Let’s call time on the tips
It was when we came to say goodbye that I realized I had gone from being a valued customer to persona non grata. Wishing our waitress a good evening as we squeezed our takeout pizzas, we found her reluctant to meet our eyes, her electric American smile replaced by a sullen gaze in the opposite direction.
Our offence? Only left a 15 percent tip.
My friend – a fellow Brit – and I had ordered and sat down with two beers and a slice of bread, while waiting to pick up our takeout from an Italian restaurant in Utah, where we were spending a few days of our vacation. We decided that 15% would be a reasonable tip on our total bill for drinks and takeout.
But what would be considered generous – or unnecessary – in the eyes of Europeans was taken as an insult by our waitress. It was clear that we had made a mistake.
The tipping problem recurred over and over again, by far the most stressful element of an otherwise wonderful stay in the United States. And that made me wonder why tipping is still so prevalent – there and elsewhere.
Even in America, there is no standard experience. Often, a restaurant will include “tipping suggestions” on bills, making amounts for customers on tips at rates of 20, 22, and 25 percent. In other places, these might start at 15%. In some restaurants, such as those in American hotels, the bill may come with a service charge (as is often the case in Europe), but then offer an “extra tip suggestion” for those who wish to pay more. Some simply leave everything to the judgment of the customer.
Many service personnel consider tips to be an essential source of income. Others complain that the system is exploited by managers to reduce their salary costs and would prefer to receive a better salary.
In the United States, tips are considered part of the waiter’s salary, since the law allows companies to pay so-called “tipped workers” less than minimum wage if the difference is made up with tips. But that varies from state to state, with some requiring all staff — whether or not they are tipped — to be paid minimum wage.
For the visitor, the rules are anything but clear. The confusion is greatest at cafes, where customers line up and pick up their own drinks, but baristas can often be low-paid “tip workers” more likely to expect tips to make ends meet. .
After three weeks I still couldn’t discern if I had inadvertently humiliated my servers or made a face of myself by paying too much which added cost to a trip already expensive. But in many places it was clear that the view of tipping as a reward for good service had long since been replaced by the expectation that customers would be forced to raise staff salaries.
International travelers have always had to judge when, where, to whom and how much to give. In Turkey, a modest tip in restaurants is appreciated, but is not customary for taxi drivers or in bars or cafes. In France, most restaurants are required by law to levy a 15% service charge and servers are entitled to pensions and other standard perks, so any extra tip is considered an “extra” reward. and not as a right.
In Britain, a similar service charge is commonly applied, but the rate varies. A study by trade magazine The Caterer found that hotel workers who received tips in 2019 earned an average of £29 a day in tips; while those working in London took £75 a day in tips.
What would a world without tips look like? We don’t need to imagine this – we can travel to Japan, where tipping is an exception and customers who try to tip in a mainstream restaurant are more likely to offend.
This global variation in attitudes weakens the case for tipping by underscoring its status as a historical oddity dating back at least to feudal times. But the best argument against it is that other areas of life function perfectly without it. Would we want our doctor to rely on advice based on the accuracy of his diagnosis? Or the pilot of our airliner for a successful landing? We don’t because we understand that a transparent salary is the best way to compensate someone for good work.
Tipping’s ability to cause embarrassment to the visitor – or to generate resentment between waiter and waiter – has been amplified by growing economic tensions. The rising cost of living and the difficulties faced by service sector businesses and staff coming out of Covid closures have added to the feeling of danger for customers and sharpened the potential for grievance among workers. Many people have felt the need to support service industries that had been forced to close due to the lockdowns, but they themselves are now facing bigger bills, with inflation rising around the world.
Restaurant managers will no doubt consider a call for a ban on tipping a bad joke at a time when they are already asking customers to absorb some of the pain of rising food and wage costs. Without tips or service charges, the amount printed on the bill should increase. But customers know their bill is going up, whether through tips or higher prices. If businesses choose to pass on more in service fees, they are likely to see fewer customers.
Tipping is not a free expense for businesses. This imposes an administrative burden, since tips are generally taxed and must be accounted for. In the UK, a so-called “trunkmaster” – a manager, outside specialist or one of the waiters – sets the distribution of service charges between the room staff and the chefs and back kitchen. Hall. workers (another source of friction) and ensuring that HM Revenue & Customs gets its share.
The US government also levies federal income tax on tips – which is why a New York friend insists on calculating her tips using the pre-tax total printed on the bill. “I don’t tip the government,” she says.
Instead of fading, however, tipping expectations are becoming more entrenched with the introduction of card and touchscreen payment technology.
In the past, a customer could throw notes and coins on the table after paying the bill, leaving the staff to pick them up later, or put money in a tip box at the checkout. Now customers in the United States are frequently presented with a touchscreen offering alternatives – three “suggested tips” at different rates, a custom tip option or “no tip”.
This can speed up the transaction, but it also makes tipping an inescapable obstacle for customers to negotiate at the point of sale, with their waiter in front of them.
I’m under no illusions: tipping is as likely to disappear in the short term as a New York steakhouse is to go vegan. But we should be asking a lot more questions about its role as it creeps into tax policy and new payment technologies. In 100 years, will we still be fighting over tips?
James Pickford is deputy editor of FT Money. [email protected]