Tipping: Let's Get Rid of It

[DonRocks]

I'm having this discussion with a Friend over on Facebook, and if you scroll down, you'll see a back-and-forth between me and Andrew (Andrew is a really nice guy, and a bartender with strong opinions opposing Meyer's plan - you have to be Facebook friends with either Andrew or me to see it (any member of this website who Friend-requests me on Facebook (please supplement the request with a very brief message telling me who you are), will be proudly accepted as a Facebook Friend, and will then be able to see the conversation). For any new and upcoming Friends, I look forward to "meeting" you over there also. (And don't forget to Like the dcdining.com Facebook page while you're at it (see my signature below for direct links to both).)

Cheers,

Rocks

---

PS - Sorry, I thought this discussion was open to my friends, but it's apparently only open to friends of Andrew - thanks to the member who just informed me.

[johnb]

A good piece in today's NYT that fills out some history of how tipping took hold in the US and what some of its impacts have been, especially on women.

"Why Tipping Is Wrong" by Saru Jayaraman on nytimes.com

[DaveO]

It's applied in France, and their servers, in general, are one *hell* of a lot better than ours. When I go to a restaurant in France - in the general case - I have no problem asking the server for recommendations; in the United States, I have *much* more confidence in my own ability to look around, to read the menu, and to come up with a better choice than the server recommends (in my case, which I admit is a special case, that applies to sommeliers as well).

I took a server's advice just last night, and regretted it to no end.

I can't tell you how many waitstaff (both servers and bartenders) I've come across in America who *don't even know the name of the chef*.

The "theory" I referenced had to do with raising prices on base meals (on the base price or with a set "service fee"), not with having FOH staff be better paid.  Individual restaurant operators are going to have to decide if they wish to risk this or not.  Raise prices and in most places one will lose customers.  Its basic economics.   If one goes back to the reviews and comments on Sally's Middle Name, there are comments on pricing, on quality and on relative value as compared to other restaurants in the H Street area.

Its the most basic economics.   That is why I think, all other things being equal, it's up to the individual restaurant operators to confront this issue separately and individually.  Price changes involve risk.

[astrid]

That worry is certainly valid in a notoriously low margin business, yet I do wonder if thats an overemphasis about the price sensitivity of customers, at least at high end places.  When going to a high end place, I'm already sinking so much money and effort into the experience, that a highly positive experience is far more important than another 15% on the tab.  If an extra 15 or even 30% translates to a noticeably superior dining experience, I'd happily pay it.  Even at the middle or low end, eating out is never going to beat the convenience or price of microwaving a Trader Joe's burrito, so restaurants should look at how they can distinguish their experience for customers within their price scheme and demographics. Hopefully flat pricing can succeed at the high end and then cascades down, much as CarMax has hugely improved the car buying experience.

My biggest problem with waiters and waitresses isn't about tipping, it's startlingly poor quality of service on the left half of the service distribution curve.  How hard is it for servers (many of whom must be making $150+ per night at higher end places) to keep the glasses filled, pace the meals appropriately, take and remember orders properly, and quickly bring me the check (so that they can turn the table over?).  There are a good many meals that would be far more pleasant if I could just pay at the register and bus my own table, rather than trying again and again to wave down the right person so I can get a check and leave.

Odd that nowadays, chefs are expected to fork over tens of thousands of dollars over to cooking schools (which is it's own sort of terrible-ness, when the jobs they land are so poorly paid and frankly unpleasant), apparently all it takes to land a FOH job at many places is a pretty face, a nice demeanor, and someone on the inside to hook you up.  That seems to be totally a problem of poor FOH management at many places.

[RWBooneJr]

...Andrew is a really nice guy, and a bartender with strong opinions opposing Meyer's plan...

One of the best, and someone I consider a good friend.  Happy birthday, Andrew!

[Simul Parikh]

In Seattle and dining at this place tonight. 20% charge, and they explain it on their menu in excruciating detail:

http://www.thewalrusbar.com/uploads/menus/Walrus-Food-Menu.pdf

[Marty L.]

Simul:  Walrus & Carpenter appears to use the SMN method:  Adding an automatic 20% to the prices listed on the menu (albeit with a footnote explanation).  I continue to think that is somewhat bizarre and will not sit well with customers.  Why not simply post a price that will represent all costs--and then refuse to accept (all but nominal) tips?

Otherwise, why single out labor costs for a separate line item?  They could list that $20 salmon for $3 rather than $15, with an asterisk noting that there will be an additional $17 charge for the costs of labor, rent, utilities, stemware, etc.?

In Seattle and dining at this place tonight. 20% charge, and they explain it on their menu in excruciating detail:

http://www.thewalrusbar.com/uploads/menus/Walrus-Food-Menu.pdf

[DonRocks]

Simul:  Walrus & Carpenter appears to use the SMN method:  Adding an automatic 20% to the prices listed on the menu (albeit with a footnote explanation).  I continue to think that is somewhat bizarre and will not sit well with customers.  Why not simply post a price that will represent all costs--and then refuse to accept (all but nominal) tips?

Otherwise, why single out labor costs for a separate line item?  They could list that $20 salmon for $3 rather than $15, with an asterisk noting that there will be an additional $17 charge for the costs of labor, rent, utilities, stemware, etc.?

My guess is that it's a combination of two things, primarily the first:

1) The psychology of seeing a lower price on an item

2) It's a minor PITA to add 18% onto each item, and it can create weird prices (I know, I know, that's why I said "primarily the first") - places like to have things ending in .50, .95, .99, and .00. Ironically, I just this minute asked how much my beer was (I'm writing this from a Wolfgang Puckish HMSHost (*) (**) (***) restaurant, and boy does this place suck), and was told $7.63 (while writing this post, I asked, and it's $6.99 plus tax - the bartender knew the total off the top of her head (good for her)).

(*) This is a can of worms that needs to be opened - I'll do it if people are interested, but I already know all about the BS behind the brands. Just Google HMSHost, and you can learn all about the ghastly truth behind this multi-billion-dollar, Bethesda-based (yes, it has Marriott origins) subsidiary of the multi-multi-billion-dollar, Italy-based Autogrill. Yeah, that's right, when you see Wolfgang Puck's smiling face in an airport, you're watching "Meet the Bennetons."

(**) I mean, "HMSHost" is sitting right there on the cash register screen.

(***) These three asterisks quite literally provide enough basis for a doctoral dissertation.

[DonRocks]

I just found these replies on the Facebook page, "Why Bartenders and Servers Hate People":

[DaveO]

Simul:  Walrus & Carpenter appears to use the SMN method:  Adding an automatic 20% to the prices listed on the menu (albeit with a footnote explanation).  I continue to think that is somewhat bizarre and will not sit well with customers.  Why not simply post a price that will represent all costs--and then refuse to accept (all but nominal) tips?

Otherwise, why single out labor costs for a separate line item?  They could list that $20 salmon for $3 rather than $15, with an asterisk noting that there will be an additional $17 charge for the costs of labor, rent, utilities, stemware, etc.?

Its a law.

[Marty L.]

Its a law.

What's a law?  Which law?

[DaveO]

Otherwise, why single out labor costs for a separate line item?  They could list that $20 salmon for $3 rather than $15, with an asterisk noting that there will be an additional $17 charge for the costs of labor, rent, utilities, stemware, etc.?

Its a law.

What's a law?  Which law?

Per this article:

Adding to the confusion is that both state law and Seattle's minimum-wage ordinance require businesses to disclose on menus or receipts what percentage of a service charge goes to workers"”even though they don't technically need to even go to workers. "It needs to say exactly what the percentage is," said Bull. "Is it 20 percent to the server? Is it 20 percent to front-of-house employees? Is it 20 percent distributed among front-of-house and back-of-house employees? Whatever the arrangement is, it needs to be spelled out with percentages."

Who is Bull?

Karina Bull, interim director of the Office of Labor Standards, which oversees education and enforcement of the new minimum-wage law. "It's like a higher-priced menu item; it's no different. Consumers have the right to know where this money is going."

And later in the article a partner at Sea Creatures, Owners of Walrus and The Carpenter explains the statement:

Renee Erickson's company, Sea Creatures, which owns and operates the Walrus and the Carpenter, the Whale Wins, and Barnacle, includes this rather long, clunky disclosure statement explaining its 18.5 percent service charge on both menus and receipts:

The Washington State Department of Labor requires us to disclose that 59.5% of our service charge is paid to employees 'directly serving the customer.' The remaining amount of the service charge is used to pay all employees a base wage of at least $15 per hour, to further compensate other non-direct service employees on top of their base wage, and it provides health insurance and matching retirement savings accounts to eligible employees.

According to Sea Creatures co-owner Jeremy Price, the company was careful to vet this disclosure statement with lawyers before implementing the service charge on May 1. The extra ink crowding its menus and receipts is a small price to pay for a company that wants to leave no doubt in the minds of its workers and customers that the service charge is directly benefiting employees.

It would appear this is a legal requirement, though its probable that enforcement is weak, or non existent, with The Walrus and the Carpenter being one of the restaurants that are trying to follow the letter of the law and the intent...to notify customers where the service charge is going.

[Marty L.]

But presumably if you don't call it a separate "service charge," and instead just build it into the cost of the goods or services (as all other businesses do), then there's no requirement of a specification, right?  Yet another reason to do just that!

Per this article:

Who is Bull?

And later in the article a partner at Sea Creatures, Owners of Walrus and The Carpenter explains the statement:

It would appear this is a legal requirement, though its probable that enforcement is weak, or non existent, with The Walrus and the Carpenter being one of the restaurants that are trying to follow the letter of the law and the intent...to notify customers where the service charge is going.

[DaveO]

But presumably if you don't call it a separate "service charge," and instead just build it into the cost of the goods or services (as all other businesses do), then there's no requirement of a specification, right?  Yet another reason to do just that!

Could be.  In reading about the Washington state law and its implementation by the aforementioned restaurant group, it also seemed that the requirements were such that they might not have been aggressively enforced across the board.

Meanwhile Seattle raised its minimum wage.  The entire market is facing a situation wherein there are higher costs, new standards, etc.  Its a changed environment.  So each restaurateur will make decisions going forward on how to deal with all the changes, including the option to raise base wages, rid themselves of tipping etc.

All in all, its for the restaurateurs to decide.

[Simul Parikh]

For all the pros and cons of increasing the minimum wage, a good meal is so much cheaper here than most places in Europe. A decent sit down meal in Scandinavia or Western Europe or the UK is a slap in the nards. You could make the argument the service is better or the waiters/sommeliers are better, but man is it expensive to eat in London or Copenhagen. I wonder how the locals do it, seeing that the US per capita income is higher than either of those places...

I wonder what will happen overall if we get rid of the $2.13/hr as far as the overall menu prices.

So, three cheers for cheaper meals at the expense of the working man. (sarcasm)

-S

[Simul Parikh]

Who gets the money when you tip?

It's in UK. Interesting - they are allowed to deduct a portion of the waiters tips to give to BOH.

[johnb]

Another NYT article (and an op-ed piece) that fold into the discussion here.  The changing tip policy seems to be being driven in part by changes going on elsewhere in the business.  The laws of supply and demand cannot be ignored.

http://www.nytimes.com/2015/10/21/dining/restaurant-kitchen-chef-shortage.html

http://www.nytimes.com/2015/10/20/opinion/sexism-in-the-kitchen.html?ref=opinion

The chef shortage article makes specific reference to the tipping issue a few paragraphs from the end.

[DonRocks]

The chef shortage article makes specific reference to the tipping issue a few paragraphs from the end.

You don't hear too many line cooks fighting to keep the status quo, but the servers have sure come out in force.

[johnb]

You don't hear too many line cooks fighting to keep the status quo, but the servers have sure come out in force.

Everybody looks out for his/her own immediate interest.  For servers, the problem becomes the long(er) run.  If restaurants are going to stay competitive they have to retain good kitchen staff in an era of shortages -- presumably, the ones who figure out how to pay kitchen staff and keep them are the ones that will stay in business and keep the service staff employed.

My sweetie has a son who cooked for years but finally forsook it and moved to the FOH.  I'm beginning to understand why.

[Simul Parikh]

If the FOH pay is to be maintained, while increasing the BOH pay, then the service charge or price adjustment has to be an increase of 25-30%, and that's if demand is inelastic - that there will be no decrease in demand despite the price increase. If there is a decrease in demand, than even that 25-30% won't be enough. Margins are so slim at restaurants, and when the executive branch finally pushes through the employer mandate, there are going to be significant health care costs to larger restaurants.

This seems unsustainable... We sort of hit "peak restaurant" in the US with regards to the quality of the food at the price we pay, compared to abroad. Curious to see what happens in the next 10-20 years. Outlook doesn't seem great.

[DaveO]

If the FOH pay is to be maintained, while increasing the BOH pay, then the service charge or price adjustment has to be an increase of 25-30%, and that's if demand is inelastic - that there will be no decrease in demand despite the price increase. If there is a decrease in demand, than even that 25-30% won't be enough. 

Simul:   First gut instinct suggests the same to me.  But the big unknown that any restaurateur faces is "if demand is inelastic".   It might be that for a few restaurants  with enormous demand that could be the case.  For others with far less demand its almost assuredly not the case.  Theoretically a Roses, with long lines waiting to get in the door virtually every night might find a service charge to have an inelastic effect.  Restaurants that experience far less demand would probably feel the effect of a price increase on the bill.

There is one other point though that I find difficult in estimating a service charge on prices.   A service charge is a function of revenues.  If a restaurant does $1 million in revenues a service charge of 20% adds $200,000;  a service charge of 30% adds $300,000.  (and that is only if the revenues are inelastic to price increases).  But salaries are a function of number of employees, # of hours worked, etc.  Would the $200 or 300,000 extra cover those higher salaries?????    I don't know.  I don't know how many BOH or FOH staff there are.  What are existing salaries and hours, and how much is needed to bring the base salaries up to the desired "acceptable/appropriate" range.  If revenues fall, will that result in less staff hours???

The equation is complicated.  Its why each restaurateur has to deal with this separately.  Its his/her call and his/her calculation and risk.  From my perspective I wouldn't want to make the call that resulted in less business and less staff hours.  Its a risk call regardless of intentions.

But as for 18%, 20% or up to 30 or 35%...its tied to existing salaries, existing hours worked and the differential between current and target salaries.  Its more complex.   (at least as I read it)

[DonRocks]

Adam doesn't even get into the BOH issues, so he hasn't done that much research.

Dave, there's a Tai Lopez ad before this video that I thought you might appreciate.

And may I add an indecent proposal: Until tipping is eliminated, tip a *fixed amount* on bottles of wine, regardless of whether they're $30 or $3,000, because it's essentially the *same amount of work* (*) for the server (yes, the server gets the tip; not the sommelier). However, I, for one, actually care whether or not people think I'm a cheapskate, so I'm not going to order a $3,000 bottle of wine and tip $6 on it; I'm simply not going to order a $3,000 bottle of wine.

(*) "Oh, but they have to *decant* it! Poor babies ... I've had servers FUCK UP more old bottles of wine by shaking them around than not. When a server mishandles your $3,000 bottle of 30-year-old wine by showing you the label, shaking the bottle in the process like they're playing the maraca - which the majority of servers do, and I'm not exaggerating when I say "the majority of servers do" - they've turned that $3,000 bottle into something close to worthless because all of that nasty, bitingly tannic, sediment on the bottom is now spread throughout the wine, some of it in the form of small crystals that will settle back down in a few minutes; but some in the form of suspended colloids which will remain there for *days if not weeks*. Word.

The equation is complicated.  

The equation is not complicated. Tipping = Bullshit. That's the equation.

Restaurateurs: Raise your prices by 20%, and deal with it yourselves - it's *not our problem*. The only responsibility we have as diners is being patient for a few years while service in the U.S. takes a temporary hit in quality. I will do everything in my power to make sure that diners are aware that this is inevitable during the changeover, and again, I will throw *all my weight* behind each and every restaurant that switches to a non-tipping system. Sally's Middle Name is approaching it the wrong way, but at least they're approaching it. And, once again: Swiss Bakery, Swiss Bakery, Swiss Bakery.

[johnb]

Simul:   First gut instinct suggests the same to me.  But the big unknown that any restaurateur faces is "if demand is inelastic".   It might be that for a few restaurants  with enormous demand that could be the case.  For others with far less demand its almost assuredly not the case.  Theoretically a Roses, with long lines waiting to get in the door virtually every night might find a service charge to have an inelastic effect.  Restaurants that experience far less demand would probably feel the effect of a price increase on the bill.

The inelasticity argument is and is not correct. Those faced with this type of situation (small businessmen particularly) tend to think of it as "what will happen if I raise my prices," and don't really think about it as "what if we all raise our prices."

For the sake of argument let's say the average tip is 20%, and the BOH wage improvement requires another 5%.  If *I* raise my prices 25%, that's only 5% on the bottom line (i.e. 20% to substitute for the now-unnecessary 20% tip plus 5% more to cover the improvement in BOH wages).  Given that, some folks might go elsewhere if elsewhere didn't raise their prices.  But this thing will cover everybody, so elsewhere WILL raise prices too.  So the elasticity we're talking about is not customers choosing to go somewhere else to keep their expenditures down, it's customers choosing not to eat out at all.  This is very different. Customers' typical reaction in such situations is to pull back for maybe a few weeks perhaps, but then it's right back to the old habits.  Who is really going to stop eating out, and cook at home and do dishes, because the total check went from $100 to $105?

I seriously doubt this proposal, if implemented, would have much if any effect on the number of meals being eaten in restaurants, at all levels.  It's just another industry-wide price boost due to a cost increase in some supply factor, same as has been going on since the dawn of commerce.  It will quickly get integrated into everybody's thought process, and once the dust settles business will  go along as always.

[DaveO]

The reason I argue this point, and keep suggesting that each operator/restaurateur must make the decision on his/her own, is simply that nobody can predict the future.  When one makes a pricing change one doesn't know how its going to play out.  Nobody knows.  If one reads reviews of meals at any restaurant anywhere, wherein there are a good quantity of comments one invariably find that commentators might say the price and value are great, or the price and value are high.

Big market.  Many responses.  Does my restaurant have a large percentage of diners who think there is great value at the existing price points....or will I lose them if I raise prices?  Usually that is an enormous unknown.  I have yet to see restaurants that run daily surveys of all customers asking those questions.  Various businesses of all types have raised prices and been knocked on their fannies when the response was not what they expected, or hoped for, or wanted.  Big big unknowns.  I've experienced it somewhat and worked with others who have experienced it on a dramatic basis.

I have a fair understanding of the restaurant business over several decades but I'm not an operator.  Frankly I don't count the receipts, pay the bills, deal with the staff, and deal with the operating issues.  Those are the people who will and should make the decisions.

Frankly I'm neutral as to the suggested changes.  I'm aware enough of talented BOH staff who got woefully insufficient salaries.  I'm also aware of FOH staff, specifically bartenders, who sometimes kill on income and other times simply don't earn enough.  I would suggest that for the majority of food establishments FOH income is very inconsistent.  Its been that way for decades and it remains that way.

Now in some cities where minimum wages have been increased significantly there is a more level playing field between operators.  All operators have been hit with a specific minimum and they are subject to higher wages.  My intuition suggests its easier to institute a fixed fee "service charge" to spread those costs if only because competition faces similar issues.  That is intuition;  I wouldn't swear by it.

BTW:  There are SOB's out there that hire bartenders, bs them, don't pay them any salary, and tell them their entire income comes from tips.  It occurred in the past and it occurs now.  Too many instances where employers take advantage of BOH and FOH staff who are typically less aware of their rights and the laws.

Finally I've seen too many instances where "outsiders" or consultants or "experts" suggest wholesale changes and the results are disastrous.  I've seen it in the food business and seen it  elsewhere.  I've seen it recently and it's more than irksome where something that was working just tanks.

I'd suggest if you want to run around and guarantee results...put skin in the game.

[DonRocks]

[cheezepowder]

The reason I argue this point, and keep suggesting that each operator/restaurateur must make the decision on his/her own, is simply that nobody can predict the future.  When one makes a pricing change one doesn't know how its going to play out.  Nobody knows.  If one reads reviews of meals at any restaurant anywhere, wherein there are a good quantity of comments one invariably find that commentators might say the price and value are great, or the price and value are high.

...

Chef Geoff posted his view, and he also raised concerns about how the higher prices would play out.

[Lary]

major props to business owners that buck the status quo (and get free publicity for doing it), and not to get too geoff tracy and all but... come on. giving extra attention to restaurants who have a no-tip policy?  is mcdonalds in the dining guide now? having no idea what operators pay their staff in addition to tip income, and assuming that we all pay minimum wage with no tips to back of house, and only server pay plus tips to bartenders? do we know how much these no-tip folks pay their staff vs those of us who pay hourly plus tip share, and what their staff actually takes home?

as a consumer, what's the difference, assuming one has the super advanced mathematical skills to calculate a percentage instead of having an operator tack it on (and maybe/probably taking a cut of that brilliant "service fee" for their operating expenses/yacht fuel)? yes, raise the federal minimum wage significantly, retaining the current stipulation that tipped workers have to make AT LEAST that with hourly and tips, or the operator makes it up. this would help low paid members of the entire customer service industry, not just low income workers in restaurants owned by schmucks. those of us who ALREADY pay a decent wage to our tipped workers won't bat an eye at this, because we hold onto our beloved staff by paying more than we're required to already.

[JSnake]

The difference to the consumer is a psychological one, which makes a huge difference in how the customer perceives their dining experience. Seeing the "real" price clear as day before you order means the consumer doesn't feel deceived. Whether this "deception" is real or perceived doesn't actually matter one iota. Yes, on an intellectual level, I can calculate tip and add it onto the listed menu price in my head to get the "real" price but just because I can -- and will -- do this (and let's face it, a lot of people don't, whether because they forget, don't feel like it or are just plain incapable) doesn't mean my primitive monkey brain is immune to post-meal sticker shock.

[sandynva]

In Don's post above (for some reason I can't figure out how to quote it) he proposes a set fee on service for wine, regardless of the cost of the bottle, as it's the same amount of work. this brings me to a related point, which has always bothered me about tipping, and the dc dining scene--to me it seems unfair to tip based on the price of the check, because in very few instances do I feel that the price of the food I order correlates to the quality of service I get. There are some exceptions (Tosca, Rasika) but for the most part, I don't feel that the service at the more expensive places is so much better than at more moderate places  like mandalay, two amys, Bangkok golden or even diners and ihop, and in fact I often feel that the service I get at the more moderate places is better--my water is more consistently topped off, the food is paced well, and I don't have to waive down the staff to get the check or to order an additional drink. However, the staff at the more expensive places get a much larger tip for doing, in most cases, the same amount or less work. I compensate for this to a certain extent by tipping more at small places and a lot more at places like coffeehouses and diners, but still, it doesn't seem fair to me at all. I don't know if this is due to a relative lack of good service in dc or just a failure of the system of assuming that a higher tip and customer discretion as to tip amount leads to better service.

on the other hand though was just in Ireland where tipping is less common and the amount of the tips is lower, and service there, while extremely friendly and kind, was less attentive than it is here (and service in spain recently was similarly not as attentive as I'd like), so maybe the standard American tipping system does create better service.

[Simul Parikh]

It's a good point that the absolute value of the tip has nothing to do with quality of service. If you have a meal at Bangkok Golden that's amazing with perfect service, and you tip 25% on a $60 bill, that's $15. You go downtown DC somewhere and you have terrible service and get less food at some steakhouse, and the bill is $150, and you tip 10%, the tip is the same, and you've rewarded bad service with the same tip as you rewarded good service.

And, Don, why just for wine would you propose that? For the waiter, the work is the same either way. Hell, maybe it's harder at a smaller restaurant!

This whole system is crazy! The more you think about it, the nuttier it gets...

[johnb]

This whole system is crazy! The more you think about it, the nuttier it gets...

Another example.  And I believe Don himself has championed this one -- Giving the same 20% tip at a carryout (or even any tip) as at a full service restaurant.  As if stuffing the food in a bag and adding a few napkins equals the work done by a server, including cleaning up and resetting the table, taking order, bringing beverages/water several times, serving, taking dishes away, wiping, bring check, take check, bring check back, etc etc.  Yes it's crazy.

[DonRocks]

In Don's post above (for some reason I can't figure out how to quote it) he proposes a set fee on service for wine, regardless of the cost of the bottle, as it's the same amount of work. this brings me to a related point, which has always bothered me about tipping, and the dc dining scene--to me it seems unfair to tip based on the price of the check, because in very few instances do I feel that the price of the food I order correlates to the quality of service I get. There are some exceptions (Tosca, Rasika) but for the most part, I don't feel that the service at the more expensive places is so much better than at more moderate places  like mandalay, two amys, Bangkok golden or even diners and ihop, and in fact I often feel that the service I get at the more moderate places is better--my water is more consistently topped off, the food is paced well, and I don't have to waive down the staff to get the check or to order an additional drink. However, the staff at the more expensive places get a much larger tip for doing, in most cases, the same amount or less work. I compensate for this to a certain extent by tipping more at small places and a lot more at places like coffeehouses and diners, but still, it doesn't seem fair to me at all. I don't know if this is due to a relative lack of good service in dc or just a failure of the system of assuming that a higher tip and customer discretion as to tip amount leads to better service.

on the other hand though was just in Ireland where tipping is less common and the amount of the tips is lower, and service there, while extremely friendly and kind, was less attentive than it is here (and service in spain recently was similarly not as attentive as I'd like), so maybe the standard American tipping system does create better service.

It's a good point that the absolute value of the tip has nothing to do with quality of service. If you have a meal at Bangkok Golden that's amazing with perfect service, and you tip 25% on a $60 bill, that's $15. You go downtown DC somewhere and you have terrible service and get less food at some steakhouse, and the bill is $150, and you tip 10%, the tip is the same, and you've rewarded bad service with the same tip as you rewarded good service.

And, Don, why just for wine would you propose that? For the waiter, the work is the same either way. Hell, maybe it's harder at a smaller restaurant!

This whole system is crazy! The more you think about it, the nuttier it gets...

Industrial-sized can of worms ... opened.

You're both right. This idea has popped into my mind before, but it never really stuck - yet now that I'm thinking about it again ... you're both right. There is a level of polish and expertise involved in fine-dining service, but the work itself is no harder than at a diner. I'm not trying to be a commie, but you've both made very salient points, and this is yet another reason why tipping needs to be abolished - we live in a capitalist economy, and it should not be left up to the diner to tip all servers an equal dollar amount (that would be absurd, like saying an assembly-line worker should make as much as a physician because they work just as hard (and indeed they do)) - the restaurants themselves need to figure this all out. Momentum is building for this movement, and I don't think it's going to recede because the system is so illogical that once a critical mass of people learn the truth about it, they aren't going to magically un-educate themselves (the best that restaurants can hope for is people turning a blind eye to the situation (which is not impossible given humanity's track record)).

[Bart]

I have no real idea how the restaurant industry works, but aren't there usually investors involved in a high dollar operation like this?  And if there are investors, isn't it likely that they were shown some sort of business plan with numbers of employees, salaries, rent costs, food cost, etc balanced against projected monthly income from food and drinks?  If those sorts of things happened, is it even possible to just increase the salaries by 50% above the going rate just because you feel guilty about them being underpaid?  

I honestly don't know the answer, and I don't even know if my set up is realistic, it's just something that popped into my head during this discussion.

Regarding the "who *doesn't* acknowledge the problem" statement.........probably 99% of the public.  I mean, if you read this board, you're much more interested in restaurants than 99% of the general public.  If you read food related articles and websites that might discuss the issue, you're probably more interested than 90% of the general public.

Just as a point of reference, out here in the 'burbs, among parents of high school age kids (IE, the people I normally interact with) non of them has even heard of Rose's Luxury!  If I ever mention going there, or I recommend it, I'm faced with blank stares, and I have to go through the whole history of the place, and talk about the waits and the line, and the "weird" awesome food.  Now that I think about it, the same goes for most 20 and 30 somethings I work with......."Rose's what?"  So if the general public hasn't even heard of the hottest restaurant in DC in 20 years (??) do you really expect them to know that cooks are underpaid?

I don't,  Hell, based on all the celebrity chefs and food shows, they probably assume the cooks are all rolling in dough.

[Ericandblueboy]

It's his business, he can pay what he wants.  As far as I'm concerned, I don't want artificially inflated wages in any job.  

[mtureck]

Maybe it's time to make this a new thread in a different section, but I'm curious about something.

A question to any of the fine restauranteurs on this board...if you doubled the salary of your line cooks, how would that affect the price of the food? Can you guess what the percentage increase might be?

[Simul Parikh]

Going to be hard to get an honest answer to that. The reported margins are so slim (6-8% when I did my research), but so many people are hiding money/claiming a loss to avoid paying taxes, so I bet profitable restaurants are doing much better than that. These big places like Momofuku make a ton of revenue, and with drinks have a much better margin than 6-8%. Just looking online, seems like Slanted Door in SF does about $17 million in sales, and estimated margins are like 20%+. So, I think these big name places probably could double salaries without having to raise prices too much, but the investors would be unhappy.

If the BOH costs are like 15-20% of costs, and you want to double their salaries, then to keep the investors happy, prices probably would go up a similar amount, right? Maybe you'd get less turnover, more efficiency, less stealing, and doubling their salary wouldn't actually cost double.

On the other hand, a $100k for a souz chef ... I don't know .. a freshly graduated pediatrician barely gets over a $120k / year in major metro area for a job that requires quite a bit more education/training. I guess I'm biased.

[cheezepowder]

Maybe it's time to make this a new thread in a different section, but I'm curious about something.

A question to any of the fine restauranteurs on this board...if you doubled the salary of your line cooks, how would that affect the price of the food? Can you guess what the percentage increase might be?

Consider the numbers here from Food & Wine -- "5 Updates on Danny Meyer's No-Tipping Revolution".  Though unknown what the extra income would be from the revenue sharing program.

...The average starting hourly pay for a line cook in New York City is $11. When the no-tipping policy is implemented, the Modern will raise its starting pay to $14 an hour. That news is already attracting potential cooks. According to Bissell, the Modern was short twelve cooks just three months ago and is now getting two to three job applications a day (up 3,000 percent). In the future, kitchen staff will take part in the revenue sharing program.

...

On average, Meyer said to expect to pay 5 to 8 percent more than you currently would at one of USHG's restaurants (including tax and tip)....

[DonRocks]

What I find interesting is that the fundamental laws of supply and demand don't seem to apply to line cooks. There is a *massive* shortage in the DC area; yet, the price isn't going up that much - implicit collusion?

"Oh, hell no, I'm not going to pay them $20 an hour - nobody does, and I'd be out of business in a week."

On the other hand, "My God, we are so *desperate* for kitchen staff."

[Bart]

Not sure I understand the wisdom of taking my perfectly appropriate (and brilliant) post about Chang/Momofuku/cook's salaries/Rose's Luxury and relocating it here, but you're the boss.   ;-/  

Isn't the problem with line cooks and their salary due to the fact that they're not "a thing".  You're a line cook, I'm a line cook, he's a line cook.  What have you got?  Three independent units with little to no knowledge of each other.  No critical mass, no bargaining power, no nothing.  Just independent operators.

Can they unionize somehow, or form some sort of collective and all go on strike, or demand higher wages?  Who knows?!?!?

I certainly don't.  Like I said before, I know almost nothing about the actual restaurant business.!

[DonRocks]

Not sure I understand the wisdom of taking my perfectly appropriate (and brilliant) post about Chang/Momofuku/cook's salaries/Rose's Luxury and relocating it here, but you're the boss.   ;-/    

[Yours is the one I waffled about leaving there, but it started this conversation, so I thought it had a better home here.]

[DonRocks]

I found a second bakery that has no tip jar, and refuses to take tips: Village Sweet in Westover.

[silentbob]

Going to be hard to get an honest answer to that. The reported margins are so slim (6-8% when I did my research), but so many people are hiding money/claiming a loss to avoid paying taxes, so I bet profitable restaurants are doing much better than that. These big places like Momofuku make a ton of revenue, and with drinks have a much better margin than 6-8%. Just looking online, seems like Slanted Door in SF does about $17 million in sales, and estimated margins are like 20%+. So, I think these big name places probably could double salaries without having to raise prices too much, but the investors would be unhappy.

Joe's Crab Shack just got rid of tipping and it looks like they'll be raising prices by 12 to 15 percent.

[jandres374]

Not sure if this belongs here or not but a general question on tipping.

I have a couple spots that I hit up routinely for lunch when I want to get away from people at the office and sit at a bar and have a burger and a couple beers.  I have gotten to know a few of the bartenders and couple of them don't charge me for 1 of the 2 beers.  What is the protocol on how to tip on something like this?  Typically the beer is in the $6-$8 range.

[DonRocks]

Not sure if this belongs here or not but a general question on tipping.

I have a couple spots that I hit up routinely for lunch when I want to get away from people at the office and sit at a bar and have a burger and a couple beers.  I have gotten to know a few of the bartenders and couple of them don't charge me for 1 of the 2 beers.  What is the protocol on how to tip on something like this?  Typically the beer is in the $6-$8 range.

This happens to me in various situations, and my response is based entirely on the situation. In what you describe, there's no way the bartenders are expecting the full amount of the beer, but they're probably hoping for something a bit more than 20%, especially if you ordered the beers and weren't simply brought them without asking. I'll throw a figure out there and say $2 per beer, $3 if you're feeling generous. Anyone else? I'm curious to know what people think about these types of situations.

BTW, owners sometimes (read: often) *hate* it when bartenders do this, and bartenders sometimes do it because they don't care about the owners. I'm not saying that applies here, but it definitely happens.

[dcs]

This happens to me in various situations, and my response is based entirely on the situation. In what you describe, there's no way the bartenders are expecting the full amount of the beer, but they're probably hoping for something a bit more than 20%, especially if you ordered the beers and weren't simply brought them without asking. I'll throw a figure out there and say $2 per beer, $3 if you're feeling generous. Anyone else? I'm curious to know what people think about these types of situations.

BTW, owners sometimes (read: often) *hate* it when bartenders do this, and bartenders sometimes do it because they don't care about the owners. I'm not saying that applies here, but it definitely happens.

If you are a regular at any bar it is inevitable that will result in being given free drinks, especially if you are a good tipper.  At least one bartender has told me they are given an allotment of comped beverages they can give out per day and guess what?  They give them to regulars who are generous tippers.  I have experienced this phenomenon in many different states over the course of many decades, so I can only assume the practice is common, if not universal.  I have had owners who were tending bar do it.  (Back where I came from in New Jersey the practice used to be that you do not tip owners when they are tending the bar, but that little piece of etiquette seems to have gone by the wayside.)  I have always understood the protocol to be to tip on the amount the check would have been had they charged for the comped beverages.  I usually add the taxes into the base amount upon which to tip, and push the percentage closer to 25% or whatever is a near enough number that is easier to round up to.  If you are out for a burger and a couple beers the difference between 20% and 25% is only a few dollars most likely and certainly less than the price of the free beer.

[DaveO]

Not sure if this belongs here or not but a general question on tipping.

I have a couple spots that I hit up routinely for lunch when I want to get away from people at the office and sit at a bar and have a burger and a couple beers.  I have gotten to know a few of the bartenders and couple of them don't charge me for 1 of the 2 beers.  What is the protocol on how to tip on something like this?  Typically the beer is in the $6-$8 range.

This happens to me in various situations, and my response is based entirely on the situation. In what you describe, there's no way the bartenders are expecting the full amount of the beer, but they're probably hoping for something a bit more than 20%, especially if you ordered the beers and weren't simply brought them without asking. I'll throw a figure out there and say $2 per beer, $3 if you're feeling generous. Anyone else? I'm curious to know what people think about these types of situations.

BTW, owners sometimes (read: often) *hate* it when bartenders do this, and bartenders sometimes do it because they don't care about the owners. I'm not saying that applies here, but it definitely happens.

If you get a free drink or two, I would tip generously (with generously being your definition)

As to the practice:  Within the industry there is something often described as a "comp check" or a "comp tab" or some other names.  It can be applied by ownership and management and provided to staff in the front of the house.   You can see it referenced within DR.com here.   I wouldn't call it a norm, but it is fairly widely used.  Its usage is dictated and provided from the top.  Ownership or management gives certain staff;  (GM or AGM as in the referenced post)   bartenders quite often, a certain amount of money (an allowance to spend--not real money).  The staff can use that to give customers freebees.  Could be a meal.  Could be a drink, could be half a meal.  It varies.

When a bartender is applying a comp check, its not stealing.  Its really a "salesy" kind of thing.  You'd want to give it to people who you think will become or are regulars or who bring in other customers, or who might.  Depending on the place you ring up the comp amount or record it and submit it.  If I'm a bartender with a $50 comp check that night and I give away $50 of drinks I record it some way.  That isn't stealing.  It is an internal business practice.

In the vast majority of cases the staff never advertises the fact they have comp checks.  As a customer most of the time if you are getting free drink(s) you probably don't know if the bartender is "stealing" (giving them away for free), or comping you and paying for it him/herself, or has a comp check (or tab).

I wouldn't call the practice a "norm" but it is widely used.

Again, in my personal experience if I get a free "something" I tip very well.

[DanielK]

... tip on the amount the check would have been had they charged for the comped beverages.  ... and push the percentage closer to 25% 

This is what I have always done for comps of any kind. Pretend I was paying for it, base the tip on that, and round up.

[cheezepowder]

I was in NY yesterday and had some form of tip automatically added or included at lunch and dinner.

I had lunch at Joe's Shanghai, and they add a 15% service charge to the bill (from an internet search, seems that this has been their practice for a long time).

I had dinner at Huertas, and they recently switched to a system in which the menu prices already include tip (see note at the bottom of the menu). In addition to the note on the menu, the server mentioned it to me when presenting me with the bill, and the credit card slip did not have an additional line to add tip.

Screenshot of bottom of menu

[Bart]

I had lunch at Joe's Shanghai, and they add a 15% service charge to the bill (from an internet search, seems that this has been their practice for a long time).

Sort of off topic, but sort of on.

What do you (the Don Rockwell community, the public at large, etc.) calculate the tip percentage on, the pre-tax amount or the post-tax amount? I think I remember reading the Washington Post Chat way back when Phyllis Richman was running it, that you were supposed to use the pre-tax amount.

I always do 20% on the post-tax amount than adjust accordingly (which in 99% of the cases is up). Maybe I'm tipping way too high (post-tax amount) or maybe that's what most people do, but either way, if a place is going to impose a mandatory tip at 15% or 18%, they're probably going to end up losing money from me. Of course at the end of the night, the server may be way ahead in the total they take in.

[Pat]

I have tried 6 times to reply to this ^^^ post, but the software is going completely haywire and will not allow me to reply to a portion of the comment.  All I was trying to write was one sentence saying that I, too, typically tip 20% on the post tax amount and then adjust accordingly.