TOO or not TOO

Tipping

TOO or not TOO

Too
1. in additions: also
2. Excessively
3. to such a dgree as to be regrettable
4. very
5. in a manner beyond an appropriate degree
6. inordinately , unduly , to excess

Tipping has me puzzled !

Why?

I see people that are living from day to day tipping in excess. What is the rationale behind it.

I see it in more places every day the corner grocery store clerks , liquor stores ,

The clerks tantalize the male customers behind bullet proof glass or in a safe public place.

What statements are these guys making when tipping for purchasing package liquor?

The women have large contaniers next to their registers full of money.

My sister in the late 60s worked as a waitress in downtown Gary she made over a hundred dollars a day in tips it made her employer so mad he devised a scheme to get a percentage and she was not even getting minimum wage.

She worked in house cleaning at the Palmer House in Chicago it was nothing for her to rake in $20,000 a year in tips.

I must admitt going to strip clubs in my younger days and tipping the girls to excess.

Service with a smile NO!

(Edited by Silas Geronimo Sconiers on 2/07, 2:34am)

Post 21

Sunday, April 3, 2005 - 10:59am

As a hotel and restaurant manager and owner for more than a decade, perhaps I can give some insight into the reason for tipping.

Typically, restaurants, as are allowed by law, pay wait staff a wage lower than minimum wage. The idea being tips will make up for the low wage. Back of the house staff, cooks, dishwashers, prep cooks, etc. get a much higher wage in order to make the positions more attractive.

If you don't want to tip, and you expect no one in society to tip. Then you shouldn't be shocked to see food and beverage prices for restaurants to jump up 25%. (So why not just tip then since if no one did you would be paying higher prices anyway) The reason being I as a restauranteur have to compensate my wait staff well enough in order to attract people from the labor market to those positions. If they didn't get tips, I have to pay them a much higher wage But as a matter of psychology, people would rather see a lower price on the menu and tip accordingly rather than have the prices higher to begin with.

Now, restaurants have a profit margin from 5 to 10 percent. Awfully low, and with the tremendous cost to operating a restaurant and being in a highly competitive market, you can see why 8 out of 9 restaurants fail within 3 years of operation. It's a highly competitive business. Anything that a restaurant can do to get tables filled they will do it.

Which brings up the last reason for tipping. Tipping is a euphemism for profit-sharing. The more customers I get, the more money I make, and the more money my wait staff makes. In my restaurant, my wait staff actively goes out of their way to get more customers to come to my restaurant. They have business cards that I have given them to hand out that doubles as a coupon for the restaurant. They get friends and family member to come to the restaurant. They give the best service they possibly could to make sure the customer comes back. They work harder, more efficiently, and try to see it that the restaurant becomes successful. But this is even better than profit-sharing, there's no risk of having free riders. Each individual has to perform well in order to get that profit share.

As a final note, people who work in restaurants are not stupid. Many waitresses/waiters are full time professionals looking for a part-time job to make extra money. Others are college students, others used to be professionals but found they can make more money bartending or tending tables. The rest, are just hard working people who genuinely like working with the public. (of course many are really stupid and lazy, but they don't last long with me) So please, if you liked the service you got, just throw a few bucks on the table. Don't like it go to Europe and get bad service since they don't tip there.

Post 22

Sunday, April 3, 2005 - 3:43pm

John Armaos: Good points! What do you think about minimum wage?

Post 23

Sunday, April 3, 2005 - 11:05pm

Minimum wage does nothing but increase unemployment and drives up the cost of goods. Which drives up the cost of living and negates the whole flawed reasoning for establishing a minimum wage. I'm from Connecticut and we have one of the highest minimum wage scales in the country, it's currently at $7.10. The industry that I'm in is a low wage industry. A raise in minimum wage would instantly require I lay off a percentage of my work force. If minimum wage was lower or non-existent, I would without hesitation higher more workers so that I can make my product more competitive. There's no way I can keep raising prices and keep my clientel. It's unfortunate people don't realize this.

But there's a lot of problems with the market I'm in. Connecticut and the local municipalities do just about everything they can to destroy free market principles. We have very high property taxes and unfair zoning practices that result in a lack of affordable housing. We have Foxwoods and Mohegan Sun Casino in my county, and I have to compete with them for labor, labor that's almost non-existent because of the lack of affordable housing for low wage earners. That means I have to pay out higher than usual wages and I'm almost constantly understaffed. Recently a neighboring town has approved a theme park and resort called Utopia Studios, which will employ 20,000 people. I'm waiting to see where they will find these people.

Post 24

Monday, April 4, 2005 - 1:30am

"no one seems to question the morality involved, that tipping is bribery, a paying for service one should get anyway... or is bribery not a wrong?"

Robert I'm not sure I understand how tipping is bribery or immoral? Tipping is voluntary, you don't have to tip. And why should you get good service? Is good service from a restaurant your right to have? No one is obligated to give you good service. If you pay, you are only entitled to service as that is the extent of the contract unless a contract specifically states what kind of service you should get. It is up to you to decide whether the service you received was worthy of a repeat visit or of spreading positive or negative word of mouth for the restaurant.

People tip after they have received their meal and check. How can you bribe someone after the transaction has taken place? It would be bribery if you were required to tip before you received your food. Do you bribe a police officer after he has arrested you and thrown you into a cell awaiting arraignment?

Finally, if no one were to tip a server, trust me, as a restaurant owner, I know that if that were the case. I would most certainly have to raise my food and beverage prices around 25 percent to compensate my servers for the lost income. So really Robert it's your choice. If you don't want to tip, then don't bother tipping. I would just avoid going to the same restaurant twice.

And to the previous poster who said if the service was poor you would give one penny, it would be best to let the restaurant manager know you received such poor service. As a restaurant manager I appreciate customer complaints if they did not receive good service I do everything I can to make to make the experience better. You can even get a free meal out of the complaint if the service was bad enough. Just let the restaurant manager know, we are in a highly competitive business and would appreciate the feedback.

Post 25

Monday, April 4, 2005 - 6:27am

Thanks for giving us an "inside" perspective, John. You and Jennifer Iannolo - also a member of this site - might have some stuff in common; she's a food entrepreneur herself.

Thanks particularly for giving us your take on mimimum wage laws and for your last post on "bribery".

Jason

Post 26

Monday, April 4, 2005 - 6:48pm

As a waiter for several years with casual dining restaurants, I can almost completely agree with John that his descriptions are in fact the way it works... almost.

Years ago I worked in a hospital restaurant where tips were donated to charities, and servers were compensated a little above minimum wage. The difference in work ethic among coworkers was obvious: there was no personal benefit to providing excellent service, therefore servers did the minimum work required to keep their jobs. It was not a restaurant you would prefer to eat at (although regular guests never bothered to tip because there was no risk of upsetting the staff.) It is akin to commission for salesmen. In your local Circuit City electronics store, the staff gravitate to you like rats to cheese because their income depends on your purchases... but in your local Best Buy, where no staff is paid on commission, you'd be hard pressed to even find any staff let alone get them to help you.

The truth is the great majority of restaurant-goers do indeed feel obliged to tip their waiters, and the waiters in turn expect that 15-20% will be left on the check. As John alluded to, not leaving a tip may save you a few dollars, but in my observation the server generally does remember you and your next visit probably won't be as pleasant or timely.

John I think I would love to work for your restaurant. If each waiter gives the best service they possibly could... you must have some nice benefits. Sadly in my experience, the typical waiter does not employ such ethics. There seems to be a law of diminishing returns at play, where at some point the amount of work is not worth the increased tip. I mentioned earlier how guests generally feel it as duty to tip 15%; well, the typical waiter finds that same 15% on the table despite a wide range of different levels of work, making the extra effort seem unnecessary.

Maybe it is our culture, I don't know, but many of my guests do not feel they are rewarding me for a job well done (hence the term, gratuity). Some think of it as some kind of tax or extra charge they need to get out of the way before they leave, which is understandable (you eat out to enjoy yourself, not to critique your waiter). But then there are those that fancy themselves philanthropists, tipping not because I deserve it, but because I need it. You can see a small disappointment in their faces when I fail to thank them profusely like a beggar thanks his benefactors for allowing him to live another day. This is unsettling to me, and perhaps as a reciprocal this explains why servers in general possess a certain sense of entitlement. I had always thought the job merely attracted certain people, but maybe it is the nature of the job itself that indoctrinates the waiter.

Post 27

Monday, April 4, 2005 - 7:26pm

If a restaurant's service is so bad that I am leaving a dime for a tip, it is unlikely I will be back, so that part does not concern me.

I realize I am more of a hardass about this, but I refuse to be coerced into leaving a tip if the service is reprehensible -- I do not grant the unearned. If a restaurateur has not trained his staff to place value in customer service, then his bottom line should reflect that. When the service is good, I am very generous, as I believe in positive reinforcement as well.

In cases where the food itself has been inedible (a rare occurrence, thankfully), I have spoken politely with the manager, and had the charge removed from my bill -- but if the service was good, the server still gets a tip.

To give you an example from the other side of the fence, in luxury dining the staff is typically paid a salary -- but they approach their jobs as a career, not something to pay the bills while they are on their way to their next audition. Because of the seriousness granted the profession, the service never ceases to be stellar, and those waiters can command a six-figure income.

My two cents. Again. :)

Post 28

Monday, April 4, 2005 - 7:51pm

Stephen thanks for your comments.

I beleive I've come a long way with my restaurant staff. It's taken a number of years but I believe I've put together a team that shares my vision for the restaurant. I've been able to cut my hours back a little as a result of having more people there I can trust. I used to put in 70 hours a week with a half day off. Not a day off, a half day off. Now I'm down to 50 hours a week with one day off. One thing that helps is finding the individuals on your staff that exhibit leadership, and elevate them to positions with more responsibilty.

I also have monthly comment card reports with actual comments from comment cards posted by the schedule. Each server is scored on how much positive feedback they received on comment cards and prizes are given to those who do the best. Negative comments are also posted.

I've had plenty of servers who do the bare minimum and expect a 15% gratuity. They don't last long with me. It states in my employee handbook that gratuity should not be expected or demanded, your service must speak for itself. I've fired a couple of servers for complaining loudly within earshot of customers how the previous customer only gave them a couple of dollars. I tell servers in the end it will work out, as long as you give the best service you can, you will get at least 20 percent at the end of the day. Some will always tip you one dollar no matter what level of service you provide. We have one customer my servers call $1.50 man. He gets the same meal every day, and always, no matter who the server is, tips $1.50. But it's not just how much one customer tips you, it's how many customers walk through the door and the total amount of tips you get at the end of the day. If you make $1.50 man angry enough, he won't come back. Do that to 100 customers like $1.50 man, and you lost 150 dollars. But you're right, people who just give the minimum 15 percent no matter how good the service is, don't really understand the concept of gratuity. But I don't believe any customer doesn't want anything less than excellent service. Someone who is attentive but not obtrusive, who is timely and efficient, and gives your food and beverage with a smile, is what everyone should expect. But many people I've noticed in my market definitely tip higher, especially at the bar, if the service is exceptional.

One time I went with my wife and two of our friends to a local restaurant. It had to have been the worst service I had ever gotten at a restaurant. The server could not care less about what service we got. Not only did I not tip, I demanded to talk with the restaurant manager and let him know the server we had was a great detriment to his business. He appreciated my comments. I felt obligated to tell him as I would expect someone else to do the same for me. Why would you not give the business an opportunity to make the situation right? Do people just want to put up with crappy service?

I have to admit my benefits aren't that great. I offer free meals, free spa membership for my hotel, and health insurance benefits at a weekly premium. It's the people that I've assembled that's made it possible for my restaurant to stay open. I've seen my competitors come and go and declare bankruptcy every year, I've even seen what were once major chain restaurants go under. My annual revenue has steadily risen every year despite more and more restaurants opening. The past three years we've had an Outback Steakhouse, Chili's, 99 Steakhouse, Applebea's, and Ruby Tuesday open in my area. Still, I'm able to survive and increase my revenues.

Post 29

Monday, April 4, 2005 - 8:38pm

John, your post is a testament to the fact that you are applying the right formula to your business vision. Well done. :)

Post 30

Tuesday, April 5, 2005 - 1:52am

Thanks Jennifer. I like the hotel and restaurant business but it can get extremely stressful. In my area the labor market for hospitality jobs is extremely competitive. We have the lowest unemployment rate for the state of CT, and two of the largest casinos in the world employing 10,000 jobs each. It's not a big area, and I can't lie and say every server I've gotten has been stellar. Sometimes no amount of training can substitute for stupidity. My restaurant is casual dining, my servers start at $6.10 per hour not 6 figures. I can't afford anything higher with the prices I have to compete with. Depending on the time of year, I can put an ad in for an open position in my restaurant and get only 3 applicants after a week. 2 of which may have prior arrest records and the third pierced and tatooed. Can be very demoralizing. I have foreign students on work visas come in the summer months to help out but I'm still understaffed and pay out a lot of overtime. (Don't know what I'll do when Utopia opens, I expect to lose 1/3 of my work force to it). Thankfully I've been in business long enough I've assembled a good team. My kitchen staff has had zero turnover for 2 years now. My waitstaff can't say the same. But two thirds of my waitstaff has been working for me for 2 years plus. My best server has been there for 10 years.

What upsets me on occasion is the silent disgruntled customer. The one that says nothing and leaves. Why? There's a comment card right on the table. I'm almost always there. Say something! I frequently stop by the tables and introduce myself and see how everything is. One time the customer said how everything is great and they love the restaurant, next thing you know they fill out a negative comment card on the way out. How peculiar? I'm a big boy I can take the criticism. If you hire a contracter to build your house, and you're not satisfied with the end result, you say nothing? Fine dining I can understand there's no excuse for mediocrity. But you pay a good premium for that and honestly if I'm paying 40 bucks an entree and I don't like it or the service, the manager is coming to my table ASAP. I used to live in Las Vegas and on occasion I've been thoroughly disappointed in a fine dining establishment. I guess since I'm in the business I feel obligated to let the manager know something he may not be aware of.

Post 31

Thursday, April 14, 2005 - 9:33am

The interesting thing about the practice of tipping is that it's nearly universal, even in the absence of external enforcement. Suppose you're on vacation a thousand miles from home, in a place you'll never visit again for years, if ever. It's your last night there, and you eat dinner in a restaurant. Do you tip? I'll bet you do, assuming the service wasn't terrible.

But why? No law requires it. You've already received whatever service you're going to get from that waiter. The chance you'll ever see, much less be served by, him/her again is negligible. So what impels you to tip?

The answer is, of course, that deep down in your gut you believe it's the right thing to do, and you'd feel bad about yourself if you didn't.

It has occurred to me that this might be the answer to the question of how an ideal Objectivist limited government could be funded without taxation. If people can be so convinced that they should kick in 15% of the cost of their restaurant meals to support the people who serve those meals, that over 90% of them do so voluntarily, couldn't they be convinced to pay the 10% of their incomes it would take to pay for the soldiers and policemen who protect their lives and property? I don't know exactly what it would take to bring about that level of public belief, but the fact that it exists for tipping convinces me it's possible.

Post 32

Thursday, April 14, 2005 - 2:43pm

Steve,

I agree with you. In discussions I've had with various people about funding government through voluntary contributions , the thing that keeps popping up is the "free rider" complaint. So 100% of government has to be funded coercively for fear that some fraction of the population will get something without paying for it. That's "not fair" so they say. But coercing 100% of the population 100% of the time is somehow "fair". I think what these people are covering up is the fear that the programs that they hope to benefit by at everyone else's expense would go away if they had to be funded "voluntarily".

Post 33

Thursday, April 14, 2005 - 2:53pm

Ah - so true.

Saturday, May 14, 2005 - 11:25pm

Steve,

I agree with you. In discussions I've had with various people about funding government through voluntary contributions , the thing that keeps popping up is the "free rider" complaint. So 100% of government has to be funded coercively for fear that some fraction of the population will get something without paying for it. That's "not fair" so they say. But coercing 100% of the population 100% of the time is somehow "fair". I think what these people are covering up is the fear that the programs that they hope to benefit by at everyone else's expense would go away if they had to be funded "voluntarily".

Mike that sounds interesting but I can't help but think we would not be able to adequately fund the mechanisms necessary to protect our rights (i.e. courts and police). What if there wasn't enough to fund an adequate police force through voluntary taxes? Should only the highest donors get police protection then? Which leads to my second fear, voluntary taxes could easily lead to corruption. For example one could curry favor in the courts and with the police if he or she is a large donor to government services. Individual rights require we are equal under the law. The idea of voluntary taxes just sounds like anarcho-capitalism is its logical end. What mechanism could insure us that voluntary taxes are enough to fund police, military, etc and still insure that we would all still be considered equal under the law?

Post 35

Sunday, May 15, 2005 - 2:51am

John,

Our present system of coercive taxation leads to exactly what you fear. People who "drop out" of the system pay no taxes but still benefit from the protections offered by our system of laws and government. High income people pay the majority of taxes but also hire lobbyists to represent their interest and make laws in their favor. The coercion in our present system encourages corruption. People want to a "pay back" for what is taken from them. The lack of a correspondence between what you pay and the services you get enables our present governmental agencies to cover up the true costs of government services. We have created a "ruling class" of bureaucrats whose "word" is essentially law. As far as there being enough money in the alternative voluntarily funded government, it would be in the interest of the most productive individuals for the protection agencies of a voluntary system of government to be adequately funded. These individuals would continue to voluntarily fund adequately out of their own self interest but without resultant loss of goodwill of the present coercive system. It is my experience that when people are truly free to make decisions their "humanity", their goodwill and sense of fairness is expressed the most strongly.

Just a few thoughts, late at night. I think adequate funding won't be the problem. If anything creating a system that encourages fairness rather than favoring special interests is the problem. I think free markets are inherently fair because they demand and encourage the most amount of knowledge and thought in all decisions by all parties. We ain't there with what we got, though I wouldn't throw the whole system upside down overnight. Every election is an opportunity for an incremental step in the right direction.

Post 36

Thursday, June 25, 2009 - 10:32pm