The Death of Tipping In America

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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.

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