Skip the Tip?

A recent move by Sushi Yasuda, a high-end Japanese restaurant in New York, to ban tipping has prompted another round of discussion about whether tipping should be eliminated at restaurants and elsewhere.

Other restaurants prohibiting tipping include Thomas Keller’s Per Se in New York, French Laundry in Yountville, CA, Alice Waters’ Chez Panisse in Berkeley, CA, and Grant Achatz’s Alinea in Chicago.

One reason given for prohibiting tipping is that it ends diners’ chore over "grading" a server with each meal, the accompanying anxiety about under or over tipping, and then the math itself. Sushi Yasuda owner Scott Rosenberg, told Marketwatch, "The meal should be there for you to enjoy without doing this calculus."

The restaurant raised menu prices by roughly 15 percent to cover the servers’ lost tips. Many other restaurants are adding a service fee of 17 or 18 percent to each bill.

Ending tipping is also expected to lead to fairer pay, with front workers (servers) estimated to be paid two to four times as much as the cooks and other support staff. It would also help reduce improprieties at restaurants where servers share tips.

Finally, some believe service would improve. According to a study from Cornell University, customers generally pay the same amount of tip regardless of the experience, removing the incentive for servers to work hard for an extra tip.

In a recent article penned for Slate, Jay Porter, owner of the Linkery farm-to-table restaurant in San Diego that recently closed, said that he initially eliminated tips at his restaurant to support better pay for his cooks. But he found the food improved "probably because our cooks were being paid more and didn’t feel taken for granted," and servers’ overall pay increased as well as the restaurant did better.

Also, Mr. Porter believes servers benefit from a more reliable stream of income instead of being "constantly distracted by compensation issues." Like almost all other jobs, motivation should come from a desire to keep that job, earn a raise, be successful and taking pride in your work.

"If you don’t have to think about money, you can focus on doing your job well," he wrote.

BrainTrust

Discussion Questions

Should tipping in restaurants and other establishments be eliminated? Do you think they properly incentivize staff? Do you see tipping as a positive or negative part of the overall dining experience?

Poll

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Dr. Stephen Needel
Dr. Stephen Needel
10 years ago

None of the research discussed above is relevant to the issue, so let’s assume that we do not know whether incentivizing wait staff works or not. I think you take some of the motivation for doing a good job away, so there’s just the intrinsic satisfaction of doing a good job. If tipping is a negative experience for you, you shouldn’t go out to eat.

David Livingston
David Livingston
10 years ago

I think if I was a restaurant worker, this would be horrible. I know several people in the industry who make a decent living off of tips. Let’s get real. Servers for the most part massively under-report their tips for tax purposes saving them thousands of dollars in taxes. What other job can you make $60,000 to $80,000 a year and still get entitlements?

Going to a no tip program means getting a raise on paper that would cause financial hardship due to higher taxes and fewer entitlements. Some servers are so good they can far exceed on tips what any increase in salary could cover. I see this as benefiting the least compensated. I’ve been to no-tip countries and as a consumer, I prefer the tipping custom. As a rule I tip well at my regular places, the servers know it, and I get superb service, freebies, and personal attention.

Bob Phibbs
Bob Phibbs
10 years ago

The fact Mr. Porter’s restaurant closed does not make this sound like a compelling practice. A Google search found this, “Nearly one third of The Linkery’s reviews on Yelp mention the mandatory gratuity, with many saying it feels forced.”

Reward for a job well done is still a connection to a job well done. The fact stated that many people say they tip the same may mean more about the quality of service given in those restaurants—average—than what tips are traditionally thought of—as pay back for a great service.

I see a great dining experience as the goal; tips are just the chance to acknowledge it.

Ralph Jacobson
Ralph Jacobson
10 years ago

Restaurants have among the highest level of employee interaction with customers. Checking out at a grocery store doesn’t typically have the potential of variance of service levels by the individual employee. The lines at the grocer may be long, but if the employee scans my items, that’s about all that is required.

A server at a restaurant, however, has 100% of the consumer experience in their hands…filling up drinks more often, suggesting food items (BTW, whatever happened to suggestive selling at grocers?!), and therefore, they should be rewarded for their exemplary service levels when they deserve it.

Frank Riso
Frank Riso
10 years ago

Tipping is part of our culture and it would take time to get used to no tipping. For a large party of dinners, most restaurants include a tip and I like that for the same reasons Tom points out, no math. Split checks, separate checks, and shared checks would be easier. I think I would be most concerned with service levels and would prefer to see the wait staff paid better by including it all in the price of the product. Tipping may not go away; again we have been raised to tip. I even tip the trash collectors once a year!

Joan Treistman
Joan Treistman
10 years ago

Restaurant staff knows there are good places, awful places, and some great places to work. Tipping and salary are aspects of the job to contemplate when looking for and accepting a position. While it would be wonderful to expect staff to be fairly and well treated when there is a no tipping policy, I doubt that can be relied upon. From a customer’s perspective, I would prefer not to tip. At the same time, I realize that restaurant staff, for the most part, are not highly paid and I want to acknowledge and reward good service when I receive it.

Not every level of restaurant encourages excellent service. If that were the case, the no tipping approach would work for customers and staff.

Shep Hyken
Shep Hyken
10 years ago

Tipping for good/great service (and not so great at times) has been part of our culture. Interesting concept to eliminate it. Here is my take on eliminating the tip.

Go to a private club and have a dinner. No tipping allowed. The servers don’t expect it. They are well paid. And in many of these clubs, they are long term employees, which tells me they are happy with their job and the compensation.

Show me a restaurant that has amazing service and decent food and I’ll bet there is a line to get in. Moderate priced or expensive, there will still be a line. Build the gratuity into the price and you bump up the prices by 15-20%. I believe that the restaurant that delivers on the service and food quality will still have a line.

Marc Funaro
Marc Funaro
10 years ago

I have to laugh at all the people having trouble calculating tips. Really? Is it that hard, when the “standard” as I’ve been told is to add 10,15, or 20%?

Move the decimal for 10, and then add half or double it to get your tip amount. I can usually do it in, oh, 10 seconds. Takes me longer to get the receipt at the right distance from my aging eyes, or decipher the poor handwriting of the overworked server at the local diner.

As for whether or not to abolish tipping… part of me says “include it in the price and then make me demand it be lowered or removed if I get poor service… and let the servers pay taxes on their income like the rest of us” while the other part of me says “this is really no big deal… don’t fix what isn’t broken.”

I think the answer might lie in the quality of the restaurant… super-high-end gourmet restaurants could probably get away with just adding the service charge, because I have really never had poor service in someplace like The London… it’s just so rare. On the flip side, there’s no way your local greasy spoon is going to get rid of tipping.

Janet Dorenkott
Janet Dorenkott
10 years ago

I agree with David, Bob and Ralph. Mr. Porter may have owned a restaurant, but it closed and my guess is he was never a waiter.

Cornell’s study that says “some believe service would improve” is not proof that service would improve. In fact, removing incentive impacts services negatively in any business. Should I pay my programmers less so I can pay my secretary more? No. If my secretary deserves more, she will get more based on her own productivity.

The Cornell study also says customers “generally pay the same amount of tip regardless of the experience.” That couldn’t be more incorrect. He should have stopped the sentenced half way through and said “customers generally pay the same amount of tip.” The experience does matter and it matters to everyone.

I was a server for 10 years through high school and college and always brought home more than the servers who were grumpy or who failed to check on their customers. I consider myself a very good tipper, but I WILL go beyond the normal tip for exceptional service. I know how hard the job is and I enjoy rewarding good service.

I’ve been to country clubs where tips are not allowed and I understand that because the members already pay high dues, but I still like to slip a tip to the valet who greets me with a smile or waitress who is swamped with too many tables or the bartender who tells funny stories. It’s part of the experience and by the way, Scott Rosenberg, to anyone eating at your high-end restaurant, 15-20% is not hard to calculate.

Zel Bianco
Zel Bianco
10 years ago

This is interesting because in theory it makes sense, but in a service-oriented position, if someone wants to pay more or less for their service, they should possibly have the right. If a server has exemplary service and their tips routinely show it, should they be compensated the same as someone who isn’t putting in their best effort?

For me personally, tipping is not a negative or positive, it just is part of the dining experience. It has been so ingrained in our culture it’s almost difficult to imagine it not being there, especially in the restaurant setting. It definitely makes it easier for patrons to just enjoy the food. I’d be interested how restaurant service workers in other countries that do not tip feel in comparison to Americans.

Tony Orlando
Tony Orlando
10 years ago

Tipping is fine, and should be based on the level of service and the customer choice of what they will tip. What I do not like is the mandatory 18% gratuity for parties of 6 or more. Many times we get questionable service, and since the waiter knows they are guaranteed a good tip, the service is mediocre at best. This is not always the case, because great service from an individual waiter is consistent no matter the size of the party.

Give me great food and great service, and I’ll tip well, and keep coming back.

Pradip V. Mehta, P.E.
Pradip V. Mehta, P.E.
10 years ago

Tipping should simply be eliminated. Those who have traveled to Japan and Korea know that there is no tipping in those countries. As a matter of fact, in some establishments frequented by westerners, the service staff wear a tag that reads “No tipping please. Service is our pride.”

Susanne Conrad
Susanne Conrad
10 years ago

Okay, here’s the thing: everyone acts in a way that is most beneficial to themselves. So, if we look at it from that perspective:

Diners:

  • Would they prefer not to tip in addition to the cost of their meal? Sure—it’s easier
  • Would they be willing to pay a higher price for their meal to forgo tipping? I think that depends on a number of factors (type of restaurant, financial considerations, etc.). I’d say, the jury’s still out.
  • Would they prefer to “pay/reward” their server based on the server based on the quality of service actually received vs. an arbitrary amount determined by the restaurant? I think so. Why be required to pay a full tip for poor service and not be able to reward a server who performs above and beyond?
  • Is it too difficult to calculate tips? Debatable – for many the answer is “no, it’s just basic math/there are apps for that/etc.” For many the answer is “Move a decimal what and then do what?” But, we’ve all been doing it (easily or not) for a long time.

Servers:

  • Would they prefer a standard tip (whatever that % would be) to the current diner-determined tip? I believe those who “underperform” and are tipped less would say, “yes” while those who perform well and are tipped more would say, “no”. Seems kind of obvious, doesn’t it?
  • Would they prefer to be in a situation where they would have no wiggle-room in reporting income for taxes? Of course not.
  • Will the no-tip situation improve or reduce the service they provide? Ah, here’s the age-old debate! My personal opinion is that the incentive of personal gain (in this case higher tips) rest solely on our ability to influence, reap and personally benefit from those efforts (better service). There will always be individuals who perform at peak out of personal satisfaction/pride. But for how long if they are not rewarded for it? No, if their pay is adjusted upward vs. others rather than relying on tipping being that incentive … hmm, that could work as well. The issue is how to gauge and who gauges that better service? Currently the recipient of the service (the customer) does that. If wage-driven, that will likely become the server’s manager.

Restaurant Owners:

  • Will no-tipping bring in more or fewer diners? Unclear
  • Will it reduce costs? Frankly, I don’t know enough about the business to speculate. Anyone else know more?

What am I missing?

Craig Sundstrom
Craig Sundstrom
10 years ago

So the owners have freed us from the “chore” of deciding whether/not to leave an extra 15% by mandating it (in fact 17-18%): how thoughtful…not!! Every one of the rationalizations offered was claptrap: if the line staff makes relatively too little, then give them a raise; if the incentives for good service are too little, then why not strengthen them, rather than remove them altogether ?
That having been said, it’s true that tipping has become far removed from its origins – as a bribe for extraordinary service – so this seem to be a confirmation of our expectations for diminished service…egalitarianism run amok.

Cathy Hotka
Cathy Hotka
10 years ago

The restaurant business is low-margin, but the pay for restaurant workers is absurd. My college-age son was hired by a national chain of fine dining restaurants two years ago; there were going to pay him less than $2 an hour, and told him to purchase his own uniform. When they told him to purchase a candle lighter too I stepped in and insisted he get another job.

I don’t know what the answer is.

Steve Montgomery
Steve Montgomery
10 years ago

No, I like the ability to determine how much to tip based on the service received. Tipping may or may not incent the staff depending on how tipping is handled at the particular restaurant.

I know it works when I go back to the same restaurant and I’m waited on by someone who provided excellent service and got the appropriate tip.

Fernando Roa
Fernando Roa
10 years ago

Hmmm….good food and good service, leave a tip. Good food and bad service, no tip. Bad food and bad service—no come back.