Do you vote? I do. I don’t mean voting in the presidential election. I mean voting with gratuity. One of the strangest aspects of our economy is the concept of gratuity. Tipping. Billions of dollars are exchanged every year through this ancient process of giving money to someone. Sometimes the money is earned, sometimes the money isn’t earned, and sometimes everyone involved is clueless about how tipping should work. I believe tipping is a vote, a vote on how well you liked your server.
If I may steal a ridiculously overused technique that is used in every graduation speech in America, and define the word we are talking about. A tip is defined as a sum of money given to someone as a reward for their service. Let’s examine this. A sum of money is pretty vague. It doesn’t say a reasonable sum of money. It simply says a sum of money. The definition goes on to say “given”. “Given” is not the same as paid. “Given” implies that the act occurs at the givers discretion. We then get to the word “reward”. Hmmm. I guess that I am going to be forced to now define reward. A reward is defined as a thing given in recognition of service, effort, or achievement. I think that the word effort is what stands out here to me. Should you reward someone for a complete lack of effort.
Let’s briefly digress and examine who we might tip. Waiter, barber, bell-hop, taxi driver (not Robert DeNiro), house cleaner, masseuse, bartender, doorman, baristas, and sushi chef. I feel reluctant to tip some of these people. When a taxi driver owns his own cab, I feel weird about tipping. A bartender tip can be weird thing. They poured Peach Schnapps and Sprite over ice and handed it to me (kidding). And tipping a barista for a $4.00 cup of coffee is a little excessive.
My rule of thumb on tipping a waiter is 20%. If they do a great job, then I will tip them more. If they do a terrible job then I will tip them as low as 12%. I think the whole idea of a restaurant passing on labor costs to the consumer in such a crazy way is strange. I guess tipping a waiter is better then having food prices increase by at least 25%. I have never been a waiter, so I don’t fully understand both sides of this conversation.
What is your tipping baseline? Do you use it as a vote?
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.
18 thoughts on “Pete the Planner’s guide to tipping”
Since I was a server for 6 years, my view on this is biased, but here’s what I think. Let’s this about this for a minute – in general, servers make, at most, $3.00 an hour (unless you’re lucky). Therefore, our primary source of income is tips, given that the restaurant is busy (a chance to make them) and that we do a good job. It is really important that we are making at least 20% of whatever we sell so that we can “survive” on this living.
I find that most servers (not all, but most) are harder workers and more motivated at work than those who work for a set wage at a clothing store or work as a host/hostess. I’m not saying these people aren’t motivated, I’m just saying that they already have the security of a wage. Servers, in a sense, are salespeople for themselves, not necessarily their place of employment. This is why they have more motivation to give great customer service. We also have a better chance to make more money if we keep this in mind. But I wanted to give great customer service because I wanted those people to come back (and it makes me feel good about myself). My regulars were a big portion of my income – once someone knows you and respects you, it is a lot easier to make them happy.
While I do not serve anymore, I still follow a rule of thumb when I’m out: 20% for an acceptable job, no less than 15% for a bad job, and 25% or higher for a great job. I understand the frustration that comes with bad service, but I also would like to give some people the benefit of the doubt. We all make mistakes.
I never tip less than 15%, but I also use the following rubric:
* If service is exceptional, I speak to a manager and let them know the name of the server
* If service is terrible, I tell another server that I think my server is a bit overworked but that I don’t want to get them in trouble with their manager
I think Thomas Keller sums it up best in the opening of this article. Based on the margins that restaurants have to operate within, it is nearly impossible to pay service staff what they (most often) deserve. There is a weird dynamic in restaurants because servers typically work 4-6 hour shifts and can take home pretty nice amounts of cash (that are or aren’t always accounted for properly). Cooks work VERY long hours, doing very intense, difficult and sometimes dangerous work and get paid a minimum. Now there is an argument that restaurants of a high calibre often times, and unfairly distribute the service fee revenues by including themselves in the equation….
I can’t add much more than Jenn, Robby or Neal because they all stated this very eloquently and logically as I would. OK, well that Keller guy was pretty on point too; but, who is he anyway? 🙂 Peter, you also were right on “tipping point” with the comment of a higher serving wage is going to be added right to the price of the food/drink and this is really not possible either.
The one point I will make that wasn’t brought up is the “tip share” quotient. As Jenn can attest, a chunk of most servers/bartenders tips get “tipped out” to others that are helping throughout a shift. A busboy/girl, hosts, bartenders and in rare occurences kitchen and/or management (not at our concepts). So, your 20% tip, often becomes 17% after tip outs have been completed at shift end.
Neal also stated something that needs more attention – tipped servers/bartenders often make more money than kitchen staff and I’ve even seen it happen with them making more than management. Can be a very discouraging and unmotivating method of career advancement in our restaurants.
If you follow me on twitter (cough, @brewhouse, cough), you may have missed this tweet I sent this week, since I don’t tweet much, about what move Darden Restaurants are making in a move to save their company $30 MILLION dollars in labor wages: Darden: 175,000 employees, $2.4 B in labor costs. New Tip Sharing policy will save them $30 M/year http://bit.ly/eZcI7H
Interesting post Peter.
Yes, I use it as a vote. My standard starts at 20% and I adjust based on service, plus/minus roughly 10%. I’ve not left a tip exactly once, and that was at a long-time Broad Ripple restaurant after essentially being ignored by the bartender the entire time we were there (I left her a note explaining why as well). Conversely, places where I’m a regular and get treated very well tend to get tipped in the 30 – 40% range.
That said, I still wonder how the whole idea of an entire industry not paying their staff a decent wage and expecting customers to pick up the slack got started?
I enjoyed everyone’s input. I should mention that I did tip out to the kitchen 15% of my tips made. So, if I made $100, then they got $15 of it. This was expected of every server, and if I felt like the kitchen was overworked, I generally gave more than that. It’s a team atmosphere, and I think that the people who make your job easier should be rewarded.
I also think that cooks are severely underpaid, which is why I’m happy to give them part of my tips.
In regards to tip sharing, I have somewhat of a problem with this if the server did not help with my tables or I did not help with theirs. More times than not, we were very busy and could only focus on the sections that we were given, which could range from 4-9 tables at any given time. With 6 years of experience, I was able to effectively manage each table on the floor and in my head. I rarely received helped, but I tried to help when others were struggling. I don’t expect tips from them, nor do I think they should expect tips from me if I brought out one drink to their table. Unless we are sharing a large party, which to me, is over 15 people, I don’t think the tips should be shared. I think sharing is appropriate for cooks/busboys,etc., but what we make is our own, because we are expected to be responsible for our sections. If we can’t handle it, then our sections should be smaller.
I really never considered how underpaid kitchen staff is compared to the servers. It takes an entire restaurant staff to put on the show, and it’s kinda interesting to think about their different rates of pay. I’m loving all the comments. Keep em coming.
Really great points about tip sharing. Generally speaking, I have always gotten the impression that most servers don’t like tip sharing, and honestly I can see their point. Speaking from a strictly “service” perspective, I think tip pooling diminishes server accountability.
I can tell you that most servers see gratuity as a “vote” as well. Most take it VERY personally (sometimes to the point of tears) when they don’t agree with a tip. From an operators standpoint, there is no better way to monitor guest satisfaction of any particular server than to monitor their tips. It is the single most telling metric we use.
Some years ago, when I was working in the service industry in New Orleans, I wrote an article on tipping. It contains some of the same above thoughts and some others that I think make a good point. If you’re interested in it, I’ve posted it here to download (Word document) >> http://bit.ly/fLslKY
My thoughts are along the same lines as Neal & Thomas Keller as far as tipping in a restaurant goes. We as owners/employers have been forced to make the choice that the front of the house service staff gets the benefit (most of the time) of controlling how much they get paid by how much effort they put into taking care of the people who come into our establishments. Although we expect our back of the house staff to bring their A-game everytime they come to work, regardless of their pay rate, they do have the luxury of not having to be the face of the establishment when the customer cannot be pleased no matter what the server does. And it would be impossible for us to pay both staffs what they deserve without the menu prices skyrocketing.
While I love the idea of the addition of a service charge to make it more even, I’m not sure the customers of Indy would love it. Or get it, if you talk about them en mass.
I don’t use my tipping strategy like casting a vote, I use it to say thank you & that I empathize with what they do, after having done it myself for 20-ish years.
Great thoughts from everyone. The one issue that hasn’t been mentioned regarding tip pooling for servers is the difference in habits, specifically smoking (although general laziness was an issue too). Most Friday and Saturday nights I spent 15% of my time covering for people who went outside to smoke. I ended up running their food, filling drinks for them and taking care of my tables at the same time. If I had good tips and they didn’t, I would not want to support their habits by paying them some of the money that I worked my butt off trying to get. Servers are salespeople, some bad salespeople make less than the average wage at any company and some make a lot more.
I would have been in favor of sharing in support of kitchen staff though. Our kitchen team was great and worked way harder than a few of the servers.
That being said, I tip 20% unless something is really bad, but I’ve never tipped less than 10% (and it was awful service). My mother said something simple about servers when I was a kid that has always stuck with me “an extra dollar or two is more important to them then it is to us.” I didn’t realize how true that was until I was a server. You start to rate yourself based on tip %, not dollars. A $2 tip on $20 is frustrating and makes you wonder what you did wrong for the rest of the night. $4 on $20 is validation of a good job and it only cost a few bucks.
Oh yeah Brandon….smoking is a big no no. We don’t let anyone smoke while in the clock. Period. If you smell like a cigarette when you come to work, you’ll be asked to leave.
I, like most responders on here so far, tip at least 20% and generally it’s more than that, however, I have this love/hate relationship with what is considered good service. Having been on the working side of the service industry before, I am more lenient than others when judging service. I know all the variables that can make an experience seem like bad service that really aren’t the fault of the server. On the other hand, there are many variables that customers don’t see that make the service experience less than what it should be.
In Brandon’s case, covering for another servers’ smoke break is somewhat of a burden to him, however, it is also a service detriment to the customer. When servers take smoke breaks, the service they are supposed to provide, suffers. A server that may have a 7 seated tables, now has to cover for 14 tables. Most restaurants would never intentionally assign such a section to a server for the mere reason that service would suffer. Granted that it may only be for 5 minutes at a time, the fact remains that it is a service detriment.
There are numerous other little things that can detract from a service experience.
How many times have you seen a server or bartender texting/facebooking/tweeting/etc. while on the floor? Each minute doing so, is a minute gone by that a customer is not being tended to. With the exception of Scotty (above), the time on FB/Twitter/etc is not enhancing the customer experience. Many times I see servers at a service bar texting or facebooking while supposedly waiting on drinks but the drinks are right there in front of them but they have to finish their social activities first before serving them. Those are precious minutes to a customer that are often overlooked. How many customers realize they could have received their drink two minutes sooner if their server had not been checking their FB updates? While these two minutes may seem trivial to those on the outside, multiply that two minutes by the number of times it can happen during one shift and the restaurant has potentially lost an hour or more of service time due to things like this.
Anyway, I love great service but I also recognize good and bad service in different ways than others may. I am very appreciative of being served when the service is genuine and I will always show my appreciation for it.
How has no one referenced Steve Buschemi in Reservoir Dogs? The opening to that movie is classic. You will have to search YouTube yourself, Im not Scott Wise & cant get away with posting that kind of language online 😉
I waited tables in the mid-90’s to help pay my way through Purdue. I did work at the Olive Garden for about 5 years. Started in as a bus boy then moved on to waiting tables and bartending. Average tip was about 15% for everyone. We then tipped out the busser and the bartender. I usually tipped them out very well so that when they see that I have a table that needs cleaned or a drink that needs to be made, they would help me out first.
When waiting tables, we received our hourly wage of $2.13/hour. When averaging it out over a week (including tips), I would make about $20-22 per hour. Waiting tables is very hard work and you have to be a great sales person. The best part was you were able to go every night with money in your pocket
Currently, I tip 15% for average service. 20%+ for great service. 10% for very poor service. I also never hold the server responsible for things that happen because of the kitchen staff. They have no control.
As for the link that Scott has posted about Darden, this is just a way for them to lower the pay of bussers and bartenders. If they want to fix their revenue issues, don’t take it out on them, improve your food and experience. Just my two cents on that. Maybe Chef Ramsey could help them out. 🙂
Tips means to ensure prompt service. Business owners must make up the difference if a server does not make minimum wage with their hourly rate and tips over said pay period. I have worked in the industry for 8 years and have always averaged way over that. Serving for females is a great way to work hard and potentially make great money. I always average out over 20% and pride myself on the hard work that takes. I am blamed for everything as server so my responsibility to check kitchen’s work before running food, being at expo line to check that good when ready ( ie not out smoking;)), create good relationships w busser bartender and hostess to create ultimate teamwork— quick drinks, quick table turnarounds, large parties ect.
People go out to eat for an experience, if a server works to create that service they deserve it. If they don’t, don’t tip, they will quit and find something they are good at and do like. I hated watching slackers and bad wait staff earn the top dollars as well!
Sorry for typos: iPhone
I am just a restaurant attender. I enjoy the experience as someone put it. I baseline at 20%, I have given as low as 4%. I always tip a little, to make sure its known I didst forget. As a point of interest to all server, its amazing how far good communication goes in helping your tip. If you know my food is running late, come tell me ASAP. Then I’m prepared. If the bar is backed up, tell me when I order a drink so I can be prepared. Also that will warn me me to order my 2nd drink earlier.
I don’t care if my food is late, wrong, whatever. That doesn’t affect my tip. It is all how the server handles it that determines the tip. Warn me about delays, quickly offer to fix errors, or maybe offer a side to eat while I wait for re-cooking if the main meal will be a long time to cook.
Little things like that can really turn a so-so experience into a good memory that will keep me talking up your reataurant. And keep the tip up at a high level.