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0dd1 Just awesome like that from Nowhere Land Since: Sep, 2009
Just awesome like that
#1: Feb 3rd 2013 at 7:50:42 PM

I'm going to open up with a quote of someone from another thread, since it sparked the idea of this one to me:

Yeah, and do you know what other parts of the service sector works perfectly fine without tipping? Practically all of them. Why must waiters and waitresses have to be at the mercy of the customer when a bus driver's worth is only measured by his employer?

How is it that, at least in America, the idea of servers in restaurants being paid through compulsory tipping came about? The post above makes an interesting point that most other blue collar public service jobs are compensated via paycheck rather than gratuities. What makes the restaurant business so different from the rest here? And is the idea of servers being paid almost solely through gratuities archaic, especially in a world where people need to depend more and more on far higher pay than the bare minimum?

Also, for those who live outside the U.S. and thus might be unfamiliar with the concept of tipping being almost the sole method through which servers in restaurants are paid (since they are generally paid far below minimum wage on the books), how is it that your country handles the concepts of tipping and wages for servers? How do you feel about the way the U.S. does it and the way your own country does it?

The main genesis of this thread's concept was this article about a server in an Applebee's who was stiffed by a pastor (who wrote on her check, "I give God 10%. Why should I give you 18?"*

) and then was soon after fired for posting a picture of the note on Reddit. If you want to discuss that, there is a thread here for it, but it's not inherently unrelated to this one.

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BestOf FABRICATI DIEM, PVNC! from Finland Since: Oct, 2010 Relationship Status: Falling within your bell curve
FABRICATI DIEM, PVNC!
#2: Feb 3rd 2013 at 8:06:33 PM

I'm afraid that in my lifetime I'll probably forget to tip dozens of waiters all over the world who needed it simply because tipping doesn't really exist in Finland. I suppose some people might do it sometimes but generally it's just not something that happens. Waiters get paid above minimum wage, which I suppose is reflected in the prices on the menu, so there's no problem. If you pay more than the price on the receipt you get money back. No one expects you to pay more than what's on the receipt.

I sort of like our system because I think tipping can be a hassle but whenever I'm abroad I do try to remember to tip, as I know I can't just extrapolate our system as applying for the whole world.

Anyway, if you ask me, I would recommend the system I know. If you want to pay the waiter some extra, you can just say so and mention it when you pay: "don't give me money back" or something. If a service fee is to be included in the price (but not as part of the prices on the menu,) just put it in the receipt and be done with it. I'm sure some places already do that. Customers shouldn't have to do maths after they get a receipt to determine how much above the stated price they'll have to pay.

Well, that's my $0.02 and you don't have to pay me 15% extra for that.

Quod gratis asseritur, gratis negatur.
0dd1 Just awesome like that from Nowhere Land Since: Sep, 2009
Just awesome like that
#3: Feb 3rd 2013 at 8:15:23 PM

I know there are a lot of places here that tack the gratuity to the end of the receipt so you know exactly how much to give if you're leaving a tip, but most of the time this is only for large parties. I do agree that it can be a hassle to have to do math in order to pay the server, but it's always been something natural for me I s'pose. It helps that I usually just leave 20% anyway, since I figure they need it and it's easier for me to calculate anyway.

edited 3rd Feb '13 8:15:37 PM by 0dd1

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BestOf FABRICATI DIEM, PVNC! from Finland Since: Oct, 2010 Relationship Status: Falling within your bell curve
FABRICATI DIEM, PVNC!
#4: Feb 3rd 2013 at 8:19:49 PM

I'd like to know how much you're expected to tip in different places. The only place I've been where people tip is the UK, and since I didn't know the rate I just asked my waiter - trusting him not to inflate the price too much. He said he usually gets 10-15% so I gave about 15%.

I assume that I'll be doing lots of travelling if I get to work on any of the jobs I could imagine myself doing, so the rate at which I should tip my waiters is something I'll have to look up wherever I go - if I don't know it already.

Quod gratis asseritur, gratis negatur.
Kami4 By Jove, Oh, My Gods!! from United States Since: Mar, 2012
By Jove, Oh, My Gods!!
#5: Feb 3rd 2013 at 8:20:54 PM

in Praise of Tipping by Robert P. Murphy I find this to be a really fascinating article about the economic benefits of tipping.

One of the most common justifications for government intervention is an alleged "market failure." There are countless mainstream economic models that purport to show the inefficiency of unregulated markets, which can ostensibly be improved by political means.

These analyses, however, often abstract away from the real-world problems of dispersed knowledge and high transactions costs. Upon closer examination, one often finds that the market's "failure" is in fact the best way humanly possible to deal with a complex situation. And nothing better demonstrates this resilience of voluntary, decentralized exchange than the custom of tipping.

Tipping, though commonplace, is at first glance a curious phenomenon.[1] Why isn't the tip for a waiter, say, included in the price of the meal? Or, going the other way, why aren't employees of fast food restaurants tipped? If one assumes that all economic actors possess perfect knowledge, tipping seems to be a quaint and inefficient practice.

But when we realize that market participants do not possess the same knowledge, the practice become more intelligible. For example, a restaurateur would find it very difficult to keep tabs on his entire staff. As such, it wouldn't be worth the trouble to tailor the wages of waiters and waitresses to their courtesy with customers.

The simple market solution is to allow the customers themselves to evaluate the service of the waiter or waitress. This not only reduces monitoring costs for the employer, but allows for the satisfaction of possibly different preferences among customers. Indeed, empirical studies, as well as casual observation, suggest that customers (especially male ones) reward physically attractive servers with higher tips, and thus tipping can be understood as a discreet way of channeling the most appropriate personnel into this line of work.

The phenomenon of tipping, broadly conceived, is the real-world market's response to the "missing markets" postulated in formal economic models.[2] When transactions costs prevent the establishment of a formal institution, spontaneous exchanges still occur to the benefit of both parties.

For example, a bar patron who doesn't wish to wait between drinks may give unusually high tips to ensure that the bartender is particularly attentive. (This avoids the need to set up, say, various zones in the bar, with one section charging higher prices for drinks but guaranteeing quick refills.) Street musicians receive tips ("donations") proportionate to their quality, as judged by their customers. I personally have found (when ordering Chinese takeout) that something so simple as allowing the vendors to "keep the change" means that I will be given preference over other customers (who in this case happened to be quite rude to the workers) upon my next visit.

To take other examples, one of my friends gives outrageous tips when leaving his car in a parking garage, on the theory that if and when the attendants decide to take a joyride, it won't be with his vehicle. I have read of a cab driver who makes thousands of dollars more in tips every year by keeping his taxi spotless and having the latest newspapers available for his customers. Finally, consumers who are egalitarians in their hearts but "know better" in their heads can indulge their generous impulses by rewarding those individuals who possess initiative and a good work ethic.

The above theory of the "function" of tipping not only provides a plausible explanation, but serves to clarify some of the debates over the custom. In recent times, there has been a drive to increase the range of professions receiving a tip (often at the behest of unions). But tipping only serves a purpose in professions where there is a high degree of subtlety in the performance, and where the productivity of employees is not easily monitored.

It would be rather pointless, for example, to tip the cashier at a fast-food restaurant, since he or she does not have much discretion over the quality of the meal. I would tend to side with tradition when it comes to which professions are tipped, and view with suspicion any move to bring the practice to a new one. In any event, as Steven Landsburg points out, increased income through tipping would in the long run be offset by lower base wages (at least in a competitive labor market).

This insight also shows the folly of arguing for a higher (or lower) percentage when deciding upon a tip. As with money—which fulfills its economic function regardless of the quantity of cash in the economy—tipping serves its purpose so long as everyone's expectations are coordinated. If the standard tip for a meal is 15 percent, then this is taken into consideration when diners choose a restaurant and waiters choose a profession. To switch to a new standard of 10 or 20 percent would only introduce uncertainty during the transition period, when prices and base wages adjusted. The purpose of restaurant tipping is to allow diners to deviate from the standard percentage, to either punish poor service or reward excellent service.

Before closing, I should point out that one of the major "paradoxes" in the mainstream treatment is why people should ever tip when they don't expect to return to a given restaurant (or other business). After all, the voluntary nature of tipping seems to offer a classic opportunity for "free riding."

However, I think this sort of question would be akin to asking why most people don't steal money from little children, even when there are no police officers in sight. It results from a crude homo economicus approach to human behavior, which is definitely useful in certain applications, but not as a general theory of human action.

The custom of tipping is an excellent demonstration of the market's ability to solve real-world problems of dispersed knowledge and transactions costs in order to ensure the maximum satisfaction of consumer preferences. Normally taken for granted, tipping is in fact a beautiful illustration of the power of voluntary, decentralized exchange.

edited 3rd Feb '13 8:29:28 PM by Kami4

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Talby Since: Jun, 2009
0dd1 Just awesome like that from Nowhere Land Since: Sep, 2009
Just awesome like that
#7: Feb 3rd 2013 at 8:28:43 PM

@Best of: Well, in the U.S., the general rule of thumb is 15%, plus or minus based on how good you thought the service was. I just tend to tip higher since I feel like it's polite to do and they need the money to survive anyway.

For parties of 6 or more, the restaurant typically tacks on 18% for the tip and adds it to the bill itself so you don't need to figure it out on your own.

edited 3rd Feb '13 8:28:57 PM by 0dd1

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TheBatPencil from Glasgow, Scotland Since: May, 2011 Relationship Status: I'm just a hunk-a, hunk-a burnin' love
#8: Feb 3rd 2013 at 8:38:38 PM

If I'm in a restaurant, I generally just round up to the nearest available note and let them keep the change.

And let us pray that come it may (As come it will for a' that)
IraTheSquire Since: Apr, 2010
#9: Feb 3rd 2013 at 8:41:44 PM

Tipping is not a thing in Australia, though there are jars in cafes for tips. And from what I heard those can go to the owner or shared between staff (it's called 'the tipping pool').

Advantages of this approach: 1) it spreads all the risks of terrible customers and 2) there is a group incentive to improve services as a bad waiter will drag down the tip pool overall.

Then again, here in Aus we don't have a waiter for a table system: anyone can serve a table and so tipping for one waiter is hard.

edited 3rd Feb '13 8:45:27 PM by IraTheSquire

C0mraid from Here and there Since: Aug, 2010
#10: Feb 3rd 2013 at 8:42:12 PM

As somebody in the UK, I'd wouldn't automatically tip as high as 15%. I think there's class issues involved, and some lying about how much people tip. For me it depends on the how good the service actually was, and what kind of restaurant it is.

Tipping is certainly a bigger deal in the US than over here. One question I have is this: On television people tip humouresly rude waiters high percentages. If I had to deal with that level of rudeness I wouldn't tip, or consider leaving a penny. If I'm having a bad experience at somewhere with a service charge I'd bring up my concerns early on, if it continued I'd ask to have the charge lowered or removed.

So would Americans (or other people) really tip bad service?

edited 3rd Feb '13 8:55:51 PM by C0mraid

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0dd1 Just awesome like that from Nowhere Land Since: Sep, 2009
Just awesome like that
#11: Feb 3rd 2013 at 8:48:51 PM

Yes, Americans would still tip bad service (except in the case of certain people, to whom I'll refer as "cheapskates"), since most Americans see it as something that we have to do, rather than something optional. It is considered rude if you don't, and you will most likely be shamed greatly for it if you don't tip.

Granted, if the service was really bad, they probably wouldn't leave 15%, but they'd still leave something.

@Ira: Some places here have it that the servers must pool their tips at the end of the night, but that depends on the restaurant and isn't everywhere. Most non-corporate stores here have tip jars too.

I will say that a disadvantage of pooling tips is that if you're good at your job and make a lot of money, you will invariably lose a lot of it.

edited 3rd Feb '13 8:52:02 PM by 0dd1

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QuestionMarc Since: Oct, 2011 Relationship Status: Having tea with Cthulhu
#12: Feb 3rd 2013 at 8:52:08 PM

Why limit the thread to tipping in restaurant?

I mean, delivery got some tipping too. I was taught that I should always tip the delivery man. My father delivered in his youth and got tips too.

It is a weird concept when you think about it. I mean, tipping a waitress makes sense if you appreciate her serving, but what about delivery? You see the guy (gal) maybe 1 minutes max.

Then you have the tip bowls which is just a "give us your excess pennies here plz" bowl for counters.

EDIT: Oh, and any job where someone might or might not help you bring stuff to your car.

edited 3rd Feb '13 8:54:14 PM by QuestionMarc

0dd1 Just awesome like that from Nowhere Land Since: Sep, 2009
Just awesome like that
#13: Feb 3rd 2013 at 8:54:36 PM

That is a good point, but in my experience, I usually get deliveries when I'm not home, so I don't generally have the chance to tip a delivery person.

As for other manual labor public service jobs, I'd say tipping is probably a really polite thing to do, yeah.

edited 3rd Feb '13 8:55:13 PM by 0dd1

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IraTheSquire Since: Apr, 2010
#14: Feb 3rd 2013 at 9:00:14 PM

Some places here have it that the servers must pool their tips at the end of the night, but that depends on the restaurant and isn't everywhere. Most non-corporate stores here have tip jars too. I will say that a disadvantage of pooling tips is that if you're good at your job and make a lot of money, you will invariably lose a lot of it.

Hum. Interesting. Do they still have the "one waiter specifically serving one table/set of tables" thing? Because I think part of the reason why tipping is not so strong here is that whoever is the nearest to the table at that time serves that table, so the service to each customer is a joint effort as opposed to "I am the guy who is serving you tonight".

Oh yes, sure. It's the risk vs reward thing again. Higher risk, higher reward and whatnot.

edited 3rd Feb '13 9:00:23 PM by IraTheSquire

QuestionMarc Since: Oct, 2011 Relationship Status: Having tea with Cthulhu
#15: Feb 3rd 2013 at 9:02:57 PM

Never said it wasn't polite to tip someone who help you, but the guy is paid by his employer for doing that already. I dunno, it just sound to me that it shouldn't be a social obligation to tip someone, but rather a sign of "hey, I appreciated your help/services, take that as sign of gratitude".

And another example that popped to my mind is tipping barbers. I dunno if it's just a Canadian thing, but I was taught to tip the barber after a hairjob. Same thing, it shouldn't be a social obligation...

edited 3rd Feb '13 9:03:29 PM by QuestionMarc

DrunkGirlfriend from Castle Geekhaven Since: Jan, 2011
#16: Feb 3rd 2013 at 9:04:38 PM

[up][up] When I was waiting tables, they'd split the dining room up into sections, and each waiter/ess would be responsible for that one section.

However, we didn't get tips because the restaurant stiffed us.

[up] I would like it if waitstaff got minimum wage, and didn't get taxed on the assumed 15% tip. I think it'd be a lot more fair.

edited 3rd Feb '13 9:05:14 PM by DrunkGirlfriend

"I don't know how I do it. I'm like the Mr. Bean of sex." -Drunkscriblerian
Barkey Since: Feb, 2010 Relationship Status: [TOP SECRET]
#17: Feb 3rd 2013 at 9:06:29 PM

The problem I get is the whole 18 percent thing, or tipping on small items.

Problem is, sometimes I really can't afford to tip, and I try to add something, because it's embarrassing to leave it blank.

^

I'd rather they just did it automatically or paid them fairly and reflected that in the price so I knew up-front what I was paying for. I mean I see the merit in tipping, it's a way to incentivize good service, but sometimes you just can't afford to, and that really screws over your server.

edited 3rd Feb '13 9:07:33 PM by Barkey

DrunkGirlfriend from Castle Geekhaven Since: Jan, 2011
#18: Feb 3rd 2013 at 9:08:05 PM

[up] Then don't eat out. Most people I know don't like getting taxed on money they don't actually get.

Also, I don't like the automatic gratuity thing, because that's how our restaurant stiffed us. They added a gratuity to the bill, but there's no guarantee that it goes to the staff. The place I worked for kept it, and we still got taxed for the hypothetical 15% that we never got.

edited 3rd Feb '13 9:09:34 PM by DrunkGirlfriend

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Kami4 By Jove, Oh, My Gods!! from United States Since: Mar, 2012
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#19: Feb 3rd 2013 at 9:10:56 PM

The inverse happens more often, getting the tips, but evading the taxes on them. 30% of all tips are estimated as evading taxes.

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DrunkGirlfriend from Castle Geekhaven Since: Jan, 2011
#20: Feb 3rd 2013 at 9:11:54 PM

[up] See, I don't know if I buy that. You're more likely to get tipped cash in bars and casinos, but everywhere else you're more likely to get stiffed on the tip.

"I don't know how I do it. I'm like the Mr. Bean of sex." -Drunkscriblerian
C0mraid from Here and there Since: Aug, 2010
#21: Feb 3rd 2013 at 9:12:21 PM

[up][up][up] I don't think that's fair. At one stage in my life I went with my Mother to a cheap restaraunt during the brief timeslot there was a deal on. The small meal and a drink was the treat for a fortnight. The waiter was great, but suprised when he got a small tip.

edited 3rd Feb '13 9:13:30 PM by C0mraid

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Zendervai Visiting from the Hoag Galaxy from St. Catharines Since: Oct, 2009 Relationship Status: Wishing you were here
Visiting from the Hoag Galaxy
#22: Feb 3rd 2013 at 9:12:45 PM

In my circle of friends, in Toronto, we usually tip somewhere around 15 percent. Unless the service is really bad, in which case, we don't tip at all. We went to a restaurant once and the waiter literally forgot about us and tried to kick us out for sneaking in after we'd waited for him to take our order for half-an-hour. The food was good, but we didn't leave a tip.

I don't know about leaving a tip for a hairdresser though. I tend to alternate where I get a haircut (the one I really like is kind of hard for me to get to normally) and I asked at both places about tips. The one place the lady said I didn't need to because the price goes towards the product used normally, and I just get a trim, so most of the money goes into the wage pool. At the other place, the guy actually said he gets paid a lot, (I won't say the actual amount) but a 20 percent tip was normal. He said this in the smarmiest voice you can imagine. He didn't get a tip, but that was because he went way overboard when it came to cutting my hair. Half the length does not mean a buzzcut done quickly enough to shame the Flash.

[up] I usually pay with debit, so I don't think they can evade taxes on my tips.

edited 3rd Feb '13 9:13:35 PM by Zendervai

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IraTheSquire Since: Apr, 2010
#23: Feb 3rd 2013 at 9:18:04 PM

When I was waiting tables, they'd split the dining room up into sections, and each waiter/ess would be responsible for that one section.

Hence why the tipping system makes sense in US. Here in Aus there's no "secton", no "these are the tables uniquely served by this waiter". Here the watiers all wander around the restaurant and gets called when ready. This is why I don't know the names of the people who served me, because service here is a group effort, and every waiter is responsible for every table as opposed to "that's not my table, thus none of my business".

However, we didn't get tips because the restaurant stiffed us.

You mean the restaurant took the tips instead of giving them to the waiters? That's... not how I thought it works.

edited 3rd Feb '13 9:18:13 PM by IraTheSquire

Nohbody "In distress", my ass. from Somewhere in Dixie Since: Jan, 2001 Relationship Status: Mu
"In distress", my ass.
#24: Feb 3rd 2013 at 9:19:22 PM

@C0m, post 10

Reduced tipping for poor service (humorous or otherwise) is far, far more common out in the real world.

Now, as someone who's done tipped jobs (pizza delivery driver... and no, it never resulted in the porn scenario, which is just as well given some of the slobs I had to deliver to tongue ), I kinda have mixed feelings about the practice.

On the one hand, the money was nice: even feeding a '95 Talon TSinote  on premium grade fuel I was still able to pull in a good bit of money, up to $100 on a good Friday night run or during a major sports event on TV (particularly the Superbowl, like what went on today), and even on a lousy week I could just about double the minimum wage ($5.35 at the time, IIRC) plus expenses income I had from the store itself.

On the other hand, I can understand (and even sympathize with, somewhat) the thought of "why should I have to pay you more to get good service like what your job is supposed to involve in the first place?", plus the whole issue of having to do math to figure out what's the appropriate tip for any given situation.

In the end, though, I can't say I worried too much about it. People wanted an optional service (delivery, in my case) and were willing to pay for it, and I was willing to provide it. All in all it worked out pretty well for me. tongue

[edit] (Note, however, that I did get paid the minimum wage by the store, and the tips were in addition to that. Not entirely the same scenario as for a waiter at a restaurant, but not completely independent either.)

edited 3rd Feb '13 9:23:55 PM by Nohbody

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Kami4 By Jove, Oh, My Gods!! from United States Since: Mar, 2012
By Jove, Oh, My Gods!!
#25: Feb 3rd 2013 at 9:26:59 PM

@Drunk Girlfriend: The IRS estimates closer to 40% of tips go unreported. Link here Here Too

Tips are considered income. Entire tip income is subject to same taxation like all earned income. The only exception is for months when tip income was below $20.[14] Waiters, on average, fail to report at least 40% of their tips according to the IRS.[15]

According both to Wikipedia and the IRS, not reporting tips one receives happens way more than reporting tips one didn't receive.

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