Tipping: What's your policy?

[andyzee]

My wife cuts my hair.

My wife cuts my hair as well. I try to give her a tip as often as possible. But not only doesn't she always want it. Sometimes I have to chase here around to give it to her! But it's all good

 

[riverc0il]

Someone please explain to me, why is a gratuity system in place?

I didn't hit much on this but it is a crappy system, IMO. Tipping is supposed to reward good service. But what the system has become is 15% is expected minimum. Most people do 20% because the system makes us feel responsible for paying the way of the worker because we know their hourly wage sucks and it is such a hard job. Instead of actually paying for performance, we establish a standard and going only slightly higher or lower for great or poor service. This is unfair to those providing great service and makes it so even bad servers can make good money.

A few years back on NPR they did an informal study and found that the best tips were given to servers who were not overly helpful and friendly but rather servers that got everything done required of them but were firm and almost a little stressed due to things being busy or something like that. It basically suggested there was no reason for servers to give 110% as the financial rewards didn't follow.

But who would take a serving job for minimum wage without tips? Serving jobs get snapped up because people want quick and good money. Even only averaging 10% tips, three tables an hour, at $50 average meal, that is $15/hour plus minimum tip wage. That is pretty damn good money. Of course there are a lot of server jobs with less per plate average, slow times, whatev...

The system works great for the food establishments because they pay very little per wage hour and the customer basically picks up the employees wage. That also means food prices are less than they might be if establishments had to pay minimum non-tip wage... and who is going to work that type of job for $7.25 an hour? So I guess it works.

 

[andyzee]

I didn't hit much on this but it is a crappy system, IMO. Tipping is supposed to reward good service. But what the system has become is 15% is expected minimum. Most people do 20% because the system makes us feel responsible for paying the way of the worker because we know their hourly wage sucks and it is such a hard job. Instead of actually paying for performance, we establish a standard and going only slightly higher or lower for great or poor service. This is unfair to those providing great service and makes it so even bad servers can make good money.

I couldn't have said better, thank you!

 

[deadheadskier]

37%

On a $15 cut I'll do $2-3. I generally don't get many above par cuts or service. It is all pretty much standard.

It's a service I appreciate, even if I only get my hair cut once every two months and it's nothing special.

My understanding is hairdressers in the area only make about 20K a year at your typical Supercuts or whatever. I think the occupation is deserving of more than that. Not a lot more, but some. So, leaving an extra $2-3 from what is normal (small alpinezone sample size here) isn't really all that much money to me, we're talking $12-$15 dollars a year. They treat me well, the little bit extra is always appreciated and if it helps make their day when they might've gotten stiffed earlier in the day, I'm happy to do it.

Tip whoever cuts my hair right before the holidays $20 as well as who can't use a bit of extra cash around that time of year. Leave a ten spot in my mail box during Xmas week for my mail man too.

 

[marcski]

My haircut costs ... I think $14 or 15 they raised it within the last few months..I give him a 20.



Here's one: What do you do when you order take out from a regular restaurant like a bar or pub? Tip or no tip? Is that different from "normal" take out like a local pizza or Chinese joint?

 

[riverc0il]

Take out never gets a tip. There is no service. You don't get a tip if the only service you provide is hand me a bag and swipe my card. I only am paying for the product.

 

[deadheadskier]

Someone please explain to me, why is a gratuity system in place?

The same reason Salesmen make commission. If you leave it up to the individual to work harder and make more money for both the company (up selling) and themselves (great service), the customer is treated better.

It's a win win win. The customer wins. The company offering product wins. The employee wins.

 

[andyzee]

The same reason Salesmen make commission. If you leave it up to the individual to work harder and make more money for both the company (up selling) and themselves (great service), the customer is treated better.

It's a win win win. The customer wins. The company offering product wins. The employee wins.

Sorry, flawed reasoning. It is not the customer determining, and paying, commission amount, instead it is the company. Commission is based on units sold, not quality of service Using this reasoning, the restaurant should be paying the server the tip for each table he/she serves and customer would leave no tip. I would be all for that system.

 

[riverc0il]

I agree with andyzee. If tipping ensured customers got better service, how come we so infrequently feel like we receive great service? Tipping is simply an accepted system, it is a standard. It is an obligation from the customers perspective. Look back at this thread and see how many people said they tip either 15% or 20% always, maybe rounding up or down slightly for better than average service. Great service may or may not be recognized with great tips, it frequently is not. I suspect quality of service is more driven by management and an individual's work either and level of ownership rather than tipping driving performance.

The difference between commission for a sales person and tipping for a server is the commission is directly and completely tied to performance. Whereas tips are tied to societal standards and what customers identify is appropriate for average service, give or take a buck or two.

 

[snoseek]

Eliminate tipping and the price of a decent plate would go up drastically, it's a psychological thing. There also is less incentive for quality service. I've seen this with certain caterers that pay a flat wage and pocket the 18 percent gratuity, complete bullshit imo. Servers are driven by money alot of the time which is perfectly ok with me.

Would you all be ok with a 40 dollar sirloin at a casual restaurant?

 

[andyzee]

Eliminate tipping and the price of a decent plate would go up drastically, it's a psychological thing. There also is less incentive for quality service. I've seen this with certain caterers that pay a flat wage and pocket the 18 percent gratuity, complete bullshit imo. Servers are driven by money alot of the time which is perfectly ok with me.

Would you all be ok with a 40 dollar sirloin at a casual restaurant?

Have you heard of a thing called competition, that would should help price down, quality up, if not, business drops. I have no problem with the concept of tipping and the whole system, but as riverc0il stated, the system has become flawed. It is most definitely advantageous to the restaurants.

 

[riverc0il]

Eliminate tipping and the price of a decent plate would go up drastically, it's a psychological thing. There also is less incentive for quality service. I've seen this with certain caterers that pay a flat wage and pocket the 18 percent gratuity, complete bullshit imo. Servers are driven by money alot of the time which is perfectly ok with me.

Would you all be ok with a 40 dollar sirloin at a casual restaurant?

That question is a bit disingenuous. If I am tipping 20% on a $17 sirloin with a $3 beverage, the tip would be $4 for a total of $24. Two people with the same mean is $40 meal for $48 tip for an $8 difference. Theoretically, if the establishment had to pay the wagers of servers instead of relying on tips, prices would only go up equivalent to the tips. Actually, they would probably go up less because of the way wages and businesses work, skim a little fluff off the top. To suggest that by paying a wage instead of tips that a $17 sirloin would more than double is crazy.

 

[snoseek]

Have you heard of a thing called competition, that would should help price down, quality up, if not, business drops. I have no problem with the concept of tipping and the whole system, but as riverc0il stated, the system has become flawed. It is most definitely advantageous to the restaurants.

Aside from chains which I know nothing about there isn't a whole hell of a lot of play in pricing. Markup is less than you would expect. It is extremely tight already. You can't roll the cost of a server into the restaurants labor budget and expect not to see drastic price increases. Trust me, you can plan on much higher menu prices and overall less incentive to be a server. There are a few that are really good at it, make great money and actually enjoy it. They do it because they want to, not because they have to. This is what I have always looked for in cooks and pay a premium for it. Those are your exceptional servers/bartenders and you better beleive they would be long gone.

 

[snoseek]

That question is a bit disingenuous. If I am tipping 20% on a $17 sirloin with a $3 beverage, the tip would be $4 for a total of $24. Two people with the same mean is $40 meal for $48 tip for an $8 difference. Theoretically, if the establishment had to pay the wagers of servers instead of relying on tips, prices would only go up equivalent to the tips. Actually, they would probably go up less because of the way wages and businesses work, skim a little fluff off the top. To suggest that by paying a wage instead of tips that a $17 sirloin would more than double is crazy.

Ok maybe not that drastic. I was thniking a 30 dollar sirloin going to 40. My bad.

The employer would now be stuck with increased payroll taxes (you don't really thnik servers claim all that they make do you?) and increased pressure for benefits. All of my FT kitchen staff has good benefits, health, 401 ect...... the servers are more freelence/hustling $$$$. Put them on an hourly wage and they will want equal treatment.

The good servers make quite a bit. It would take a pretty hefty hourly wage to keep them around.....

 

[Geoff]

So Mr Pink has the ideal strategy. Let all the other suckers tip to subsidize the wait staff and don't tip at all.

 

[andyzee]

Aside from chains which I know nothing about there isn't a whole hell of a lot of play in pricing. Markup is less than you would expect. It is extremely tight already. You can't roll the cost of a server into the restaurants labor budget and expect not to see drastic price increases. Trust me, you can plan on much higher menu prices and overall less incentive to be a server. There are a few that are really good at it, make great money and actually enjoy it. They do it because they want to, not because they have to. This is what I have always looked for in cooks and pay a premium for it. Those are your exceptional servers/bartenders and you better beleive they would be long gone.

Good logic, but let's look at it from a different angle. Let''s say you have a $30 steak, you leave a 20% tip, the price is now $36. If we do away with the tipping system, pay the $36 for the steak up front you say there is no reason for the server to provide better service. OK, server is making decent money, so he's got a reason to want to keep his/her job, if he doesn't provide good service, he drives customers away. As a result, good servers will now be more important to the restaurant. Going by what most folks say in this thread, bad character to leave anything less than 15%-20%, what incentive do servers have to provide good service?

Another thing, you say mark up isn't so great, I agree, on entrées. But what about drinks and desserts?

 

[snoseek]

Another thing, you say mark up isn't so great, I agree, on entrées. But what about drinks and desserts?

yeah markup on drinks is generally much more. It has to be to make up for the fact that often the food operates at a loss or provides very little towards the bottom line. some places make it on the food, some don't. If it is a food focused place then they better.

Desserts-well if they are actually made in house then yes there is a relatively good markup. Othere than that the overall cost of good can be as high as 50 percent for premade stuff(the norm these day it seems). If you ran those numbers overall there would be certain failure for most assuming there is a mortgage/lease involved. Desserts is all about drawer contribution, money that you wouldn't have anyway/cash flow. I make all my stuff in-house only for the fact that it helps keep the COG below 38 percent-my magic number.

I still have to ponder the other part of what you said. Maybe some of that gap between 36 and 40 dollars would be filled with increased payroll taxes/benefits. I think there would be less efficiency due to the lack of motivation? not sure....

I'm pretty sure that being able to "keep your job" would not really be motivation enough for front of the house to provide exceptional service. Even with unemployment the way it's been the last few years, I have not seen a flood of talent rushing back into the industry. Many people are just not willing to do this or simply can't. I worked over 90 hours last week on a salary, I'm on day 26 and will not have another day off till july 4. I'm in the back so my motivation is a whole different animal but really how many are willing to work like that?

A good server/bartender IS key. Driving people away they Will eventually lose their job. A good server in the right place makes easily a couple hundred (or often more) a shift. Ten bucks an hour isn't going to cut it. This part of the formula doesn't change IMO.

 

[riverc0il]

The gap to fill the payroll taxes would come from an average drop in wages relative to tips. I can't imagine a manager would be ready to pay a server $40 an hour because that is the equivalent they get in tips. The wage offering would be depressed and because the pay is so high there would be competition for the jobs. Servers would get paid less total but it would seem more because it would be such a high hourly rate. The difference then goes to payroll tax or the price of the food goes up again slightly.

The problems with this method is two fold.... even if the total cost is the same, sticker shock could set in for customers.... especially those that don't tip well.

The other factor is servers who work busy times get paid accordingly. Those working during slow times get paid accordingly. How would a manager work that out for an hourly wage instead of tips? Legally you can't change someone's wage based on which shift they are working on any given day. You could pay day shift staff less than night shift staff if it was different staff. What about mid-week vs weekend? This is where tip system works. You move more tables, you get more money. And you gotta work your way up to get those good hours at places with expensive meals.

 

[deadheadskier]

Sorry, flawed reasoning. It is not the customer determining, and paying, commission amount, instead it is the company. Commission is based on units sold, not quality of service Using this reasoning, the restaurant should be paying the server the tip for each table he/she serves and customer would leave no tip. I would be all for that system.

You're absolutely right Andy. As soon as I hit 'Submit Reply' I realized that there is a fundamental difference between Salesman (company paid) and Restaurant (consumer paid) service.

Very good point.

but there is part of my salesman comparison that does work and highlights a great positive of gratuity pay. I'll explain in the morning.

 

[snoseek]

The gap to fill the payroll taxes would come from an average drop in wages relative to tips. I can't imagine a manager would be ready to pay a server $40 an hour because that is the equivalent they get in tips. The wage offering would be depressed and because the pay is so high there would be competition for the jobs. Servers would get paid less total but it would seem more because it would be such a high hourly rate. The difference then goes to payroll tax or the price of the food goes up again slightly.

QUOTE]

So the big question is where is the actual talent going to come from. The pay now for someone thats good is already there. Your basically saying by paying less more people will apply and wages will go down? sure there's something to be said for consistency but career people will leave-simple as that. These are the people that provide good service. The turnover is stupid high as it is.....

Fact of the matter is most people aren't willing to do this kind of work over the long term. It can suck. I've tried it and personally realize that as a chef I need to be driven by something else altogether. It is hard work, physically and emotionally.

edit-I should also note that a server pulling 40 bucks an hour is having a great night. If it truly were that all the time good then yes more people would be doing it and overall quality of service would be better.

I don't see America ever getting away from tipping in service related jobs. I'm not a fan of the system either......