Is Tipping A Broken Business Model

bleeding heart · May 11, 2014

Wrong. Sometimes the kitchen staff does indeed share in the pooled tips.

I was there...I benefited from it.

cybercoma · May 11, 2014

Only tips actually made - it would be exploitative to require "sharing" more than the tips taken in.

It may be more on an individual cheque, but not likely more than the waiter made for the whole shift. It happens.

And here's an article on it, since you and Bryan think it doesn't happen.

http://www.vancouverobserver.com/food/restaurants/where-money-actually-goes-when-you-leave-tip

TimG · May 11, 2014

It may be more on an individual cheque, but not likely more than the waiter made for the whole shift. It happens.

I did not say it does not happen. I said it is exploitative - the article linked gave an example of why with German tourists.

cybercoma · May 11, 2014

I agree with you. I don't think we should be tipping at all. Restaurants should just pay wait staff (and kitchen staff, and bus staff, etc) a proper wage, instead of relying on customers to supplement the restaurant's expenses.

Edited May 11, 2014 by cybercoma

TimG · May 11, 2014

I don't think we should be tipping at all.

I agree too - I was just pointing out the need to connect wages to performance and tips are one way to do that but restaurants that see tips as a source of revenue to compensate other employees completely undermine that principle. Edited May 11, 2014 by TimG

cybercoma · May 11, 2014

The other problem, as I said, is that tips are not a very good indicator of performance. It might be A way to connect wages to performance, but it's not a very good one.

WestCoastRunner · May 11, 2014

The other problem, as I said, is that tips are not a very good indicator of performance. It might be A way to connect wages to performance, but it's not a very good one.

I agree that tips are not a good indicator of performance. Sometimes, it depends on their looks, the size of the bill, the kind of mood you are in. Regardless of the service, if I receive superior service or just ok service, I will always tip 15% just because I know they are making minimum wage. If I can afford to eat out at the restaurant, I can afford to tip.

And absolutely, these tips get shared with the kitchen and other staff, but that's ok. I expect that and they should be shared.

If tips are eliminated and wages increased, I think it will also improve service. Servers will know longer try and push expensive items on the menu in order to receive a larger tip.

Of interest, a survey was done by mobile payment company Square, to determine the size of tips across Canada. Here are some findings:

Ottawa is the most generous, tipping 76% of the time with a tip of 15.6% of the bill.

Montreal tips 70% of the time at 14.4%.

Calgary tips less than 60% at 13.3%.

Vancouver tips 62% 13.4%

And those who live in the centre of the universe, Torontonians tip 65% of the time at 14.5%.

WWWTT · May 11, 2014

A restauranteur is opening a restaurant on Vancouver Island in June and is doing away with tips. This will be the first restaurant to use this business model. Instead of tips, he will be raising wages for servers and cooks between $16 and $24, provide benefits. He will raise menu prices by 18% to cover this cost.

I was listening to a program on CBC radio a few weeks back and a restaurant owner said that if she did this, she would go out of business. Servers also may not like giving up upwards of a few hundred dollars in tips on any busy evening.

However, this business model makes sense to me. If someone is eating at a restaurant, and they reward their servers with 15% to 20% tip, they can afford the 18% increase in menu items. It also provides more financial security for staff with most likely less turnover. And for those stingy patrons who refuse to tip, this will take care of that problem.

Some say that this guy is ahead of his time. Let's hope this model works for many reasons.

In mainland China restaurants do not accept tips!

WWWTT

WestCoastRunner · May 12, 2014

In mainland China restaurants do not accept tips!

WWWTT

Interesting. How are wages?

Bryan · May 12, 2014

It may be more on an individual cheque, but not likely more than the waiter made for the whole shift. It happens.

And here's an article on it, since you and Bryan think it doesn't happen.

http://www.vancouverobserver.com/food/restaurants/where-money-actually-goes-when-you-leave-tip

I'm well aware that It happens. It's still illegal.

The article is pretty goofy with respect to saying that servers are not well paid though. I know a couple of people who quit well-paying professional jobs because the tips they got at Olive Garden were far more than they made in the office.

cybercoma · May 12, 2014

ffs, Bryan, show me the laws in each province making it illegal. Show me court cases where restaurant owners lost for having staff "tip out". Do anything to support your claims for once.

Edited May 12, 2014 by cybercoma

Wilber · May 12, 2014

In mainland China restaurants do not accept tips!

WWWTT

Not done in Japan either. Not a common practice in Australia as well.

WWWTT · May 12, 2014

Interesting. How are wages?

Not sure how they are in relation to other sectors.

WWWTT

WWWTT · May 12, 2014

Not done in Japan either. Not a common practice in Australia as well.

Very different in Bangkok and Thailand!

There they demand a tip!

WWWTT

Bryan · May 12, 2014

ffs, Bryan, show me the laws in each province making it illegal. Show me court cases where restaurant owners lost for having staff "tip out". Do anything to support your claims for once.

TimG already addressed this. It's got nothing to do with provincial employment statutes. It's your constitutional right not to be exploited. A private company cannot compel a private citizen to pay for something they did not receive.

Besides that, in your example of a worker paying a set amount regardless of tips taken in raises another issue. Even where that does happen, it's still not the customers' fault or problem. A tip is an optional gift for good service. It can be withheld if the service doesn't warrant it, it can also be much higher than usual if the service is exemplary. It's not a top-up of the servers' fixed expenses.

cybercoma · May 12, 2014

So no. You don't have anything to show it's illegal? No statutes? No case law? Are you going to now step back and say it's unethical but not illegal? Or will you double down on your legality angle? Restaurants can and do force servers to tip out and it's not illegal. Ontario was talking about making it illegal a few years ago but that died. Wait staff depend on others for their service. Tipping out is a product of that, you might not like it, but it's a fact. So, as I said, when you tip your server 10%, they might be getting less than half of that.

Boges · May 12, 2014

In the UK they don't encourage tipping. But they also include Value Added Taxes in the price. So you pay what you pay! I do like that model but am unsure what the price paid at a restaurant in Europe is a fair wage.

I anticipate some waiters prefer a tipping model. Especially if you work for a high-end restaurants. You work just as hard at Swiss Chalet as you do at a Keg. (sans the occasional opening of a bottle of wine) But 15% of a $100 bill is much better than for a $50 one.

I always hate tipping at a buffet restaurant. You're taking an order for drinks and take plates away. Is that really worth 15%? And what about those high-end cafe's that have wait staff serving coffee?

Call me cheap but I look at the 13% VAT I'm paying on my bill and I round up depending on how I approved of the service of said waiter. That's my tactic anyway.

Edited May 12, 2014 by Boges

PIK · May 12, 2014

I always tip,especially if you use a certain place all the time.And I tip on the service, poor sevice poor tip.

MiddleClassCentrist · May 12, 2014

They are only going to attract lousy servers who don't make decent tips for a reason. Good servers make a lot more than that at a busy restaurant.

That's actually not true.

It's been shown time and time again that wait staff EXPECT tips.

Service at locations without tipping is the same as service with tipping. If a costumer doesn't tip, the waitstaff just blame the customer for being cheap and don't reflect on their own performance.

Boges · May 12, 2014

That's actually not true.

It's been shown time and time again that wait staff EXPECT tips.

Service at locations without tipping is the same as service with tipping. If a costumer doesn't tip, the waitstaff just blame the customer for being cheap and don't reflect on their own performance.

Perhaps you have a study to back that up but that's not how I see tipping.

I'll give a tip even if I don't have a great experience. Largely it isn't even the waiter's fault. If there is a problem with the waitstaff, generally you make a big deal about it. Like, say they forget to submit your order or bring you the wrong food. I'm looking for a manager to complain too. The tip isn't something they should even worry about.

They'll know if I'm unhappy with their service. On the other hand I will tip more if the waitstaff is exceptional.

Wilber · May 12, 2014

TimG already addressed this. It's got nothing to do with provincial employment statutes. It's your constitutional right not to be exploited. A private company cannot compel a private citizen to pay for something they did not receive.

Besides that, in your example of a worker paying a set amount regardless of tips taken in raises another issue. Even where that does happen, it's still not the customers' fault or problem. A tip is an optional gift for good service. It can be withheld if the service doesn't warrant it, it can also be much higher than usual if the service is exemplary. It's not a top-up of the servers' fixed expenses.

The reality in North America is that it is often used as a top-up of the servers fixed expenses. In BC the minimum wage for liquor servers is lower than the regular minimum. In Florida the regular minimum wage is $7.93. For tipped workers it is only $4.91. Other jurisdictions have similar laws

Boges · May 12, 2014

For some establishments, tipping is the primary income. It's sort of like being on commission, you have a base salary and you can make an unlimited amount beyond that. No so in an establishment that bans tipping.

In reality the people that have issues with tipping work in an establishment where cost is more of a factor. Meaning if the prices were raised in order to remove the need for tips, the typical clientele for a place like that might not go.

Edited May 12, 2014 by Boges

cybercoma · May 12, 2014

I always hate tipping at a buffet restaurant. You're taking an order for drinks and take plates away. Is that really worth 15%? And what about those high-end cafe's that have wait staff serving coffee?

I don't think you tip at buffets. You're not being served. You should tip at a café if a barista is crafting a drink, rather than just pouring a cup of coffee. In NB, people tip at Tim Horton's. That I don't understand. It's seriously customary here. Almost everyone does it. I don't get it.

Boges · May 12, 2014

Tipping at Starbucks is ridiculous too. I'm paying $5 for that frothy milk and espresso!

The worst is tipping options when I pick up my own Pizza.

I do tip when I go to a buffet restaurant but never give $15. Mostly it's for a brunch where they've gotta be pretty attentive re-filling coffee mugs.

cybercoma · May 12, 2014

Here's what I don't get, in my city, many of the pizza joints use a local delivery service. That delivery service charges customers roughly $7 for delivery. If I'm ordering a $20 pizza and paying a 35% delivery charge, do I still tip the driver? I usually give them about $3 to round it out, but we're talking $10 for delivery between the fee + tip. Needless to say, I only ever have things delivered when we've got people over and don't want to go out. I always pick things up otherwise.

edit to add: That $7 fee goes to the delivery company, not the driver directly.

Edited May 12, 2014 by cybercoma