waitstaff.
All that said, I don't have a big problem with tipping (except for the tax avoidance angle, which I think I'm addressing effectively by puting things on a charge card). But apparently a lot of people do, and that is a market niche that might be exploited by a savvy owner.

 

[Midpack]

I said earlier that tipping should be eliminated and servers should be paid a fair wage. I don't know what a fair wage for a server is but its certainly more than minimum wage.

Why cant a server be just like any other job? Eliminate tipping and give them an hourly wage that is determined by the market place. I have no idea why that concept seems so radical. The majority of jobs work that way. I see no reason why it wouldn't work for servers. Obviously the price of restaurant food would rise and I would have no problem with that.

Do you know what a server makes today, what is the range for various levels of restaurants (casual to upscale)? And how does that compare to other jobs with equivalent skill sets? Since you invoke the "market place" - if servers weren't satisfied with their compensation (vs other jobs/careers), wouldn't they seek other jobs/careers? There wouldn't be many servers if their wages were completely unfair.

If servers are unhappy, I am sure they will make it known the same way any other worker does, voice, leaving, whatever.

Your making assumptions on their behalf.

So unless you actually know what servers make and what they want, your reason for eliminating tipping can't stem from supporting servers...

I wouldn't be surprised if servers end up with a different pay structure some day, but a lot of the "support" for servers here is otherwise motivated.

 

[ERD50]

Do you know what a server makes today, what is the range for various levels of restaurants (casual to upscale)? And how does that compare to other jobs with equivalent skill sets? Since you invoke the "market place" - if servers weren't satisfied with their compensation (vs other jobs/careers), wouldn't they seek other jobs/careers? There wouldn't be many servers if their wages were completely unfair.

If servers are unhappy, I am sure they will make it known the same way any other worker does, voice, leaving, whatever.

Your making assumptions on their behalf.

So unless you actually know what servers make and what they want, your reason for eliminating tipping can't stem from supporting servers...

I wouldn't be surprised if servers end up with a different pay structure some day, but a lot of the "support" for servers here is otherwise motivated.

I have no idea where this angle of yours is coming from.

People aren't making judgement calls about what a server makes or doesn't make - the point that I think most of us are making is that should be the manager's business - keep us out of it.

Yes, the free market will 'work' with or without tips, the servers are smart enough to look at 'total compensation'. We are just saying, let that compensation come from the people who hire and manage and fire them - not some % directly from the customer. So let's have it 'work' w/o tips.

Again, many service businesses do just fine w/o a tip structure - and their employees are also smart enough to look at 'total compensation'. I'd like to see restaurants work this way also.

-ERD50

 

[utrecht]

Midpack, I ave no idea what an avg server makes, but whatever that is, why cant they be paid that amount based on an hourly wage?

Tell all of us what makes servers any different from any other job? Why do they need tips? Why cant they be paid hourly just like a cashier at Best Buy, or a produce manager at Kroger, or the guys that helps you find a plumbing part at Home Depot?

 

[Midpack]

For me, the attraction of going to a "no tipping" restaurant isn't about whether the workers are making enough per hour. Maybe they'll make more at these places, maybe they'll make less. But I think the attraction is putting the onus of compensating employees back on the management, just where it is for 99% of other employees.
My dining experience is influenced by many other things than the waitstaff. The cooks obviously have a huge impact, but also the way the restaurant looks, cleanliness, portions, etc. I've got no idea how a tip gets split and no control over it. A competent manager/owner should take everything into account and put the resources/compensation where it does the most good, and build the costs into the price of the meal--maybe waitstaff is overpaid under the present model (i.e. there are lots of great, qualified people applying for every job), but it's darn hard to get good cooks. If there were no tipping, the total I paid to management could be more effectively used to address any imbalances. As it is now, the food prices have to go up to pay for competent cooks and I get to keep overpaying the waitstaff.
All that said, I don't have a big problem with tipping (except for the tax avoidance angle, which I think I'm addressing effectively by puting things on a charge card). But apparently a lot of people do, and that is a market niche that might be exploited by a savvy owner.

I have no problem whatsoever with your POV.

It's all the folks who claim

• 'pay servers a living wage',
• 'servers should get minimum wage (vs tipped minimum wage)' or
• 'eliminate tipping'

WITHOUT

• knowing anything whatsoever about what servers currently make when all is said and done, and not bothering to do the math to see how easy it is to make well over the full minimum wage,
• what tipped servers think about the tipping status quo or
• thinking thru what increase wages, eliminating tipping and various combinations thereof might do to servers wages. Assuming they will be better off - on what basis?

Again, the only food service workers I've seen vocally pushing for higher wages are fast food workers - who don't get tips in the first place! I don't see an outcry from tipped servers, aside from tip pooling that is probably being abused in some places.

And restaurant management certainly plays a role in handling servers, assuming they aren't because of customer tipping is a convenient sweeping generalization and mostly nonsense.

Again, a lot of the protesting here is thinly disguised as concern for servers, when it's not...

 

[Chuckanut]

IMHO, people in traditional server jobs (like a restaurant server) ought to be upset that tipping is being spread to many other positions. It's giving tipping a bad feeling for many people.

I find myself really resenting the tip jars setup all over the place, when the people are doing very little but filling an order at a counter. Often I even have to get my own drink and refill my own coffee. That is not service.

The hotel chain that is putting tip envelopes in rooms, is, IMHO, simple admitting that they are not paying their worker a descent wage and they want their customers to take on that responsibility. That is outrageous!

 

[ERD50]

...
Should tipping be eliminated? As long as there are other restaurants that allow tipping, it would be hard for a business to retained quality employees because the higher income they need to provide would result in higher food prices that customers may not be willing to pay.

I think you left a term out of your equation.

-ERD50

 

[Midpack]

I have no idea where this angle of yours is coming from.

I worked as a server long ago, and we eat out twice a week, have friends who own restaurants, and we know a little about the industry - though I am not claiming to be an expert/insider.

People aren't making judgement calls about what a server makes or doesn't make - the point that I think most of us are making is that should be the manager's business - keep us out of it.

Some, NOT ALL, most certainly are!

Yes, the free market will 'work' with or without tips, the servers are smart enough to look at 'total compensation'. We are just saying, let that compensation come from the people who hire and manage and fire them - not some % directly from the customer. So let's have it 'work' w/o tips.

Compensation for servers and everyone else will come from customers no matter what...what other revenue source is there in the end?

Again, many service businesses do just fine w/o a tip structure - and their employees are also smart enough to look at 'total compensation'. I'd like to see restaurants work this way also.

What if non fast food servers like the status quo, and the transition to 'eliminate tipping' reduces server total compensation? Many here are just assuming servers are underpaid or unhappy with the current structure, without any apparent basis...

That said, there are many valid, thoughtful POV's here - very different than mine. Unfortunately there are also quite a few blissfully ignorant or falsely motivated POV's too, those are the ones I am attempting to call out. But I am beyond tired of this thread, I've already over participated...

 

[Independent]

Name removed from quote because this has been said so many times by others on this thread, and it's largely unfounded. Most of you don't really have any idea what servers make, or how many are making a happily making a "decent wage" already with the tipping status quo.

I'm the person who said that.

I don't think we communicated well. I wasn't saying that servers are currently "underpaid". Or that my interest in a no tipping policy is driven by some belief that servers would average more without tipping.

I was saying that if an owner wanted to try a "no tipping please" policy, that owner would have to increase wages above the current level.
(new wages) = (old wages) + (old tips).

If that owner wants to get customers, and recognizes that people look at menu prices and have some sense of "fair wage", he/she will almost certainly have to address that issue directly with some sort of signal to the customers. Somehow, that message is:
'No tipping' doesn't mean your server is starving. It means that some of that extra price on your menu is going to your server."

Maybe I used too few words to get that across.

 

[Sunset]

There may be communication problem here.

The federal minimum wage is $7.25/hour. Employers can pay their tipped workers $2.13 only if those employees actually earn enough in tips to get up to the $7.25. If tips don't fill the gap, the employer pays the difference.

You are correct, I didn't know that.

 

[rockymountainhigh]

We don't eat out much because we can make everything at home. Even with a coupon it is not worth it. When we do go out I have decided to tip only 10% where I used to tip 20%. While visiting my dad in California we always ate at his favorite place, Home Town Buffet. He paid for it but it made me ill thinking how much it cost compared to how much he ate even with his senior discount - he is 93. Drinks use to be included... and with my allergies there was a lot I could not eat.

 

[FUEGO]

I doubt the waitstaff at Denny's or IHOP make a ton, but my 18 year old nephew with zero waiting experience recently started waiting tables at a swanky downtown place that serves the $15 burgers. Pretty easy to clear $200-300 in a night (as in 6 pm to 2 am). That's $25 to 33 per hour partially tax free (or you can believe that all of those cash tips ended up being reported...). For an 18 year old with barely a high school education.

Not bad work if you can get it, and you don't even have to take your clothes off.

And sign me up for the no tipping sit down restaurant. I'd almost pay extra to not have an intrusive waiter interrupting my meal to ask if it was okay every 4 minutes. I tend to go for the "one step up from McD's" places that don't require a tip when meeting folks for lunch and part of that is so I don't have to deal with a waiter. If the waiter isn't getting tipped, I figure they'll focus more on efficiency and less on sycophancy.

 

[Big_Hitter]

And sign me up for the no tipping sit down restaurant. I'd almost pay extra to not have an intrusive waiter interrupting my meal to ask if it was okay every 4 minutes.

that's how my golf club operates - tips are pre-loaded

 

[sengsational]

Maybe US restaurants should go the way of the cruise lines.

Years ago, the last night of the cruise, you'd have a bunch of hovering cabin stewards and dining room staff waiting for the envelope with cash. The amount of cash was up to the cruiser, but "recommended" at X bucks a day for room steward, and Y bucks a day for dining room waiter. I have no doubt that that arrangement yielded great customer service. The bad news was that they all were REAL crabby the next morning, even if they got a good tip, hehe!

Then it all changed. The cruise lines just put the tips on your bill (aka on-board account). Yeah, if you want to stand in line for an hour, you can go down and get it reduced or even removed, but who's going to do that? The service went down precipitously when these "auto-tips" started. The cruise line took away the "carrot" only left the passenger one "stick", which was the cruise-end survey. So now all the staff simply wish to stay under the radar; don't do anything "bad", especially when your nametag will be visible. The best technique I have found is to repeat their name like 20 times, clark howard style, especially if you think they're lying to you (the don't want to upset you if you can write their name on the EOC survey).

That doesn't map too well to the US restaurant tipping problem, but the idea was, what would happen if every "tip" became like the auto-tip for parties of 6 or more? You could go up and bi...er...complain and get it reduced, but who's going to do that unless service was horrific.

 

[FUEGO]

I almost mentioned the cruise lines as a model for getting rid of tipping. We have had excellent service on the cruise lines. I think they get rewarded big time for getting 9's or 10's on the cruise end survey, as our totally incredibly awesome server made sure to remind us to fill out the survey as that's how they get rewarded. Maybe it leads to promotion or better future contracts.

All I know is that the maitre'd and the hotel manager were seen in the dining room frequently and I imagine a head waiter that sucked would have "additional training" to bring their service up to the cruise line's standard PDQ. Similarly, the head waiter closely monitored the service of the two or three assistant waiters underneath them. In other words, management is present and actively monitors service levels all the way down the heirarchy. Managers manage, and the diners sit back and enjoy impeccable service. How it should be theoretically.

 

[sengsational]

In other words, management is present and actively monitors service levels all the way down the heirarchy. Managers manage, and the diners sit back and enjoy impeccable service. How it should be theoretically.

You make an excellent point. The auto-tip does get the passengers out of the business of evaluation. And the cruise staff still do concentrate on service and let the passengers concentrate on just enjoying themselves. That's worth a bit, especially if you are trying to obey Pricess' command to "escape completely". If one of the staff stands out (at either end of the spectrum), those go on the eval, otherwise, we're chill!

 

[tulak]

Ivar's in Seattle is getting rid of tipping as part of the minimum-wage increase to $15.

Now an iconic Seattle restaurant is trying its own experiment, raising the pay of its lowest workers directly to $15 an hour, getting rid of tips, and raising the prices on its menu.

Here’s how the new pricing and wage system at the Salmon House and Acres of Clams restaurants is going to work:

Servers and bartenders at the Salmon House in 2014 made the state minimum wage of $9.32 an hour, along with $18 to $19 an hour in tips, on average, Donegan said, adding that the restaurant’s typical server or bartender made about $60,000 a year last year.

On average, customers paid a 17 percent tip for each bill last year.

Under the new system, the price for each menu item at the Salmon House will go up 21 percent. That 21 percent represents a combination of 17 percent to make up for the tips that customers will no longer be giving, and 4 percent to cover raising the minimum wage to $15 as well as increased food and operating costs.

The 21 percent price hike will be shared among restaurant hourly staff, with 8 percent going to servers and bartenders, and 13 percent to be divided among bussers, hostesses, dishwashers and others, Donegan said.

Ivar’s to raise restaurant workers’ wages to $15 right away | The Seattle Times

Looks like we're now tipping 21%! It'll be interesting to see how it works out.

 

[utrecht]

$60K for a waiter? Seriously?

 

[haha]

Ivar's in Seattle is getting rid of tipping as part of the minimum-wage increase to $15.



Ivar’s to raise restaurant workers’ wages to $15 right away | The Seattle Times

Looks like we're now tipping 21%! It'll be interesting to see how it works out.

One of the many gifts of living in a socialist paradise. Mayor Murray's next project is being sure we all pay up so that everyone can continue to live in Seattle, instead of being gentrified to the outskirts. I think of it as his preserving street crime initiative.

I wish Giuliani would come out and show us how to do it properly

 

[haha]

$60K for a waiter? Seriously?

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

 

[Running_Man]

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.

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, and the tipping process is an incentive to do so. The best restaurants know how to select the best servers. To think anyone can be trained to be a good server means if you ran a restaurant you'd probably end up in the 44 percent category. Good servers are a tremendous source of information for management of a restaurant as well, their input from the front lines helps guide the changes and issues a restaurant needs to react to in order to succeed.

The guest arriving knows pretty much how much they are going to tip - usually somewhere between 15-20 percent and can with a rudimentary knowledge of mathematics know the impact on the cost of their meal and determine where they want to eat based on total costs of meals. Tipping allows the restaurant guest to exert control over the meal when it or the service is not up to par, especially if you are a regular guest of the restaurant and the owner of the restaurant to equalize compensation costs with the level of business for the restaurant.

As for complaining about the amount of money a server makes for 15 dollar hamburgers? If a server is making 200-300 a night for a six hour shift that means he or she is delivering 100 hamburgers per night in a sit down fashion or on average one every 3-4 minutes for 6 hours to customers, assuming a $10.00 margin on the hamburger that is $1,000 in variable margin for the owner to work with. That takes a real commitment to continue to hustle to make that wage "overpayment".

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 you might now serve 80 hamburgers per shift and now the restaurant loses $200 in margin. The burger is going to need to be priced accordingly so to capitalize the servers wages, lets say $90 or $15 is "fair" pay and to account for lost margin the $15.00 hamburger becomes $17.25, $1.25 for server wages and $1.00 for the more relaxed pace of service in essence 15% more.

However those better servers will go to other $15 burger joints that pay tips and the process becomes a slide in quality that is often seen in poorer restaurants. This is the reason Yelp is successful, people tend to avoid poor quality in restaurants.

So in the end tipping reduces costs for the restaurant owner and matches revenues more closely with the relative level of business so moving to a model of no tipping to appeal to the crowd that is typically a cheaper customer and more likely to eat at Panera and Shake Shack is less likely to become a regular in a more expensive venue is in short a non starter.