What does everyone think? I first noticed a couple of years ago that the tipping “option” was showing up when I purchased food over the counter. I was a bit taken aback. I do give tips in that situation (the server is waiting right there while I decide the amount) but I don’t go above 10%. It feels like a mini-shakedown to me. From Axios:
Tipping culture is getting out of control, customers say.
By the numbers: Tips at full-service restaurants are up about 25% compared with a year ago, and tips at casual places are up 17%, CNN reports, citing Square data.
The big picture: People started to tip more during the height of the pandemic to support local businesses and essential workers.
And with the rise of digital payments, more and more businesses are including an option to tip on screen — at places people say they wouldn’t normally tip, AP reports.
“Suddenly, these screens are at every establishment we encounter. They’re popping up online as well for online orders. And I fear that there is no end,” etiquette expert Thomas Farley told AP.
Unlike tip jars, these on-screen requests can’t be ignored. And everyone, including the customers behind you and the workers behind the counter, can see whether or not you tip — and how much.
Reality check: The federal minimum wage for tipped workers is $2.13. And service workers rely on tips to make a living.
Now, as tip requests have become more common, some businesses are advertising it in their job postings to lure in more workers even though the extra money isn’t always guaranteed, AP notes.
Many economists estimate that had the minimum wage kept pace with inflation and productivity growth, it would have been close to $24/hr in 2020. As there is no political will on either side of the aisle to lay out a process for making that wage happen (let alone adjust it annually to preserve its purchasing power), getting to $15/hr, knowing most employers are already paying more than that, would be a small step for locking in the floor. The whole tipping thing ought to be abolished like it is in a number of countries (Australia, for one).
Over a year ago I had a pretty intense discussion with my restaurant-owner brother-in-law about what the impact of getting rid of tips altogether and just paying the service help higher wages. I really only was wondering what the total impact would be on pricing, but he got in his head I was trying to tell him how to run his business (definitely not my intent - I have little clue how it works, that’s why I was asking and asking him, and expert, in particular). The reality about it is it has bigger factors than a lot of us might consider in the assessment.
His assessment was, in a nutshell, that it would kill his business. The reasoning being thus:
The menu costs would go up 8 to 10% just from the increase in server help
They’d go up even more than #1 because he’d also have to increase the wages for the cooks because they’re really where the rubber meets the road and if the servers were making more than the cooks there’d be a serious pay equity issue.
While he’s a sit-down restaurant with just some carry-out business, he sees his real competition not as being with a Denny’s or Wingers or similar, but with Wendy’s, Burger King, etc. If his pricing were to be immediately much higher than those competitors who wouldn’t have to raise their prices to accommodate not tipping, he’s certain he’d lose his customers to them.
He noted, quite correctly I thought, that even though in California they made it so they had to pay minimum wages to all the help so that they weren’t dependent on tips, people still, especially visitors, still tip at the same rates they’ve gotten used to. He doesn’t think the public in general really thinks it through if they’re in states with different rules.
The part about who he competes with has always struck me as something that wasn’t obvious, but I see his point. For instance, last month his 2 egg & pancake breakfast with side of meat (ham, bacon, or sausage) was priced at $10.95 on the menu. A week before that I’d paid $11 and change for a small combo grilled chicken sandwich at Wendy’s. Which meal was better? His, of course. But, for diners on a budget that pricing becomes a really big deal, and there are lots of them out there. Mentally it’s more a treat for them to go into his place, but if it cost them 25% more than McDonalds, they may think otherwise.
Lastly, and this is somewhat of an aside, he was recently working on pricing adjustments because of ingredient costs. He told me it’s gotten so the cost of eggs in the steak & eggs breakfast is more than that of the steak. He was paying something like $1400/mo for eggs (around 200 dozen per month). Fazio egg farms out in Tooele County, is making a boatload of money because they didn’t actually lose laying hens to the avian flu, but is reaping the benefit of the current market pricing. Ingredient costs have really pressed my step-daughter’s bakery too (lots of eggs there).
Now, back to the original question and thoughts: I really don’t feel much obligation to tip someone for simply draw a soda from a machine or pour a cup of coffee. If they have to actually do something custom for me or initiate something from scratch, then I don’t mind it at all.