How and Why to Tip

Tipping is perhaps one of the most irritating aspects of dealing with the service industry in America. It seems like everyone in the States expects some particular (and varying) percentage of your total bill, and for the great mass of people who’ve never worked in the industries in question the practice seems arcane and sometimes a bit like swindling. Another great blog recently covered this subject, and after making the Digg front page, the comments were prolific. A common and lamentable refrain was this: “Why should I tip someone for doing their job? Tipping is for exceptional service, not just ordinary service. It’s not my fault if their employer is a cheap ass.” One psychologist even commented that he was ethically forbidden to take additional compensation for his efforts. An explanation is in order here.

Tipping originated in a London coffeehouse where a box labeled “TIPS” was placed to receive a little extra from the patrons “To Insure Proper Service.” Today tipping is only standard behavior in the U.S. In most other Western nations payment for service is included in the pricing. Some of my British friends have even told me that tipping bartenders in the UK is considered somewhat insulting (though the same must no be true for waiters, as I have seen some ear-to-ear grins over even small tips there). In most of these other countries tips are appropriate, but serve their function as a little something extra for great service. In the States, however, employers and legislators have taken note of the trend towards tipping. As such, different rules apply. Simply put, the minimum wage for servers is half that of standard minimum wage, and excepting a few high-end restaurants in Chicago, I know of no place where servers are salaried or earn reasonable hourly wages. Tips are not supplemental to the server’s income. They are the server’s income. A restaurant’s pricing reflects this. One pays a bit less in the States for a plate of food than in the UK or France.

No one laments this arrangement more than the servers themselves. Servers are blue-collar workers trying to earn a living. In high-end restaurants, they’re highly skilled workers who’ve generally earned not only a slightly higher percentage but also the higher dollar amounts reflected in pricing. Restaurants like this arrangement for two reasons. First, it puts the onus of paying their staff on somebody else’s books, and second, it encourages servers to act as salesmen, just as commission sales do at car dealerships.

If you don’t like this system, don’t take it out on the server. They didn’t create it, and they probably don’t like it any more than you do. This failure by restaurants to think of servers as an integral part of their payroll results in a failure to think of servers as long-term employees worthy of benefits, sick leave, paid vacation, etc. Further, servers, don’t get all of what you leave, especially at fine-dining restaurants. They “tip-out” a percentage of their tips to the bus boys, food runners, and bartender. Think of servers like salesmen, but be glad that you know exactly what the commission is. Tipping poorly isn’t simply cutting into their “extra” money, but cutting directly into the money that they use to pay rent. Servers predict their income at a new job based on the PPA (per person average cost) of the restaurant and the average number of guests per server per night. Psychologists may not be able to take extra compensation, but that’s because they bill by the hour. Servers bill by the dollar spent, and they tend to provide better service accordingly. The difference is that they can’t turn you over to collections for failing to pay, but they can put a note in that little computer or book that says "Cheap Ass." I have even seen restaurants blacklist really dismal customers, telling them that there are no reservations available. The argument that "It's not my fault if their employer is cheap," doesn't hold water because you, in fact, are more like the server's employer than the restaurant is. Once upon a time it was even common practice in New York for servers to pay a percentage of their tips to the restaurant for the privilege of working there. Thankfully, there is increasingly a trend away from this, but it hasn't reached any sort of critical mass yet. Until you hear about it from someone in the restaurant industry, tipping is still a must.

A basic price guide:

Local Restaurant: 15%
Fine-Dining Restaurant: 18-22%
Wine Steward: $10-$100 (see the previous article for more guidance)
Bartender: $1-$2 per drink or 15% of a more sizable bill.
Hair Stylist: 10-15%
Taxi Driver: 15%
Bell Hop: $5-$20 depending on the quality of hotel
Hotel Concierge: $5-$100 depending on the quality and type of service rendered. (Concierges can provide amazing service like great tables at hard-to-get-into restaurants, or they can simply be good at using Google. Pay WELL for the former. Don’t even bother with the latter.)