Tipping … My 25% On the Topic

Did you see the Pete Wells column on tipping? The New York Times restaurant critic recently created a stir when he declared tipping to be “irrational, outdated, ineffective, confusing, prone to abuse and sometimes discriminatory. The people who take care of us in restaurants deserve a better system, and so do we.”

OK, I tend to agree.

What to do about it is another matter. Most of my readers here are restaurant owners, chefs, chef/owners and managers. They deal daily with the pressures of the service industry on the cost and human side … payroll, food and beverage costs, health care now, regulations … the nut you have to crack to make a living and keep the bank, partners, employees, vendors and guests all happy. Did I forget you and your family?

We are all consumers … when we go out, we become the guest. Now the stress of tipping falls on us. For me, the server would have to commit a felony upon me or my guests for me to tip less than 20 percent (post tax) and I probably average 25 to 30 percent while always averaging up. Many tip on the total experience. Some try to separate service from any hiccups … like a poorly prepared meal … or a surly host … or a dirty bathroom. If it’s a buffet, some tip less. I don’t do any of that. Just give me the check, let me figure the baseline 20 percent and I go up from that. Does that make me a good or bad person? I don’t know.

I do know it’s all complicated. Servers tip back to the bar and bussers. Some restaurants have tried pooling to share some of the table wealth with the hosts and kitchen workers. Some restaurants charge back the credit card fees to the servers when they get their paychecks. Some say the only ones making money are the lawyers who try to help you interpret the law (or laws if you cross boundaries with businesses in the District, Maryland, Virginia and Delaware). Maybe you are part of a chain.

We know about tip credits that vary from jurisdiction to jurisdiction (in California and Washington, there is no tip credit), the new IRS reporting regulations regarding service charges starting in January (I hope you know that) and fact that servers always brag about how much they make … adding to the resentment that can build on the restaurant team from the front to the back of the house and into the owner’s office . Does the guest understand all of this? Do you?

I always thought Steve Forbes had it right calling for a flat income tax. Just find that magic percent and make it the same for all. Scrap the tax code books … simplify the tax form to a page and pay our fair share. You see where that has gotten us. Just the business and politics of taxes has too many other folk’s livelihoods dependent on its complexity and inequity. Should there be some exception to the flat rate … perhaps. But scrap it to zero and let the politicians and powerful spend the next 100 years building it back up to its unwieldy absurdity and scrap it again. I guess it’s so simple it makes me look silly.

But back to service and tipping: what does the guest actually gain from a generous tip. You pay it after the meal, so there is no incentive to give extra service for extra dollars. It can lead to profiling … making racial judgments about who tips more or cultural bias with regards to those who travel to the US from countries where the tip is included. I have always believed that most Americans don’t understand service … on both ends of how to give it or how to receive it. We turn it into a server/master relationship as opposed to a professional one in Europe or the cultural DNA of Asia.

Wells sites some of the national “top chef” type restaurants that have abolished tipping … Per Se, Alinea, Chez Panisse (California, Chicago and New York) to name three. But that is not the mainstream and the idea of abolition of the tip is one that is not likely to gain traction anytime soon. Our business model for restaurants which is under attack from all sides now and the tipping model which is part of the American cultural fabric will keep it in place for a long time.

One argument is that a change to a fair wage system for work done would raise the price of the restaurant meal and drive customers away. Remember that the true cost of the meal to the guest is the meal plus tax plus tip … so, for example the cost is $100 plus $10 (the District tax) plus say $25 (my tip) for $135. What should the menu price reflect if tipping is gone? Yes, the price will be higher but does the guest understand why … probably not.

It may not change soon … but you can count on attempts by politicians and consumer groups (and yes, unions) to change the system (the business model) whether it’s a raised minimum wage, affordable health care or new FOG fees for your fats, oil and grease.

I can remember a seafood company in Ohio that I used to buy from that had the motto: Good Seafood Isn’t Cheap; Cheap Seafood Isn’t Good.

About the Author

Michael Birchenall is Editor and Publisher of Foodservice Monthly, a regional trade publication covering the foodservice industry of the Mid-Atlantic (DE, DC, MD, VA). Foodservice Monthly has been recognized as the Restaurant Association of Maryland's Allied Industry Member of the Year and by the Restaurant Association Metropolitan Washington as the Joan Hisaoka Associate Member of the Year.

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