Why Tipping Culture Is Bad For Everyone
From customers to restaurateurs, everyone who interacts with restaurants is negatively affected by tipping culture
The largest, least effected, and seemingly most aggrieved category of people suffering under tipping culture is the consumer. In a country like the US, we’re all expected to tip at some point or another, and it can sometimes make for a frustrating experience. Yet, complaints about having to tip, from patrons, are somewhat pointless. We’ll never be able to get around the cost of tipping in a real way. Either we’ll be charged more for our food, and some of that will go to pay the workers, or we’ll directly pay the workers a percentage, as we currently do. Still, there is something tedious and off-putting about it, which could be avoided. It’s as simple as this: We shouldn’t be made to feel like we’re paying the staff directly, under the euphemism of gratuity. It’s the restaurant’s responsibility, and this clumsily put together system wherein they bring you a piece of paper and you have to write down some number in line with pre-existing expectations is only viewed as less odd than it is because it’s so common. It’s unnecessary, time-consuming, and, more than anything, awkward.
When you go to a restaurant, you’re charged in absolute terms for whatever you order. Surely, there’s some premium on the food that goes to pay staff for all other services rendered — from management to janitorial services — but there is one service that is itemized and treated as quasi-discretionary. Would it make any more or less sense to be asked to tip the cooks or cleaning staff? They, of course, can do their job in a way that is lacking or exceeding expectations, and that directly effects a customer’s experience as well. If it doesn’t make sense to be able to only pay the chef if their performance is up to par, why does it make sense for the server?
Service Workers
The inherent problem with the tipping model is that it has ended up as the opposite of what it pretends to be. This is because servers aren’t paid a living wage unless tips are included. If their base pay was sufficient, then a gratuity would be just that: extra. However, as it stands, it’s incumbent on the customer to supply the rest of their base pay. This makes tipping a floor, not a ceiling. You’re not gifting a server by tipping; rather, you’re depriving them of their livelihood when you fail to tip. Under these circumstances, it is more likely to be a stick than a carrot. Likewise, because the money is not really extra, it’s expected. This is why many places automatically include a set tip percentage on the bill, which runs counter to the very concept of a gratuity but evidences the true nature of tipping as it now stands.
How does this incentivize waiters and waitresses to approach service? Many of them will try to sift out well-tipping customers from the people who visit their establishment. They might be put off by those who sit at a table when they just want drinks, or by lone patrons, or by young people, etc. The system is one that forces the server into a solely pragmatic mindset, much like a salesperson who has to do whatever they can to get a sale. Tipping is expected of everyone, and the servers need tips to make sufficient wages. Thus, the primary aim is to avoid a scenario wherein you’re getting an insubstantial tip or no tip at all. It’s a negative incentive and one that generates resentment of certain customers.
Another factor, which I’ve already hinted at, is the way tip is calculated: as a percentage of the cost of whatever one has ordered. This means it’s not really directly affected by quality service. Most people when asked how much they tip will answer with a percentage. This means they’re tipping based on how expensive the food/drinks are at that establishment and how large of an appetite they have at that moment. Whether or not you’ve eaten recently would be a more relevant factor for calculating ultimate tip size than how good the service is. Another more relevant factor would be to look at the customer in question. Tipping is expected and ultimately treated as an ethical issue. It’s considered wrong to tip poorly. For this reason, how much pressure an individual feels to abide by these expectations is also a bigger factor than the actual service. Whether or not the service was great is far down on the list of factors that affect tip size, so naturally it’s not going to be an effective system for incentivizing the best service.
If servers were just paid better and didn’t have to worry about tips, they’d be incentivized to treat all customers the same and to provide good service, as that alone would be what ensures they’re getting paid. As the system stands now, you can give low-quality treatment to a person sitting alone who’s just ordering a couple beers during happy hour. There’s likely no substantial amount of money to be made there, no matter how good the service is.
Finally, as someone with a passion for finance, I know well the nature of a risk premium. Money guaranteed is worth much more than money that is expected but not guaranteed. If offered a scenario to definitely make x amount of money or likely make x amount, no one would choose the latter. By the most basic of economic principles, a restaurant paying its workers what they would’ve made with tips is certain to bring greater employee satisfaction.
Owners
The current system doesn’t even make sense for the restaurant owner. The restaurant owner wants people coming back. The more time any customer spends at the establishment, the more money they’ll spend. It behooves the owners to have everyone receive good treatment. Picking and choosing customers to prioritize might work out better for certain servers, but it’s not to the benefit of the establishment as a whole. In fact, anything that serves to worsen the customer experience is bad for the restaurant itself, so in whatever ways tipping culture negatively effects consumers, it also negatively impacts the restauranteur by extension.
Let the same be said for the wait staff. The restaurant owner (or anyone else profiting from the restaurant’s performance) sits atop the system. For them to see the best results, every cog in the machine must be working well. If tipping culture hurts employee satisfaction, it hurts the restaurant as a whole. If the staff are stressed and discontented, quality workers with more options will be dissuaded from working there. If they’re poorly incentivized, their work product will suffer. No one is winning in the current system, and it’s time to make a change.
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