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What I Think About … Tipping

Courtney Knapp,  a guest blogger filling in for Megan McArdle at The Atlantic, wrote an interesting post on tipping.  She closed with a question:

I’m curious: would readers prefer the status quo of tipping, a fixed service charges, or menus that reflect an all-inclusive price? Are you ever confused about how much to tip?

I like the idea of tips, and am a decent (20-25%) tipper myself.  But I *despise* when I hear about  management taking control of tips, mandating splits, and forcing inclusion of  supervisors in the pool. Restaurant owners, particularly corporate restaurant owners, hate direct tipping. Tips are customer money, and they think the house should get it’s profit from tips just as the house gets profit from the food and drink prices. They hate having to mediate tip pools and tip disputes. They hate knowing that servers give things stuff to generate higher tips. The various “tip stealing” schemes are really just the owner’s way to take their cut.  But they are quite possibly illegal, certainly unethical, and completely miss the point of tipping!

There is some logic to the idea of a service charge, although more logic to a per-seat or per-item than a percentage. It takes exactly the same labor to serve and clean up a $10 sandwich as a $40 steak, right?  But really, does anyone believe that a restaurant is going to simply pass along a service charge to the servers?  I don’t. What will instead happen is that the restaurant implements the service charge, gets the customer revenue, and includes it in the wages that they work to minimize. This isn’t wrong, just business.

In my view the ideal establishment (which I have yet to see) pays service staff enough to get the good people, includes those wages in an “all-inclusive” price, and has a sign that says:

We pay our service staff well, and expect them to serve you well. Their wages are included in the prices. No tip is necessary for good service, although we encourage you to tip when you receive excellent service. Please find a manager if you are served poorly.

This is the perfect service world.  Servers who do their job get their wages. Servers who don’t generate complaints and don’t stay long.  Servers who do their job very well get extra compensation from tips. And I get to reward those who take care of me, which is supposed to be the point.


The NY Times reported on the practice a few years ago. Thomas Keller (of French Laundry fame) was blunt enough to say that he wanted to be able to pay his cooking staff more, which means of course that he is mandating the split and cutting the servers out!

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