"Tipflation" in the USA

[Çnote]

I'm willing to bet I'm the only FoH member that is a USA tipped employee.

I'd rather roll the dice for 20%+ than accept an hourly for working a fine dining service. I'm regularly greeted with a 'presidential' handshake. Those savvy people get an exceptional level of service.

22 hours ago, Sir Diggamus said:

I have heard of a few studies that show when people pay digitally they spend more, so I think it is possible that these newer kiosk POS systems are building tipping into software and selling it as an additional revenue option for businesses that never received tips before. 

The selling point of most of the hardware/software systems is little to no upfront costs. Toast is king for small venues right now. They do all the CC processing and lease/sell/give you all the hardware for cash registers, compris, order taking and tracking. Kitchen screens, POS terminals, all of it. The post-payment screens are templates. They're easy to remove, but it just adds the opportunity to tip as you see fit for exceptional service as we drift into cashlessness. Is it abused? Absolutely. Do I tip for cigars when I buy boxes? No. Do I tip when I buy 2 sticks and the humidor assistant offers cut & light and a pour of house whiskey? You betcha.

9 hours ago, joeypots said:

Minimum wage for tipped workers in the USA is $6.75/hour.

Minimum wage for tipped employees is set by the state, it's $2.13 in TX.

On 9/25/2023 at 5:23 AM, TacoSauce said:

While some servers might technically be paid $2/hr before tips, in reality, they are guaranteed by law to be paid the minimum wage. So if they receive low or no tips for their shift, their employer has to make up the shortfall and pay them the full minimum wage. 

To be annoyingly precise, $/hr is calculated by the week (at least in TX), so it takes a couple of really bad shifts to have the venue pay true minimum wage to a server. Also, many servers are also paid minimum for hours doing setup, breakdown, and cleaning.

Details you may not know, most venues have 'tipout' where a % of sales is diverted to other tipped employees for support, eg bartenders and bussers. It's pretty normal to payout  an estimated 20% of your take (4% of sales) for full support, so, say you have a $200 table that decides $10 is a satisfactory tip? You owe $8 to support, the table wasted your time and took up room in your section. Maybe the bill was higher than expected and they're on a budget. Maybe they don't believe in tipping like Mr Pink. Maybe they don't understand the system. None of that matters, service is effectively commission sales without a guarantee.

Frankly, I'm a little appalled by some of the comments here. D4s are ~$20 a pop. Basic CC and Nudies are $200 a unit. If you're smoking Cohibas, you can afford to tip a server. The dollar difference between 15% and 20% for a nice dinner for two is usually a cigar, maybe two.

 

[TacoSauce]

1 hour ago, joeypots said:

Minimum wage for tipped workers in the USA is $6.75/hour.

Where is the $6.75 value coming from? The current US federal information I see is $7.25. Also using the federal rate is a bit misleading since approximately 60% of states have a higher minimum wage level that takes precedence over the federal value. See here: https://www.dol.gov/agencies/whd/state/minimum-wage/tipped

I don't take issue with the points being raised, but I think there is value in providing full context on the issues being discussed.

[joeypots]

1 hour ago, TacoSauce said:

Where is the $6.75 value coming from? The current US federal information I see is $7.25. Also using the federal rate is a bit misleading since approximately 60% of states have a higher minimum wage level that takes precedence over the federal value. See here: https://www.dol.gov/agencies/whd/state/minimum-wage/tipped

I don't take issue with the points being raised, but I think there is value in providing full context on the issues being discussed.

Quote

 

What is the federal minimum wage for tipped people?

$2.13 per hour

Tipped employees must receive a minimum wage of $2.13 per hour, known as a cash wage. That cash wage is combined with tips to reach the federal minimum wage of $7.25 per hour. (Many states and localities, listed below, have minimum wages set above the federal rate). Sept 23

So above is just a quick google search. I’m not going to dispute anything about US tax policy.  And it’s federal. in my state it looks as if taped employees that don’t make combined tips and salary of $15 the employer has to make it up. Like I said, I’m not a tip jar advocate and dislike the spread of tip culture But, servers, bartenders, and support staff in a full service restaurant who only get what often amounts to nothing from the employer to one should tip. It’s a lot different now, we used to get a lot of cash tips. CC tips were more than half and were declared. The hourly wage was mostly eaten up by taxes on reported tips. No wa lot of places pool tips and rip off the staff whenever they can. The restaurant business can be brutal.

[SCgarman]

2 hours ago, Çnote said:

I'm willing to bet I'm the only FoH member that is a USA tipped employee.

I'd rather roll the dice for 20%+ than accept an hourly for working a fine dining service. I'm regularly greeted with a 'presidential' handshake. Those savvy people get an exceptional level of service.

The selling point of most of the hardware/software systems is little to no upfront costs. Toast is king for small venues right now. They do all the CC processing and lease/sell/give you all the hardware for cash registers, compris, order taking and tracking. Kitchen screens, POS terminals, all of it. The post-payment screens are templates. They're easy to remove, but it just adds the opportunity to tip as you see fit for exceptional service as we drift into cashlessness. Is it abused? Absolutely. Do I tip for cigars when I buy boxes? No. Do I tip when I buy 2 sticks and the humidor assistant offers cut & light and a pour of house whiskey? You betcha.

Minimum wage for tipped employees is set by the state, it's $2.13 in TX.

To be annoying precise, $/hr is calculated by the week (at least in TX), so it takes a couple of really bad shifts to have the venue pay true minimum wage to a server. Also, many servers are also paid minimum for hours doing setup, breakdown, and cleaning.

Details you may not know, most venues have 'tipout' where a % of sales is diverted to other tipped employees for support, eg bartenders and bussers. It's pretty normal to payout  an estimated 20% of your take (4% of sales) for full support, so, say you have a $200 table that decides $10 is a satisfactory tip? You owe $8 to support, the table wasted your time and took up room in your section. Maybe the bill was higher than expected and they're on a budget. Maybe they don't believe in tipping like Mr Pink. Maybe they don't understand the system. None of that matters, service is effectively commission sales without a guarantee.

Frankly, I'm a little appalled by some of the comments here. D4s are ~$20 a pop. Basic CC and Nudies are $200 a unit. If you're smoking Cohibas, you can afford to tip a server. The dollar difference between 15% and 20% for a nice dinner for two is usually a cigar, maybe two.

 

LOL. Basic CC's are $200/box? Show me a $200 box of Monte 4 please. 

[Hammer Smokin']

We started to see a movement of "no tip" restaurants here in Hamilton. Four of them at one time. They charged about 15%-20% more than their competitors. 

The restaurants worked, and were busy. 

However, they could not get workers. 

Our servers min wage is a hair under $15/h in Ontario. These establishments were offering $20+/h to the "no tip" workers. Clearly an extra four dollars an hour wasn't enough to walk away from tipping. 

The idea of a $2.00 +/- minimum wage is .... well, insane. Especially in the state of Texas. 

[Bijan]

5 hours ago, Çnote said:

I'm willing to bet I'm the only FoH member that is a USA tipped employee.

I'd rather roll the dice for 20%+ than accept an hourly for working a fine dining service. I'm regularly greeted with a 'presidential' handshake. Those savvy people get an exceptional level of service.

No offence to you as this is your livelihood. But having to stuff cash into someone's hand for good service, which I am already paying good money for, is what is in the end wrong with tipping.

This would be like sending CC vendors cash on the side to secure better boxes and premium service.

 

5 hours ago, Çnote said:

Frankly, I'm a little appalled by some of the comments here. D4s are ~$20 a pop. Basic CC and Nudies are $200 a unit. If you're smoking Cohibas, you can afford to tip a server. The dollar difference between 15% and 20% for a nice dinner for two is usually a cigar, maybe two.

I tip 15% for lousy service. Maybe 10% if it's horrible. 18-20% generally. Maybe 25% for something exceptional. Honestly I'd rather pay a flat 30% and not have to deal with the stress, and get a professional level of service, no matter how the server assumes I will tip, based on my mood or appearance.

[El Presidente]

10 minutes ago, Bijan said:

This would be like sending CC vendors cash on the side to secure better boxes and premium service.

 

[Fuzz]

2 hours ago, El Presidente said:

2 hours ago, Bijan said:

This would be like sending CC vendors cash on the side to secure better boxes and premium service.

Now you've gone and done it! Di's gonna start adding a 20% gratuity to all transactions, and Rob's gonna put a tip section in the online store!!

[Çnote]

11 hours ago, SCgarman said:

Basic CC's are $200/box? Show me a $200 box of Monte 4 please. 

HUHC & MC#5 was exactly what I was thinking when I wrote this, what Rob and Ravi used to sell for ~$100 a box.

[cl0udmaster]

In Miami, it is insane for a few reasons:

1) Entitlement in Miami is real. Every waiter is a burgeoning crypto bro and every waitress is an Instagram and Onlyfans star in the making. So, they deserve 20% just for sharing the same air as you. The quality of service has become irrelevant.

2) Many foreigners do not tip, so many restaurants, especially around downtown and Miami Beach, automatically add gratuity.

3) Miami has a lot of lipstick on a pig type restaurants where the packaging is really nice but what is served is still shit. In many of these shit shops, they also automatically add gratuity.

I don't know if you flew through Miami International, but if you did, there are self service kiosks where you pick up a bag of chips or a soda from a fridge yourself, and there is an old Cuban lady standing next to the register where you scan the item yourself, and then the payment system has the nerve to ask if you want to leave a 20% tip for the pleasure of her having looked at you while you picked and scanned your own shit.

[El Presidente]

8 hours ago, cl0udmaster said:

In Miami, it is insane for a few reasons:

1) Entitlement in Miami is real. Every waiter is a burgeoning crypto bro and every waitress is an Instagram and Onlyfans star in the making. So, they deserve 20% just for sharing the same air as you. The quality of service has become irrelevant.

 

nailed it 

[Çnote]

On 9/25/2023 at 4:03 PM, Bijan said:

No offence to you as this is your livelihood. But having to stuff cash into someone's hand for good service, which I am already paying good money for, is what is in the end wrong with tipping.

Let's be ultra-precise: a cash handshake turns 'this is your table' into 'where would you like to dine' It turns 'what would you like tonight' into 'allow me to pick from chef's specialties for you.' Did you want a special cocktail that's way off-piste & most bartenders will say no to? Sure, let's bang those out. Wines that just came in that aren't programmed in POS yet? Want me to go talk to Chef about chateaubriand for two rather than filets? $20 or $50 up front makes things happen. Again, what's $20? A D4. The trick is that you haven't paid for service (yet). $20 up front and 20% on the back will go far if you want to have a fantastic experience.

On 9/25/2023 at 4:03 PM, Bijan said:

I tip 15% for lousy service. Maybe 10% if it's horrible. 18-20% generally. Maybe 25% for something exceptional. Honestly I'd rather pay a flat 30% and not have to deal with the stress, and get a professional level of service, no matter how the server assumes I will tip, based on my mood or appearance.

Run those numbers against your personal average bill and see what the $ difference between 10% & 20% & 30% actually is, and then turn it into cigars. 

~

Tonight, I had a table vehemently complain about autograt on another server. The difference between 20% auto and the 18% they wanted to pay was $3. Most of her (and my) tables had added $10-50 per tab on top of the auto as they had received exemplary service all night. Is $3 worth asking for a manager to have a 20 minute conversation, effectively about how you're cheap? $3!

[rondogg]

Here's was my tipping schedule back in the day or sorta still in Thailand/ CA

1. Poor Student (which I once was) - 5-8%

2. Good service - 15-18%

3. If you get takeout - 0%

4. Above and beyond service - 20-25%

5. Starbucks or any store where I am getting coffee - sorry that's a hard 0%

Cigar lounges - maybe 10%-15% , the staff in Thailand are usually very nice in taking of you.

 

However, let me ask - is the business owner of these established paying their staff minimum wage and passing off the buck to customers? 

[El Presidente]

5 hours ago, Çnote said:

Tonight, I had a table vehemently complain about autograt on another server. The difference between 20% auto and the 18% they wanted to pay was $3. Most of her (and my) tables had added $10-50 per tab on top of the auto as they had received exemplary service all night. Is $3 worth asking for a manager to have a 20 minute conversation, effectively about how you're cheap? $3!

Cody, tables of people are not the easiest (in my experience) to arrange the "right" tip. The larger the worse it gets. 

Some are cheaparses, some over the top. In the end the host who made the booking makes the decision (9 times out fo 10). 

How many times have you here .....who have organised a large table of 8+ been stuck with "overs". 

For $3 does it really matter? 

Ideally you want them to have had an excellent night and to come back. Tiphistrionics is not where you want to play. People remember the way a night starts. flows and finishes. 

No one likes to be told what to do. It is inherrantly ....abrasive. Put an auto 20% tip on the electronic payment device and in many circumstances (the perceived service didn't warrant the amount) and people get their backs up. This is understandable. 

Exemplary service/experience deserves an exemplary tip. Some times people will be disappointed, other times surprised on the upside. Wouldn't you be better off playing the overs and unders? 

Not my game. So your experience trumps mine by far. 

 

 

 

[Çnote]

10 hours ago, El Presidente said:

Cody, tables of people are not the easiest (in my experience) to arrange the "right" tip. The larger the worse it gets. 

Some are cheaparses, some over the top. In the end the host who made the booking makes the decision (9 times out fo 10). 

How many times have you here .....who have organised a large table of 8+ been stuck with "overs". 

For $3 does it really matter? 

Ideally you want them to have had an excellent night and to come back. Tiphistrionics is not where you want to play. People remember the way a night starts. flows and finishes. 

No one likes to be told what to do. It is inherrantly ....abrasive. Put an auto 20% tip on the electronic payment device and in many circumstances (the perceived service didn't warrant the amount) and people get their backs up. This is understandable. 

Exemplary service/experience deserves an exemplary tip. Some times people will be disappointed, other times surprised on the upside. Wouldn't you be better off playing the overs and unders? 

Not my game. So your experience trumps mine by far. 

Autograt is a sticky wicket. We only use it on tables of 6+ and special events, and I always ask servers if they want to 'roll the dice' on 6-8 covers as that size party will often shock you with generosity. We do have parties that specify their % when booking online to avoid any issues at the end of their evening. This is actually a pretty good move, as I'll assign a solid server to that table who I know will earn the % and not coast on the grat.

Last night was a special event. All partied knew their ticket would include service, but I guess they needed that extra conversation with the server and Manager in order to have an enjoyable evening.

[GVan]

Read all the replies - interesting perspectives.  I do appreciate hearing from those that actually work for tips.  I have always been nice to my server and tried to give very good tips (the % of what is a good tip seems to have gone up over the past few years).  I am appreciative of anyone that can work in the service industry since many people are entitled, rude and take service for granted.  I have been lucky in life and try to treat people, especially service workers, very well.

What I would add to the conversation is that tipping itself has now become entitled and it is now more than about the money involved.  Everyone expects a great tip no matter the quality of the food, drink or service even if it's just take-out (and yes, I've seen 35% to 40% on some take-out computer screens).  The culture of it really starts driving my personal thought process towards what you are getting as compared to its actual value.  

Unfortunately, even though we have the money, this has led myself and my family to cut way back on visiting restaurants anymore.  We only dine out, or go to local bars when one of our friends wants to go out with "the group" or we are traveling.  A little research, the occasional YouTube video or an on-line recipe ensures a better meal at home than we get out.  When you add in a bottle of wine, a few old-fashions  and then a big tip; well … It now seems to be a repeating conversation between the wife and I as we drive home -- how much was the total cost of that meal???  I know this perspective is not fair because inflation has driven the cost of food, insurance and rent for the restaurant owner up; not to mention the cost of living for service personnel as well.

However, we can make better meals (sandwiches, steaks, fish, pasta, pizza and now even Chinese) and serve better wine and drinks with the food at home at usually less than half the price of eating out anymore.

[PuroDiario]

Not even Danny Meyer with the insane level of success he has achieved, who has been a vocal advocate against tipping in his restaurants has been able to keep it that way… basically patrons subsidize labor costs in US restaurants. Because the issue is not with the labor I religiously tip high and happily (unless something extreme happened), but is ridiculous to be honest. Same as the “COVID surcharge” and the “COVID recovery fee” and all of those having become part of the price and embedded in menus. 

Another interesting dynamic is in corporate dinners. Imagine situation: 10 people party, high $/diner, corporate type sales/celebratory dinner so on top of meal some nice overpriced wine is poured. You tip 20-30% on the total or you tip only on the meal? Have seen both, and have seen also the flip side of both. Same applies in a big dinner to pre or post tax tipping…Curious to know what everyone thinks. 

[winelover]

In the UK, by far the majority of bills include the "discretionary service charge" usually at 12.5% and it is paid.  The establishment need not share the tips with the staff (as a matter of law, rather than whether they should morally).  Many people round up the bill so pay more than is added, and I suppose if the service is woeful, then one can ask for the discretionary service charge to be removed.  As we are generally cashless, I doubt it is fun being a waiter / waitress as it used to be.  The "National Living Wage" is £10.42 once 23 years or older.

[KarlJ]

Tipping should always reflect the service. The world owes you nothing, you earn it.  The “everybody gets a trophy” mentality has created an entitlement culture in the US.

 

[SCgarman]

20 hours ago, KarlJ said:

Tipping should always reflect the service. The world owes you nothing, you earn it.  The “everybody gets a trophy” mentality has created an entitlement culture in the US.

Spot on. This!