To Tip or Not to Tip?

no tippingThe tables may have been right next to each other physically, but, personality-wise, the two tables couldn’t have been farther apart. One table was sullen and stand-offish; the other table was jovial, boisterous, and in the mood to talk. Both tables were in my section. And I gave both the same level of service: keeping their drinks filled, making sure their orders were correct, etc. But, I interacted with each table differently, operating under the assumption that the one table wanted to be left alone and allowed to eat without being bothered by their server, and that the other table wanted a server who would join in their frivolity. My ability to read tables and adjust my personality as needed usually served me well, but not that night. After both had left, I retrieved the checks. Upon opening the sullen table’s check, I saw a big fat “$0” written on the tip line. Irritated, I glanced up to see my manager laughing his head off at me.

“That table complained that you were friendlier with your other tables than you were with them,” he scoffed out while shaking his head.

At that point, my loss of tip took a back seat to the humor I found in the reason for losing the tip. I had given that table excellent service, and had attempted to interact with them in the manner in which I believed they wanted. My point? At times, customers can be capricious, and no amount of effort will score a good tip.

Most often, though, my tip percentage was well north of twenty percent and my hourly wage averaged over fifteen dollars[1]. This was in the late nineties and early aughts, and, at the time, fifteen dollars an hour in the Southeast was a considerable hourly wage. While not considering the service industry as my long-term career, I enjoyed the work and was pleased with the amount of money I was able to make from tips. Like most of my fellow servers and bartenders, my focus was elsewhere.

My acting career took precedent, and the service industry allowed me the flexibility to go to auditions when needed and take extended leaves of absence when I booked acting gigs. Many service industry employees are in school, many are just getting into the job market and need the extra cash, and many others simply enjoy that extra cash[2]. The hours are flexible and the money is good. I worked with very few “career” servers, and the ones I did made more money than the rest of us[3]. My co-workers who did complain about their tips generally weren’t very good at their jobs and didn’t last long. Overall, my time as a server and bartender was marked by high wages, happy co-workers, and good experiences. This is why I am intrigued by the news that New York restaurateur Danny Meyer is eliminating tipping in his restaurants.

In order to fairly compensate the servers, Meyer’s will be substantially raising prices on the menu. That shouldn’t surprise anyone, and, once the math is done, I think that most customers will end up paying about the same amount as prior. That’s not to say that I’m a fan of this move, because I’m not. At least I don’t think that I am. I recognize that my initial response may be dictated by past experiences that may no longer be the norm in the service industry. Regardless of how strongly I do or do not feel about this, I am curious to see how Meyer’s move will play out in the future. With that in mind, I do have a few thoughts:

(Keep in mind, I no longer have much of a dog in this fight, and my following thoughts/points are not intended to be taken too seriously.)

  1. While working for tips, I would not have been happy if my tips had been replaced with a “livable wage.” I tended to get better tips than my co-workers. In fact, I always refused to apply the flat-tip on the bill of large parties that restaurants generally require; instead, I relied on my ability to generate an even better tip. My first question is will Meyer raise wages to match the level of the top-tier tip earners? Will it be a flat wage regardless of the server’s ability/prior tip percentage? I mean, I’m assuming that if the restaurants I was working in had done this, I would’ve received a pay cut. Receiving a pay cut, depending on how deep, would have removed my incentive to provide the level of service I had previously provided. Why go above and beyond to please the customer when merely adequate service will have zero affect on my salary?

Deep enough of a pay cut, and the restaurant would’ve lost an excellent server. In fact, I’m willing to bet that the majority of the best servers that I worked with would’ve simply found different, less stressful jobs than take a pay cut[4]. During the middle of a Friday dinner service when they’re in the weeds, the only thing that keeps many servers from ripping their apron off and storming out is the promise that sticking it out will net them hundreds of dollars in cash in three or four short hours[5].

If there is an exodus of top servers, unhappy with their pay cuts, the dining experience product will be devalued. It will definitely remove servers’ incentive to go above and beyond for a larger tip. Why exceed the basic job duties if there is no financial advantage for doing so?[6] Will Meyer have to lower his menu prices to compensate for the fact that the totality of the dinner service is no longer as excellent as customers have become accustomed to? If menu prices have to be dropped, what then happens to the new, high wages for the servers freed from the tyranny of capricious tips?

  1. Numbers can be a tricky thing. There is a reason why stores sell things for $9.99 instead of the nice even and round $10. Rationally, we all realize that those two prices are essentially the same; psychologically, however, for many, $9.99 looks and feels a lot less than ten bucks. I would imagine that with Meyer’s raising of prices, there will be some growing pains; that customers will need some time to get over the sticker shock of seeing their favorite menu items double, if not more, in price. How will it help servers if their hours get cut because customers decide to eat at home instead of paying the new sticker prices? That new hourly wage isn’t going to mean much if you’re getting less hours.

To be clear, I’m sure that if this is a problem, it’s a problem that will eventually resolve itself (the other issues in this post notwithstanding). Customers will come back; their “dining-out” budgets will stay basically the same; and Meyer’s restaurants will continue to be highly profitable. My concern, especially if I was still working as a server, is about the interim. I saw this happen, albeit in a somewhat different situation, while working as the Driver Coordinator for a pizza delivery restaurant.

The franchise owner, or his CFO, I don’t know whose idea it was … someone in the franchise office decided that adding a two dollar delivery charge was a good way to increase the franchise’s profit margin. The drivers were highly suspicious of the move, and their suspicions proved true, at least in the short term[7]. The customers, not happy about the rise in prices, took it out on the tips of the drivers, even knowing that the two dollars went to the restaurant and not the drivers. The drivers complained, but were assured that the customers would eventually get used to it and tips would go back up. Well, some of the best drivers didn’t wait around to find out; they jumped ship and found other jobs. I didn’t blame them.

  1. Going back to the “highly profitable for Meyer” – The percentage of the GDP that is profit is much lower than most realize; rarely exceeding 10% (and I do mean “rarely”), the % of the GDP that is profit hovers around the 6% range in most years, most good years, that is. Profit doesn’t really work the way most “Occupy Wall Street” types seem to think it does, and, don’t misunderstand, I’ve seen my share of corporate greed and have my concerns, but that’s a discussion way outside the pale of this post. But, what’s not outside the pale of this post is that according to the Small Business Administration, small businesses make up “99.7% of U.S. employer firms,” and “49.2% of private sector employment.” Small business owners make up a sizeable chunk of the GDP, and, it should go without saying, small business owners have different challenges than do large corporations.

Owning a restaurant is a very risky business venture, riskier than most. I have had friends who have owned restaurants, and, even with busy restaurants, struggled to make ends meet. Raising prices in order to raise employees’ wages may make a risky endeavor even riskier. I’m curious how Americans, after decades of one way, will respond. I’m sure, over time, dining out patterns will return to normal, but, will the interim see a dip in dining out? If I had to bet, as I’ve already stated, I would bet, “yes.” If that’s true, what happens to those restaurants which are the sole source of income for a hardworking owner trying to build a business? (side note – this is why I’m not a fan of raising the minimum wage for restaurant workers. Doing so will have a negative impact on the employees it’s intended to help. If small business owners have to close their doors, how does that help? If small business owners are forced to automate, how does that help? Not to mention that artificially raising wages could simply change the mean in regards to “livable wage.” If prices go up to accommodate the wage hike, the new wage will be worth less and we’ll be right back where we began.)

I’m not sure if Danny Meyer is classified as a small business owner or not (he owns thirteen restaurants in New York), but he’s incredibly influential and is very profitable as a business owner. He may able to weather whatever financial storms come his way, and emerge on the other side financially secure and with another wreath to add to his reputation as a restaurant innovator. I’m not worried about him.

  1. Euro-philes like to propagate the myth of the “ugly American,” when, in truth, Americans are some of the world’s best tourists as ranked by many polls. You know which country’s world travelers are not ranked high? France. I had many French customers tell me that they knew the American custom of tipping but they didn’t care because that’s not how France does it. The not-so-bright ones would inform me of their intentions early in the dinner service, and I would rarely make it back to their table[8]. Instead of altering the rules to accommodate rude French people, why not start calling out the French for being rude? As they say, “When in Rome …” – a maxim the vast majority of American tourists attempt to follow.
  1. The New York Eater article that I linked to above points out that the issue isn’t really about the wages of servers, but about the wages of line cooks and people working the back of the house. That’s fair, and poor wages for those in the back of the house are indeed a problem. I fail to see, though, how potentially hurting one employment sector is going to benefit another. Surely there are better solutions to the poor wages of those in the back of the house than lowering the wages of those in the front of the house. Cutting off your nose to spite your face comes to mind.

Regardless of any of this, as long as the restaurants you frequent expect the diners to tip their servers, please tip well. You have no idea what’s going on in the back of the house, and you may be punishing your server for things they have no control over.


[1] And that’s not counting the $2+ an hour I got from the restaurant; that $2+ an hour was totally eaten up by taxes, which was fine. Banking over $15 an hour in cash every shift was why I was working as a server; I didn’t care about the paychecks.

[2] There are some, in my experience, that don’t fit into any of those categories; service industry workers who were drifting aimlessly through life and found jobs in the service industry that gave them enough cash to live on but without committing to adulthood. But those co-workers were the exception. And then there were the career servers, but you’ll read about those in a brief second.

[3] They generally worked more hours (usually the best shifts), were better at their jobs (which translates into higher tips), and had more meaningful relationships with their customers (which also translates into better tips) than did we short-timers.

[4] As much as I enjoyed my service industry jobs, as much as I enjoyed the large amounts of cash I would go home with, during peak dinner services, I hated my job. Serving, during peak hours, is incredibly stressful. At the end, however, when you have hundreds of dollars in your hand, you forget about how stressed you were an hour earlier.

[5] During the early part of the week, you work those hours for a mere thirty bucks or so knowing that you’re doing your manager a favor and, in return, your manager will give you Thursday, Friday, and Saturday dinner shifts.

[6] I guess hours will ultimately become the carrot on the stick that managers hold in front of servers. At first, I was going to write “prime shifts,” but if you get paid the same regardless of when you work, there will no longer be prime shifts. Actually, not true. The script will be reversed. If I get paid the same amount for working dinner service on a Monday as I do on a Friday, the prime shift is now Monday – far less work for the same pay. To keep the best servers happy, will managers schedule them during the non-peak shifts and schedule their adequate or not-quite-adequate servers during the peak shifts? That will definitely impact the customers’ dining experience.

[7] I left a couple of months after, so I don’t know how the move played out in the long term.

[8] If you’re not going to tip me, why would I waste my time on your table?

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4 thoughts on “To Tip or Not to Tip?

  1. Another great post! I’m glad you mentioned the European tipping situation. Having traveled over there a few times it has been confusing to know if I should tip and how much to tip since some of the tip is built in to the cost of the meal. However, it’s just some of the tip. You’re still supposed to give a little bit more to fill out the tip. It will be interesting to see how this change of policy will affect the wait staff at those restaurants. And, I didn’t know you were such a capitalist.

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    • Thanks, Michael. I was unaware that in Europe (I’m assuming specific countries?) only part of the tip is built into the cost of the meal.

      Honestly, considering that Meyers is a top restaurateur and seats at his restaurants are in high demand, the wait-staff in his restaurants will be minimally impacted. People, specifically rich, white liberals, assuaging their guilt by spending $500 on their meal instead of $250 (or whatever) will flock to his restaurants so that they can brag on social media about how their contributing to the shrinking of the wage gap. Never mind that the article in New York Eats states that top servers in NYC make more than $100K a year. It’s the effect on the wait-staff in the restaurants that follow Meyer’s lead that I think will be negatively impacted.

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  2. I was in Finland for a few days this summer to visit family, and what I found interesting was that while restaurants didn’t expect tips, they also found ways to cut wait staff. In several of the places that we ate, we ordered at the counter, and they offered only single-serve drinks (and water). But at restaurants that took orders at the table and kept refilling beverages, I never felt that service was lacking. I think my sister indicated that, particular to Finland, they won’t bring your check until you specifically ask for it. There is no rush to flip tables. It was a different atmosphere. It will be interesting to see if that slowly works its way to restaurants I frequent here, in the States. (I’m not likely to visit any of Meyers’ places, nor others of their caliber).

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    • Based on your experience, do you believe that differing regional personalities will ultimately determine the type of service needed to provide the customer with good dining experiences?

      Building on that, one of my constant irritations with Europhiles in this country is their constant harping on how the social constructs of this country should conform to the social constructs of their favorite country. And, in my experience, those Europhiles tend to be some of the loudest self-proclaimed post-modernists and pluralists walking among us.

      P.S. Finland is high on my list of countries to visit.

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