The Death of Tipping In America


Perhaps nothing in the world of restaurants is more contentious (besides “celebrity” chefs and “farm-to-table”) than the topic of tipping, the practice of which is ingrained in our American culture.  We love to reward those who give great service, but do we tip the amazing barista at Starbucks who always remembers our order with the same fervor as we do the fabulous server at our fave local restaurant?  Do we like the built-in 18% gratuity on large parties, or do we think that its a devil’s bargain; the service will suck because the tip is built in?  And where does that 18% figure come from…didn’t it used to be 15%?  Wait, isn’t it 20% now?  What is socially acceptable?

Are we getting to the point where tipping, as a dining practice/social construct, is slowly but steadily becoming a thing of the past?  We are starting to see glimpses of this across the country:

In Pittsburgh, a restaurant called Bar Marco is eliminating tips and the owners are giving their full-time employees a salary, health care benefits and shares in the company.  The owners are NOT adding a service fee or raising their prices, instead hoping to raise revenue by growing their business with private parties and menu expansion.

In New York, Sushi Yashuda has eliminated tipping, believing that diners are “simply tired of the meal-ending ritual of grading a server”.  The owner feels that having to “do math” at the end of the meal takes away from the experience.  Not to mention, the provenance of his restaurant lies in Japanese customs, one of those being that service staff are compensated by their salary alone.

Closer to home, the Linkery restaurant in San Diego (now closed) eliminated tips years ago by tacking on a service charge to the guest’s checks, which was then distributed to both service staff AND kitchen staff alike.

Many fine-dining destinations such as The French Laundry and Chez Panisse have made this type of service fee a staple on their checks for years, preferring to make it not only easier on their guests, but more structured for their staff as well. The groundbreaking Alinea in Chicago has taken it a step further.  The owners, Chef Grant Achatz and his biz partner Nick Kokonos developed a ticketing system for their 3 locations (Alinea, Next and The Aviary) where diners PRE-purchase tickets to dine there.  These tickets are non-refundable, so if the guests are a no-show the restaurant (which has already prepped the food for these guests and may end up throwing some away at the end of the night) doesn’t lose money.  Nor do the restaurant’s staff, who are paid salary so are guaranteed to be compensated.

Tipping is many things: the first word that comes to mind is arbitrary.  The overwhelming majority of diners tip not on the quality of the service, but as a percentage of the total amount of the check. You don’t tip someone the same actual dollar amount at Denny’s or IHOP as you do at The Capital Grille or Houston’s do you?  Nope. The amount of the bill has dictated what you will tip, most of the time subconsciously.  The service may the same or better at that breakfast place or roadside joint, but if the prices there are less than that chain in the ‘burbs or that new fine dining spot in the city that won’t matter.  That server pushing the higher-end steaks, chops or catch-of-the-day is not trying to fatten YOU up…he’s trying to fatten up the amount of the CHECK, knowing that the vast majority of diners tip on a percentage basis.

Tips are not guaranteed.  Time and again, no matter what concept I worked for, I would get a server coming to me, distraught, because the table that they ran their ass off for, bringing multiple sides of ranch and refills, ketchup and cutlery, decided that they had just enough for the bill and nothing more. Maybe the service was poor in their eyes. Maybe they are punishing the server for the kitchen overcooking the burgers.  There’s a bunch of reasons that this might happen; suffice it to say that tipping is not a guarantee but a suggestion for some people, despite its prevalence in America’s dining culture. Perhaps some people “dine above their class” when it comes to tipping, shell-shocked by the prices when the final bill arrives.

So try telling that to a server in one of the tip credit states, places where restaurants can legally pay their servers an amount LESS than the federal minimum wage, as long as the combination of what they make in tips for the shift + what they make in hourly pay equals the federal minimum wage.  The only saving grace to this is that businesses must make up the difference if a server reports less tips than what would make up the pay.

At $3.02 per hour, a server in a tip-credit state performs the same duties (sidework, cleaning duties, etc) as a server in a non-tip credit state while making on average 60% less money per hour in straight pay. The menu prices in locations that are tip-credit usually not 60% less: a burger in California doesn’t cost the consumer $11.20 when it costs them $7 in Texas. So how do restaurants get away with this?  Because the law says they can.

Tipping allows owners to keep wages artificially low.  The customer is the one paying the lion’s share of that server’s wages. Rare is the business owner who will buck the system and pay their service staff anything beyond what minimum wage calls for, tip-credit or no tip-credit.  So they get the human resource benefit without paying for its actual value. 

Tipping is also a burden put on customers, who feel that societal custom dictates…no, demands that they leave something at the end of the meal for the server.  We KNOW that every server is a single mom or struggling college student and we MUST bolster their meager pay with a fat tip right??  Seriously, though, can you imagine NOT tipping at the end of the meal? Tipping is no longer something that we may do…rather something we MUST do in the eyes of society.

Being a restaurant lifer, I witness and understand both sides of the debate.  While eliminating the practice of tipping (and paying the service staff either a higher hourly wage or a salary) sounds progressive, there is no way for larger chain restaurants to absorb the increased costs without increasing menu prices…the casual full-service niche is too saturated and too competitive.  The smaller, chef-driven, “fine-dining” restaurants can do it, because they usually charge higher prices anyway for their experience, usually to cover the cost of better ingredients.

Also, will the guest’s experience suffer when that server is compensated, not by the promise of a gratuity, but by a guaranteed salary?  Tales abound of long-suffering diners who, at the hands of refined European waitstaff, put up with indifferent service and non-smiling waiters, most of whom are paid a living, non-tipped wage.  Could that happen here??

Regardless of which side you fall restaurants, for many non-college and college-educated folks alike, present an opportunity to make good money, both as service staff and as owners. Servers and bartenders are putting themselves through college, raising families and paying taxes.  Tipping also represents a way for business owners to share labor costs with their guests as a “user fee”.  Great service only enhances the ability for service staff to make even more money, as diners make the individual decision to reward that person.  It represents the pinnacle of a performance-based system:  show up, kick ass, bring your personality and energy, attend to the customer’s needs and gain the payoff at the end.

Regardless of what side you’re on, the conversation is on regarding the practice of tipping in America.


Restaurant Term of the Day

“The Grey Snail”

Also known as:  Free Shot, Mat Martini

This is the name for a shot consisting of the liquid buffet (beer foam, wine spill, liquor over-pour) that splashes onto the rubber bar mats during a bartender’s shift.  To “create” The Grey Snail, the bartender simply tilts the mat, emptying its fetid contents into the glass. This not-so-delicious gem is usually reserved for bitchy guests, as a way to punk a fellow teammate or for non-discriminating palates looking for free booze.

Let’s use it in a sentence!

“I can’t wait to see Ryan when he comes in.  He left me with the tab after work last night so he gets The Grey Snail in his water bottle later…”

grey snail shot

Dear Customer 12/19/14

You’re the douchebag guest who obviously came to the restaurant looking for two things: a great meal, and to get schooled on how to properly reward your service professionals.

After finishing your meal, you attempted to impress the underwear off of your female server with one of your business cards claiming you were senior vice-president of whatever and that she should “call him”.  You spoke so loudly about how awesome you were that her whole section could hear you. Hey, congrats! You’ve had some success in this life and you feel it doesn’t hurt your chances with the ladies.  Cool.

Trouble is, after all of your braggadocio, you decided that the combo platter of your business card AND a 4% tip on a $125 check qualified as enough to thank her for her service.  Sure, you mentioned at the start of the meal that you were on a budget.  I guess the steaks and martinis you ordered were within your budget, but an acceptable gratuity was not.  I’m sure you can figure out what 4% on $125 is, because you’re really smart.

Five dollars.

So let’s add up the hour and a half she spent taking care of your table:

$5 tip + ( $9/hour minimum wage in CA x 1.5 hours ) = $18.50.

Now subtract out what she will tip out to the bar staff (1% of sales), the busboys (1.5%) and the food runners (1%) = 3.5%. 3.5% x $125 meal check = $4.40.

Subtract that amount from the $18.50 and you get $14.10.  But wait! Income taxes for her will take out 15% of that ($2.10) so this leaves $12.00.  Twelve dollars.

(Good thing she doesn’t live in a tip credit state like Texas where servers get paid $2.15 per hour. Using my calculations above:  

$5 tip + ( $2.15 tip credit minimum wage in TX x 1.5 hours ) = $8.23.  

Tip out of 3.5% to the bar, bussers and food runners, based on $125 check still amounts to $4.40.  $8.23 – $4.40 = $3.83.

Take out 15% taxes and you’re left with $3.26.  For an hour and a half of hard work.  Ouch.)

THEN, in pure creeper fashion, you went home and found your server (who has a very uncommon first name) on a social media site and proceeded to ask her out!

Points for boldness: 100

Points for jackassery: -1000

I’m not sure how it works in your circle; perhaps the “party favors” you date on a regular basis appreciate your fumbling attempts at trying to be The Man.  But your server is a college-educated woman working two jobs ( one of them a non-restaurant, white-collar position ) to pay off school loans.  She is literate, funny and sophisticated.  She won’t be doing this forever, but she needs her server job to make her life work right now.  Most importantly, however, she has no time for someone playing at being a baller but can’t back it up.

I hope you enjoyed her scathing reply back to you on that site, to which you backpedaled saying that “you thought you left more” and that you would come back to the restaurant and make it up to her. No dude, she doesn’t want to see you after you stalked her online. She doesn’t want your charity. What she wants is for you to understand how you made her feel after she took amazing care of you.  She’s not for sale, and to us, she’s worth more than you are.

Coming soon to This Restaurant Life:  The Death of Tipping in America