Tuesday, November 1, 2011

Should Restaurant Tips Be 25 Percent?

- What is a fair tip to leave for good service at a sit-down restaurant? 

The Contra Costa Times recently interviewed several restaurant workers who said 25 percent should be the standard tip. Does that sound like tipping expectations are getting out of control?

For most diners today, the usual tip is between 15% and 20%. Some people feel that tipping should not be expected. But in Utah, servers earn just $2.13 per hour and depend on tips for the majority of their income. 

I've visited countries in Europe where a gratuity was automatically included in the bill. And I've visited Australia where tipping was not expected; our taxi driver even seemed put off when my husband tried to give him a few dollars for extra help with our bags.

Having seen those systems, if it were up to me, I would abolish the "expected" tip. I  would have restaurants pay at least minimum wage to their servers, and calculate that into the price of their menu items. A tip wouldn't be necessary, but a small one could be left as a little reward for exceptional service. Restaurants say the price of the food would go up; but you are already paying for it anyway with your tip. 

Here are a couple of reasons why I don't think our tipping system is very fair:

-The $5 or $10 you leave may seem like a lot; but it's usually shared with the table busers, bar service and other help. 
- A tip is supposed to insure good service. But in many restaurants, the servers pool their tips and then divide them evenly. 
- Sometimes the amount of the bill doesn't reflect the level of service you received. For instance, what about those soup & salad lunches Olive Garden? Your server refilled your soup and salad bowls and water glass several times, and brought you out several batches of breadsticks. He had to work a lot harder for you than he did the folks at the next table who ordered drinks and large entrees; but their bill was a lot higher so they tipped a lot more.
- Or what if you use a coupon or two-for-one special?  You and your spouse may have gotten two entrees for the price of one, but your server is still serving two meals, filling two drink glasses, and so on. 
- Pizza delivery is another tipping land mine. Drivers tell me that they only receive part of the delivery charge that some companies tack on, and some companies pay below minimum wage with the expectation that they will get tips. So they, too, depend on tips.  

The current tipping system isn't going away anytime soon. So if you're going out to eat, you should mentally budget a tip into the menu prices of the restaurant. Too often, people overspend when they order, are faced with sticker shock when the bill comes, and skimp on the tip to make up for it. 

If you feel you can't afford to pay that extra 15-20 percent, my advice is to eat at quick serve restaurants where employees make at least minimum wage and tips aren't expected. You can choose from a wide variety — soup and salads at Cafe Zupa's, Mexican at Costa Vida, Cafe Rio or Chipotle, Italian at Fazoli's. Even fast food restaurants offer a wide menu selection nowadays.  But, DON'T to go a full-service restaurant and stiff the wait staff. Even if your service was lousy, tip at least 10 percent. That tip isn't just icing on the cake, it's the wait staff's bread and butter.  


Kari Morandi said...

Val, IRS rules are the restaurant employee has to report all their tips and then goes on to say those tips should equal, at a minimum, 8% of the receipts (not including carry-out and bills with gratuities already included.

We tip 15% unless we have exceptional service, which is usually at the high-end restaurants (except for a terrific waitress we had at a Village Inn the other day, she was great). And then we rarely go over 20%. We must be one of the rare people, though, we always tip on the full price of the meal -- what it would have been before coupons, 2-for-1, etc., because we're never sure how the restaurant figures out the receipts (some take them off after the total and then report the total in sales -- which might work for the corporate office, but which cheats the server out of tips). And if some people get a little more, so what, it's the cost of eating out.

I agree with you, however, that I'd like to see tipping abolished. But I doubt if most restaurants would survive paying all their employees $7.25-$10 an hour (especially with Eat-a-Burger, McDonald's, etc. pay $10/hr.). Now, at least, some servers have the potential to make much more money with tips than with salaries.

Valerie Phillips said...

Kari, thanks for clarifying the tax rules for tips! You are right, the wait staff has the potential to earn a lot more than a set wage, depending on the clientele. But it seems that the old-fashioned idea of a "tip" based on good service has lost its meaning under the current system. Now it is really an obligation, and it is becoming a bigger percentage of the bill.