Tipping A Flat Percentage: An Impractical Practice

To Tip Or Not To Tip?

Several events this week really made me reevaluate how we should approach tipping servers in America.  In truth I’m frugal and generous to certain extents.  For the most part my spending habits have been on many frivolous things that I have ended up donating.

For just myself, my average tip at a place is 20% if the service was decent.  It’s just a social norm living in Los Angeles.  On top of that tax is about 10%.  Together, just add 30% to whatever the face cost you see on the menu.  The social “memory” of why we tip is because servers don’t make enough and that’s a part of gratuity.  Gratuity because you are grateful for the great service.  I think that fact has escaped most people and it has been ingrained as a habit when dining out.  This used to be my average way of thinking.

A little about myself, I have traveled to many cities around the world.  Tipping is only customary in the United States:

  • I’ve seen places in Hong Kong that add a 10% service charge for the bill.  In addition to that charge if you pay cash, you just leave whatever coins came back with the bill.
  • In Chile, servers would ask before you got the check if they can add the tip/service charge of 10%.
  • Throughout Europe and Asia there’s no tip.  You pay for what you ordered.  End of transaction.
  • When the provided service is extraordinary I will try to leave a big tip depending if it’s socially acceptable in that country
Receipt from the Venetian Casino in Macau.  The price is in HKD.
Receipt from the Venetian Casino in Macau. The price is in HKD.

Here are 3 events that I experienced this week that show why the average 20% is unreasonable depending on the situation:

Event #1

  • Restaurant: Salsa & Beer
  • Location: North Hollywood
  • Order:
    • Spicy Green Burrito
    • Modelo Especial Draft
  • Price: $13
  • Tip: $4 = 31%
  • Summary: It’s always busy there but the servers are fast, hard workers, provide the best tasting Mexican food, attentive and multi-tasking masters.  I ordered the Spicy Green Burrito and a Modelo Especial draft beer.  The beer was instant and the burrito showed up within 10 minutes.  It was 7pm on a Wednesday and the place was packed with a line out the door.  It was impressive that they got me my food quickly, at the highest quality and with a friendly attitude.

Event #2

  • Restaurant: Boardner’s
  • Location: Hollywood
  • Order:
    • Chimay Blue (bottled beer)
    • Stella Artois (bottled beer)
  • Price: $11
  • Tip: None
  •  Summary:
    • Went here for the first time on a Thursday night ($4 off all drinks night) and it wasn’t too busy.  Plenty of room at the bar.  I went to the bar to order a drink. The bartender helped 2 different people before me and then took some notes.  After 5 minutes of standing there and watching him jot something down, I try to get his attention even though I know he knows I’m standing there. He gives me a surly “wait one second” pose.  He eventually finished and then took my order.  I ordered two BOTTLED beers.  $11.  I give him $11 exactly because I am not rewarding awful service with a gratuity.

Event #3

  • Restaurant: Mud Hen Tavern
  • Location: Hollywood
  • Group Size: 7 people
  •  Order:
    • 2-3 drinks per person.  A mixtures of cocktails, beer and one round of shots.
    • 2-3 tapas per person.
  • Price: $500
  • Tip: $80 = 16%
  • Summary:
    • A group of 7 of us went out for a friend’s birthday.  The place was a simple gastropub.  One page menu of food and one page of drinks.  Small portions and high prices.  People were raving about the food but I thought it was okay.  For the price and the hype, I found it very overrated.  I’ve had better.  The service I found to be average.  The group was initially going to go with the 20% tip and I found that unreasonable. Explained below.

Let’s break down Event #3.

We were at Mud Hen Tavern for 2 hours.  The waitress came by every 20 minutes to take order, drop-off food/drinks, to check in and finally to deliver the check.  Over that 2 hours let’s say she stopped by a total of 6 times.  If the tip was 20% (overpriced food and drinks) that tip would have to be $100.  We would essentially be paying her $50/hour. Of course that tip also includes the kitchen and bar, so let’s say that’s 3 people.  That’s almost paying the staff $17/hour for being there.  On top of their own wages plus the tips they’re getting from other potential people they could easily be making more than the people eating there.  On top of that, the likelihood of people claiming ALL their tip income is very low.  Now if you take away how much any of the food cost and only consider the following:

  • Quality of the food/drinks: Adequate
  • Attentiveness/friendliness of the waitstaff: Adequate
  • Dinner duration: 2 hours

The food and drinks weren’t outstanding.  I did not enjoy the first beer I chose on draft so I selected another.  Now if you generated a number based on the above factors.  I’d say a tip of $35 would be adequate.  A tip is really what you feel is adequate compensation for services rendered.  It’s not a flat rate.


 

Let’s say you go to a restaurant and ONLY order one bottle of wine:

  • Example A: The wine costs $30.  They bring out the wine and pour you a glass.  With the 20% tip you’re looking at $6
  • Example B: The wine costs $1000.  They bring out the wine and pour you a glass.  With the 20% tip you’re looking at $200

In both situations, the exact same amount of service was provided at drastically different costs.  The quality of the service is the constant. The cost of the purchased items should not directly correlate with the tip amount.  My belief is that you are tipping for the service, ambiance, and overall quality of the experience.


 

In general, I think tipping for a bottled beer is unnecessary unless the service is extraordinary.  As in, you get to the bar and they give you the beer you want with very minimal wait time.  It should not be held up to the same standard as a cocktail that requires actual work.  If you only purchased a bag of chips at a bar, would you tip?  It’s a prepackaged food much like bottled beer.  The only real service is the time they take to get it to you.  If you believe you should tip for this, you should tip fast food workers at McDonald’s. They are drastically underpaid and work significantly harder than handing you a beer.

I would prefer to provide gratuity at a more reasonable level especially for people who deserve it.  I tip/donate $1-2 at the following places:

  • Subway sandwich shops
  • Other fast food places that have a tip jar
  • Taco trucks included
  • Sometimes the gourmet food trucks if they’re good.  Some overcharge already.

Other questions to consider:

  • Just because there’s no line on the bill that has a “tip” option, will you tip?
  • When you order food to go, do you tip?
  • When you see a homeless person do you help them with a few dollars?  Or if you’re walking by and happen to have leftovers, do you give them your leftovers?
  • Are you considering what the true meaning of the gratuity (or tip) really means? Or are you giving a flat percentage each time?
  • Are you considering how much work and effort went into your request and how much more of a service is being provided?

Gratuity should be proportionate to the service.  The cost should only play a small factor.  At all times, gratuity is optional and should be something that is earned.  I’m tired of being pressured to tip for lousy service.  I know it’s my choice to go to certain places and to tip.  I will exercise that choice.

2 thoughts on “Tipping A Flat Percentage: An Impractical Practice

  1. The way I think about it is: for any experience with tipping, those who tip above average subsidize the experience of those who tip below average. It pretty much balances out for the workers. So I try to generally tip what I think is average. I try not to let my perception of service quality influence my tip, because the research suggests that variance in tips has more to do with the race/age/gender of the server than of service quality. I’m not 100% confident in my ability to distinguish service quality from these characteristics, and don’t want to perpetuate the bias inherent in the tipping system.

    Of course I think it would be much better to emulate Europe and Asia instead, and do away with tipping. So whenever possible, I go to one of the 160+ places in the US that have replaced tipping with service charges or higher prices, listed at http://bit.ly/tip-free-restaurants.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s