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3 reasons why we should never ban tipping

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  • 3 reasons why we should never ban tipping

    3 reasons why we should never ban tipping
    By Rick Newman
    March 24, 2014 1:33 PM
    The Exchange


    The gratuity gets no respect.

    Tipping is a staple of the hospitality industry and other parts of the economy, generating $40 billion in annual income for people who can really use the money. Yet tipping has become tedious. Passe. Abusive, even. With pressure mounting to raise the minimum wage and improve the plight of low-income workers, some crusaders want to ban tipping and raise prices so that people who depend on tips can earn more predictable incomes instead.

    Kevin Reddy, CEO of fast-casual chain Noodles & Co., explained recently that his restaurants don’t allow tipping because “we don't really feel that folks should have to pay something additional. We don't want our guests to feel we're trying to upsell them."

    Some local outlets have banned tipping in favor of other arrangements. Restaurateur Jay Porter ran the San Diego bistro Linkery for six years with no tipping allowed, substituting an 18% service charge on every check, with proceeds split among the entire restaurant staff. A new Washington, D.C. brewpub, The Public Option, will pay everybody at least $15 per hour while banning tips.

    Food writer Elizabeth Gunnison Dunn wrote recently in the Guardian that tipping is "irrational from an economic perspective" because it's an optional payment everybody is expected to make.

    That may be somewhat true, from the narrow perspective of the diner; but tips also allow the customer to pay wait staff directly without the added cost of tip-less labor pushing up food and drink prices. From the perspective of the establishment and the workers themselves, that's a good thing. Here are three reasons we should never ban tipping:

    It creates an incentive to be entrepreneurial. Anybody who’s ever worked as a waiter or bartender knows you can boost your income at least two ways: by earning bigger tips (whatever it takes to do that), and by turning over your customers faster through speedy service, which means you’ll get more customers and therefore more tips. Sure, there are flaws in this system. Tip-starved waiters, for instance, might rush customers and degrade their dining experience (which, incidentally, would degrade their tips, too). And on busy days some waiters could take more tables than they’re able to handle, impacting service for everybody.

    But offering hourly pay in lieu of tips takes the hustle out of the job, since you’ll get paid the same whether you serve one customer or 50, and whether your service is great or terrible. There’s nothing wrong with punching a clock, but it does replace the incentive to maximize your income with the mere duty to show up and make it through your shift. Any work that generates an entrepreneurial vibe is important in our economy, especially since it can instill a hunger for making money that many people will never learn in school or at home.

    Tips can add up to pretty good pay. When I worked as a waiter during college and after, I could easily earn 4 or 5 times the minimum wage on an hourly basis. Based on today’s minimum wage of $7.25, that would equate to $30 an hour or so on a routine lunch or dinner shift at the casual restaurants where I took orders. Suddenly $15 an hour doesn’t seem so enticing. Plus, people earning cash income have enviable flexibility in terms of the earnings they report to the IRS, although none of them, I'm sure, would do anything illegal. When I was a young adult, I worked at restaurants rather than other jobs with hourly pay because that’s where the money was. Why mess with that?

    Tipping gives customers more control. Anti-tippers complain about the social pressure tipping causes, as if some poor waitress's college education and entire future rides on whether a few customers here or there leave her 25% rather than 15%. It doesn't. And my bet is the same hard-to-please anti-tippers would kvetch about the shoddy service they'd get if minimum-wage staffers replaced tip-hungry servers. Jay Porter, the California restaurateur, generated a lot of feedback when he wrote in favor of tipless restaurants last year, claiming, among other things, that “the quality of our service improved” after tipping went away. A local critic disagreed, pointing out that Porter’s restaurant failed and closed in 2013, partly because of “quirky, poorly trained service staff [who] waited tables in an off-the-cuff style that appealed to few patrons.”

    Think about it: If a waiter’s pay isn’t related to the quality or speed of the service provided, what incentive is there to excel? Just wanting to keep your job? The professionalism that comes with wearing the apron? I’d rather trust the financial incentive, which is far more powerful.

    Meanwhile, there’s really no reason for age-old gripes such as not knowing how much to tip or the difficulty of computing the proper amount. Tipping 15% to 20% for decent service is a no-brainer, and whether to make a statement with a bigger or smaller tip is up to you. And if you still don’t have a tipping app on your smartphone—or even a calculator, for that matter—just ask your waiter to do the math for you: Living on tips has made him better at math than most people will ever be.
    Interesting.

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    "Alexa, slaughter the fatted calf."

  • #2
    Originally posted by Gingersnap View Post
    Interesting.
    And spot-on.

    In many ways, a tipping system is the ultimate in capitalism: you pay for precisely what your perceived added value is.

    Personally, I would hate to live in a tip-less society. I believe strongly in paying well for work well done. So much so that I was rather embarrassed when I was told that I was being "grotesquely generous" for what I considered a relatively normal ~19% tip in a rural Czech restaurant many moons ago. The tip that I would normally have left for decently good service at an Applebee's was literally considered an insult, a form of unwanted charity, in this rural Czech town.

    I guess I can see how it would seem embarrassing: six of us ate like kings, complete with wine, beer, aperitif, and spotless service for something like $25. A $5 tip for that seemed quite appropriate to my eyes (converted to koruny české made for about 19% rounded), but I was quickly cautioned that it would actually be insulting to the staff as being "too much," as if I had walked into the place throwing around $100 bills on the ground for others to pick up.


    Anyway, I don't particularly have a problem with someone running a tip-less restaurant or whatever. I sell a number of all-inclusive properties that strictly forbid tipping. I've actually been uncomfortable in these places because I expect to give someone who comes into the room and tidies up at dinnertime and leaves a mint on the pillow a buck or two, but that's their method and I choose to adhere to it. But I would never, ever accept having it somehow mandated that someone cannot work for tips. And I think that most waiters, bellmen, etc. wouldn't stand for it, either.
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    • #3
      Service suffers without tipping in all but the very most exclusive venues.
      "Faith is nothing but a firm assent of the mind : which, if it be regulated, as is our duty, cannot be afforded to anything but upon good reason, and so cannot be opposite to it."
      -John Locke

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      • #4
        Speaking as an ordinary American gal who has waited tables (all too much), I would have been shocked but ecstatic if one of my customers had thrown $100 at me for just doing my job on a regular table.

        I guess my work ethic just isn't that rarefied. I wonder if the actual servers themselves would have had such scruples.
        "Alexa, slaughter the fatted calf."

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        • #5
          Tipping is a subject that gets beaten to death on the International Hunting Forum I frequent, especially when it comes to tipping in Africa. The people of OZ and NZ are adamantly anti-tipping. Europeans are generally considered reserved tippers and Americans are viewed as a walking ATM machine. I suppose the problem is that when you are paying $2,200 a day to hunt Lion with a $10,000 trophy fee for being successful then how much should you tip?

          Here's a "suggested tip schedule" from the website of the folks I'll be hunting Elephant for 14 days with in 2015.

          If I follow their suggestion the tips would total $4,130 for two weeks.

          GRATUITIES

          "This can be an awkward subject but we do understandably get allot of requests for guidance and the below is strictly an average! The below are figures we have seen over the last five years, some people leave more and some less. We must emphasise as with all gratuities none of our staff expect a tip and obviously they need to be performance based.

          The camps generally have six or seven staff and then of course you will have two trackers, a driver and a game scout on your hunting vehicle. We hope that you find this of some use!

          Camp Staff +/- USD per hunting day
          Manager 20
          Cook 15
          Waiter 1 10
          Waiter 2 10
          General Hand 10
          Skinner 15
          Assistant skinner 10


          Hunting Vehicle +/- USD per hunting day
          Professional Hunter 100
          Cameraman 30
          Tracker 1 20
          Tracker 2 20
          Driver 20
          Game Scout 15


          Forum thread on tipping if you care to read the arguments for and against
          If it pays, it stays

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