Why Is Tipping Everywhere You Checkout?(maxinomics.com)
maxinomics.com
Why Is Tipping Everywhere You Checkout?
https://www.maxinomics.com/blog/why-is-tipping-everywhere-you-checkout
249 comments
It seems different in the US, where everyone is expected to tip as part of the overall price, like the article describes, and there is tipping Europe where the tip is not needed to boost the wage to an acceptable level but is simply to reward people who have gone above and beyond.
In many restaurants in the UK, a "tip" is automatically included for large parties to reward the extra work required but can be removed on request if they didn't think your service was good.
In many restaurants in the UK, a "tip" is automatically included for large parties to reward the extra work required but can be removed on request if they didn't think your service was good.
I live in the US and I HATE tipping.
Just multiply all the menu items by 1.15, 1.18, 1.20, or whatever you need to ensure your wait staff is happy, and re-print the menu.
Don't make ME have to bust out a calculator and do math after my meal, and then have to decide which of the above numbers I should use.
Just multiply all the menu items by 1.15, 1.18, 1.20, or whatever you need to ensure your wait staff is happy, and re-print the menu.
Don't make ME have to bust out a calculator and do math after my meal, and then have to decide which of the above numbers I should use.
I always tip 20, but I honestly hate doing it for many reasons.
I also hate separate sales tax. Just build it into the menu.
I just got back from Portugal. 99% of places took cards. When you are ready to pay the bill, they bring out the portable POS machine, you tap your card, and you're done. No awkward tipping screen. No separate calculation for sales tax. No pressure to buy bottled water or charging of table fee like in Italy.
What you see in the menu is what your final will be.
Eating out was cheap, fun, hassle free, and tasty.
I also hate separate sales tax. Just build it into the menu.
I just got back from Portugal. 99% of places took cards. When you are ready to pay the bill, they bring out the portable POS machine, you tap your card, and you're done. No awkward tipping screen. No separate calculation for sales tax. No pressure to buy bottled water or charging of table fee like in Italy.
What you see in the menu is what your final will be.
Eating out was cheap, fun, hassle free, and tasty.
>I just got back from Portugal. 99% of places took cards. When you are ready to pay the bill, they bring out the portable POS machine, you tap your card, and you're done. No awkward tipping screen. No separate calculation for sales tax. No pressure to buy bottled water or charging of table fee like in Italy.
Here in Japan, it's much the same.
After you're done ordering, the server leaves a slip of paper in a special holder on your table with the bill written/printed on it. It's just a total of the things you ordered, which are clearly printed with prices on the menu.
When you're done, you go to the cashier at the front with this paper, and pay. Most places take credit cards, plus various online options (PayPay, LINE Pay, etc.). Many also take Suica/Pasmo cards (the contactless cash cards you use to get on the subway).
Sales tax is included in the price.
Tipping *does not exist*.
Water is free. (It's tap water though, but it's fine. Water quality here is excellent for tap water.)
Table fees (cover charges) I think exist in some places but not in normal restaurants, and they're clearly shown before you sit down.
Japan has more Michelin-star restaurants than anyplace in the world outside of France. Restaurants aren't much more expensive than cooking at home, depending on what you order/make of course.
I honestly don't know why anyone bothers going out to eat in the US any more unless they're rich. It's a complete rip-off.
Here in Japan, it's much the same.
After you're done ordering, the server leaves a slip of paper in a special holder on your table with the bill written/printed on it. It's just a total of the things you ordered, which are clearly printed with prices on the menu.
When you're done, you go to the cashier at the front with this paper, and pay. Most places take credit cards, plus various online options (PayPay, LINE Pay, etc.). Many also take Suica/Pasmo cards (the contactless cash cards you use to get on the subway).
Sales tax is included in the price.
Tipping *does not exist*.
Water is free. (It's tap water though, but it's fine. Water quality here is excellent for tap water.)
Table fees (cover charges) I think exist in some places but not in normal restaurants, and they're clearly shown before you sit down.
Japan has more Michelin-star restaurants than anyplace in the world outside of France. Restaurants aren't much more expensive than cooking at home, depending on what you order/make of course.
I honestly don't know why anyone bothers going out to eat in the US any more unless they're rich. It's a complete rip-off.
> I also hate separate sales tax. Just build it into the menu.
Presumably this is in part for the same reasons as the article's take on tips. If one business includes sales tax in their prices and another doesnt, the one who doesnt is going to look cheaper to customers even though its actually the same price.
Sales tax is also surprisingly complicated in the US. At least where I live, there is sales tax from the State, County and City in addition to a variety of special sales taxes for things like transit districts. It means, for example, its easy to find places where the sales tax is different on two sides of the same street (because there is a city boundary there or something else).
Presumably this is in part for the same reasons as the article's take on tips. If one business includes sales tax in their prices and another doesnt, the one who doesnt is going to look cheaper to customers even though its actually the same price.
Sales tax is also surprisingly complicated in the US. At least where I live, there is sales tax from the State, County and City in addition to a variety of special sales taxes for things like transit districts. It means, for example, its easy to find places where the sales tax is different on two sides of the same street (because there is a city boundary there or something else).
> Sales tax is also surprisingly complicated in the US.
Sure but the sales tax number for your establishment's particular location is constant, so you can still build it into the menu.
Sure but the sales tax number for your establishment's particular location is constant, so you can still build it into the menu.
> In many restaurants in the UK, a "tip" is automatically included for large parties to reward the extra work required but can be removed on request if they didn't think your service was good.
This is often the case in the US where it's default 18-20% for parties of more than 6-8 in my extremely unscientific recall. What's funny is that now 20% is already the default so they just made it a bit easier on the diner is all.
This is often the case in the US where it's default 18-20% for parties of more than 6-8 in my extremely unscientific recall. What's funny is that now 20% is already the default so they just made it a bit easier on the diner is all.
basically the same up in Canada large groups of people 6+ in smaller venues, 8-10+ in other for the group tip... and some even ask for another tip afterwards...
>there is tipping Europe where the tip is not needed to boost the wage to an acceptable level
The internet gets the cause and effect on this backwards. Waitresses get paid 2 dollars an hour in much of the USA because they get tips. They don't get tips because they get 2 dollars an hour.
You could pay waiters 60 dollars an hour and Americans would keep tipping.
The internet gets the cause and effect on this backwards. Waitresses get paid 2 dollars an hour in much of the USA because they get tips. They don't get tips because they get 2 dollars an hour.
You could pay waiters 60 dollars an hour and Americans would keep tipping.
A default service charge is pretty common in the UK for sit-down food service at this point in my experience.
In the US, it's a very path dependent thing. High-end restaurants have tried experiments to eliminate it but front-of-house staff in particular didn't like it because in many cases they made less money.
In the US, it's a very path dependent thing. High-end restaurants have tried experiments to eliminate it but front-of-house staff in particular didn't like it because in many cases they made less money.
What extra work required? It seems to me that the attention paid per individual is always less for large parties than, say, a party of two. It's much less personal.
The solution seems clear, stop tipping...
The problem is, it requires everyone to stop tipping simultaneously for the owners to start paying wait staff properly.
If only a small fraction of people stop tipping, they'll get shamed as assholes and nothing gets changed.
If only a small fraction of people stop tipping, they'll get shamed as assholes and nothing gets changed.
Yeah. As an individual, if you stop tipping, a large chunk of (North American) society will think you’re a cheap asshole who’s disrespecting your server and won’t care that you’re taking a stance against a larger issue.
There’s nothing wrong with ignoring those people. But I think the average person cares much more about social norms and being judged by others than the people suggesting to just stop tipping.
There’s nothing wrong with ignoring those people. But I think the average person cares much more about social norms and being judged by others than the people suggesting to just stop tipping.
> society will think you’re a cheap asshole who’s disrespecting your server
Tipping in a restaurant where someone is waiting on you is different but, I have zero problems with refusing to tip at the register in retail stores, or for carry out orders at restaurants. I think we can collectively decide against that without fear of being ostracized by society. There's no "norm" right now that says I have to tip someone for a retail transaction, but there is pressure being put on us to normalize it so that businesses can save on labor expenses. Just say no.
Tipping in a restaurant where someone is waiting on you is different but, I have zero problems with refusing to tip at the register in retail stores, or for carry out orders at restaurants. I think we can collectively decide against that without fear of being ostracized by society. There's no "norm" right now that says I have to tip someone for a retail transaction, but there is pressure being put on us to normalize it so that businesses can save on labor expenses. Just say no.
For me personally though it's less about being judged (the shaming part) than it is about whether or not what I'm doing is actually causing change to happen.
If there isn't critical mass, the owners won't change anything, and it unfortunately does end up punishing the servers instead of the owners.
If there isn't critical mass, the owners won't change anything, and it unfortunately does end up punishing the servers instead of the owners.
Or you could change the wage laws and be prominent in announcing it and then people can stop tipping on a known date when the law changes
Nearly every restaurant in London automatically adds ~12% even for 2 people. I don't know about the rest of the UK but it can't be drastically different.
> Some of you may be too young to realize but there has been tip % inflation that is when combined with price inflation the tip amount has grown geometrically
This is the most annoying part of many point-of-sale systems at counter-service restaurants today. You tap your card/phone/watch, and are then presented with big buttons for say, 35%, 30%, and 28% (I'm exaggerating, but not by much). The "custom amount" button is somewhere different for each POS vendor (Square, Toast, etc.) so you have to search for a moment if you want to tip a more traditional amount (or an amount that you might consider more commensurate with having to dispense your own water and bus your own table, for that matter).
This is the most annoying part of many point-of-sale systems at counter-service restaurants today. You tap your card/phone/watch, and are then presented with big buttons for say, 35%, 30%, and 28% (I'm exaggerating, but not by much). The "custom amount" button is somewhere different for each POS vendor (Square, Toast, etc.) so you have to search for a moment if you want to tip a more traditional amount (or an amount that you might consider more commensurate with having to dispense your own water and bus your own table, for that matter).
> so you have to search for a moment if you want to tip a more traditional amount
And kind of like cracking security where certain operations take more or less time, you have the embarrassing experience of the waiter immediately knowing you're not tipping the requested amounts.
And kind of like cracking security where certain operations take more or less time, you have the embarrassing experience of the waiter immediately knowing you're not tipping the requested amounts.
What bugs me is with some of the POS systems is that if you make a mistake with the custom tip amount, you have to restart the transaction (i.e. hand it back over to the cashier). It's aggravating.
> Some (many?) countries have demonstrated that no-tipping can work just fine.
Yes, but the reason it's difficult to implement when there was previously a tipping system is the fact that increasing prices to cover labour means a no-tipping place has a higher menu price than a place that encourages tipping.
Customers also have less perceived "power" over their dining experience.
France for example, (mostly) abolished their tipping culture through several pieces of legislation and to this day there's a 15% service charge on your bill in France. Even then they still tip, a little.
Yes, but the reason it's difficult to implement when there was previously a tipping system is the fact that increasing prices to cover labour means a no-tipping place has a higher menu price than a place that encourages tipping.
Customers also have less perceived "power" over their dining experience.
France for example, (mostly) abolished their tipping culture through several pieces of legislation and to this day there's a 15% service charge on your bill in France. Even then they still tip, a little.
> to this day there's a 15% service charge on your bill in France
I can't think of any place that bills service separately. They just say the menu is €20, and you pay €20.
I can't think of any place that bills service separately. They just say the menu is €20, and you pay €20.
This happens in India. It’s called a service charge and is usually ~10% of the bill.
* Upper-mid to more expensive restaurants usually keep a service charge.
* Customers have the right to ask it to be removed.
* When there’s no included service charge, some restaurants’ waiters point this out, possibly expecting a tip.
* When there’s no included service charge, and the waiter doesn’t point this out, some customers feel free to leave a tip in cash.
* Some restaurants include a service charge and outright reject tips (politely) - this is rare but it has happened with me. Even when I tried to tip them after hosting a large party.
* Upper-mid to more expensive restaurants usually keep a service charge.
* Customers have the right to ask it to be removed.
* When there’s no included service charge, some restaurants’ waiters point this out, possibly expecting a tip.
* When there’s no included service charge, and the waiter doesn’t point this out, some customers feel free to leave a tip in cash.
* Some restaurants include a service charge and outright reject tips (politely) - this is rare but it has happened with me. Even when I tried to tip them after hosting a large party.
Yes because it's included. Like taxes and things. But it's there.
> Why cant we just give employees dignity and a fair wage?
We do and that's tipped wages. A career waiter in a major American city can make over 100k, which is several times more than what they would make in Europe. Even if you adjust for cost of living and median incomes, it's still going to be much higher. On the low end of the spectrum, tipped wages and untipped wages would be both at minimum wage.
We do and that's tipped wages. A career waiter in a major American city can make over 100k, which is several times more than what they would make in Europe. Even if you adjust for cost of living and median incomes, it's still going to be much higher. On the low end of the spectrum, tipped wages and untipped wages would be both at minimum wage.
> A career waiter in a major American city can make over 100k,
Yeah, but this is counter service we are talking about. The person making your latte is not making $100k/year. When I worked at a coffee place ~20 years ago, tips were about $1/hour per employee and that was like 10% of my income. Certainly wages and presumably tips are higher now, but these jobs still dont pay much over minimum wage.
Yeah, but this is counter service we are talking about. The person making your latte is not making $100k/year. When I worked at a coffee place ~20 years ago, tips were about $1/hour per employee and that was like 10% of my income. Certainly wages and presumably tips are higher now, but these jobs still dont pay much over minimum wage.
I talked about waiters at high end restaurants because that's where the effect of tipping is most evident, but the same market dynamics exist for counter service as well. For employees and the restaurant itself, tipping is almost always going to be better than non-tipping. If these employees aren't getting paid enough, that's something that can only be solved by raising the minimum wage.
According to Google: As of Nov 2, 2022, the average annual pay for a Waiter in New York City is $35,180 a year. Just in case you need a simple salary calculator, that works out to be approximately $16.91 an hour. This is the equivalent of $676/week or $2,931/month.
It's not just waiters though, in fact the article specifically uses coffee shop employees as an example. I would be quite surprised if they're clearing 100k, even in a major city.
Coffee shop employees are not Tipped employees. They get minimum wage.
This conflation of actual legally tipped employees (who get a substantially smaller than minimum wage wage) and everyone else is leading to really stupid ideas.
This conflation of actual legally tipped employees (who get a substantially smaller than minimum wage wage) and everyone else is leading to really stupid ideas.
You aren't, I genuinely try to tip well, knowing how stacked things are, and I'm lucky to be in a higher income bracket, but it sucks, and I wish we could end tipping via an outright ban (as to not cause weirdness in the marketplace). I'd rather the prices adjust accordingly, and everyone gets a fair wage.
Its so much more transparent. and I think thats really what it is, its a way to obfuscate pricing transparency to the broader market.
The folks who don't tip at all are the ones who win, I suppose, as its genuinely cheaper if you don't, but I suspect if you frequent a place alot, people will figure this out and it will actively work against you.
I have, in leaner times, not tipped at establishments I knew I wasn't going to frequent again or so little there was no way for them to really identify me, if the service was bad / subpar or just for pickup.
I always tip for sit down service though.
Its so much more transparent. and I think thats really what it is, its a way to obfuscate pricing transparency to the broader market.
The folks who don't tip at all are the ones who win, I suppose, as its genuinely cheaper if you don't, but I suspect if you frequent a place alot, people will figure this out and it will actively work against you.
I have, in leaner times, not tipped at establishments I knew I wasn't going to frequent again or so little there was no way for them to really identify me, if the service was bad / subpar or just for pickup.
I always tip for sit down service though.
>Why cant we just give employees dignity and a fair wage?
Define dignity first, maybe? A slave in chains can still have dignity, and the most wealthy and powerful of men can be utterly undignified.
Define dignity first, maybe? A slave in chains can still have dignity, and the most wealthy and powerful of men can be utterly undignified.
I'm not going to go into a full definition here, but I guess I consider it undignified to have your material needs dependent on the good will of others who choose to follow a social convention to pay more than strictly required to.
We can, and should give employees dignity and a fair wage. We can each start right now by directly transferring a tiny portion of our wealth to the individuals that we interact with who could benefit from it (at least in this specific context, not exclusive of others who could also benefit).
I figure, I have it, they could use it, and I don't need to change everything about our economy and society to do it. I can just give someone some money. Simple and elegant.
I figure, I have it, they could use it, and I don't need to change everything about our economy and society to do it. I can just give someone some money. Simple and elegant.
I’m sorry but why should it be our wealth? Billionaires seem to have a lot more spare cash sitting around, let them pay for it.
Back in the occupy wallstreet days I did some rough calculations, I wondered "If we appropriated the wealth of every billionaire, how much of a boost in the economy would we have?" It turned out surprising low. It was something like (iirc) 3 months of the economy and the money would be gone. And then who are we going to rob? They are massively relatively wealthy, but accumulated wealth is nearly nothing compared to the aggregated flows of the economy.
What's missing in that analysis is that the billionaires not only accumulate wealth, they also redirect flows. It's not just a question of repossessing Jeff Bezos' private jets; it's also a matter of reclaiming the vast sums of money spent on a yearly basis keeping them flying (a nontrivial fraction of the cost of the jets themselves).
Or to put it another way - if you stripped away all of Bezos' liquid assets, don't worry - he'll have more for you to take next month, courtesy of the massive rent-seeking apparatus he would still sit atop.
Or to put it another way - if you stripped away all of Bezos' liquid assets, don't worry - he'll have more for you to take next month, courtesy of the massive rent-seeking apparatus he would still sit atop.
I agree with your sentiment on tipping - I feel the same way. However I think the article did a pretty good job at answering your question of Why cant we just give employees dignity and a fair wage?. It's for economic reasons.
To make it work you'd have to collude on pricing with all the other coffee shops (which I think would be illegal but IANAL), or you'd have to use government force to ban tipping (which would without a doubt hurt many people in different areas). It's a hard problem, though I do hope we can figure it out because the status quo of expecting 20+% tip on an already expensive product is not good.
To make it work you'd have to collude on pricing with all the other coffee shops (which I think would be illegal but IANAL), or you'd have to use government force to ban tipping (which would without a doubt hurt many people in different areas). It's a hard problem, though I do hope we can figure it out because the status quo of expecting 20+% tip on an already expensive product is not good.
>the status quo of expecting 20+% tip on an already expensive product is not good.
Eliminate the expectation of a 20% tip and prices will basically go up 20% to cover an increase in base pay for the staff. So consumers probably won't actually save money if tipping were eliminated.
Eliminate the expectation of a 20% tip and prices will basically go up 20% to cover an increase in base pay for the staff. So consumers probably won't actually save money if tipping were eliminated.
You can see a comment below where a bartender is saying that they earn much more from tips than they would ever get paid with wages. This is a pretty common sentiment from waiters when a place says it's going to give up tipping. So that money is going to go somewhere. Some to the owners, some to the consumers, some to the people in the back. Probably also some to people who wait tables/bartend and make little (this seems to be a situation where people who know how to work the system make a lot while others stumble).
It would also remove a fairly large mental burden on consumers.
This is why I find it odd that people get mad when the occasional customer gives a low or no tip. That's the system, and you're saying you prefer this system because it overall makes you much more money than the alternative, at the cost to consumers and others.
It would also remove a fairly large mental burden on consumers.
This is why I find it odd that people get mad when the occasional customer gives a low or no tip. That's the system, and you're saying you prefer this system because it overall makes you much more money than the alternative, at the cost to consumers and others.
That is an acceptable outcome. Take out the social aspect and just pay people.
The west coast states in the US have not had a lower tipped minimum wage for many years, and the social aspect still has not changed.
Tipping incentivizes good service. When I travel to countries without tips I always have to chase down someone for service..
I get a tip popup at the checkout register for my local frozen yogurt place, where the cashier just watches me put my yogurt on a scale and tells me how much it costs.
Many of the very best restaurants in the country have fixed gratuity and still have absolutely extraordinary service.
Many of the very best restaurants in the country have fixed gratuity and still have absolutely extraordinary service.
And when the service is relatively bad, ie too slow to come probably because they didn't have enough personnel in the kitchen this particular night (happenned to me yesterday), i don't tip, AND i don't feel bad for the waitress who isn't responsible for the lack of professionnal cook, because they are paid correctly.
What country are you referring to? Tipping is considered rude in Japan and the service there is almost always better than the service I get in the US for a comparable job.
Some how the country hasn't collapsed and all the hotels, restaurants, bars, etc continue to operate just fine and with good service.
Some how the country hasn't collapsed and all the hotels, restaurants, bars, etc continue to operate just fine and with good service.
I live in Japan, and this depends completely on your perspective and expectations.
The OP would disagree with you.
In the US, it's normal to have a server hovering around your table, and frequently "checking up" on you to see if you need anything. They frequently will interrupt your conversation to ask you if you're OK. Some people would find this annoying, but Americans like the OP love this kind of service.
In Japan, no one is going to come around to your table to see how you're doing, or to take your order. You need to flag them down: raising your hand, pressing a button on the table, yelling "sumimasen!" etc are all pretty normal.
Also, in Japan the service is extremely professional and courteous. The server will not tell you how their day is going or anything else about their life. Americans don't like this: they want the server to act like their best friend and chit-chat with them for several minutes. Japanese servers will never do this: they take your order and then go do other work.
Overall, the amount of service in a typical Japanese is much less than in America. It's one of the reasons it costs less to eat here. Instead of a huge waitstaff standing around ready to attend to customers, there might be just one server in the whole restaurant, and he also mans the cash register, and does various other things while not doing those. That doesn't happen in America. So of course the hourly labor cost to run a restaurant in America is huge with all these people, whereas in Japan you might only need 2-3 people to run the whole place.
Americans like the OP simply won't be happy with the kind of service offered here. It's minimalist and highly efficient, and not at all "warm" or "friendly" like they're used to in America.
The OP would disagree with you.
In the US, it's normal to have a server hovering around your table, and frequently "checking up" on you to see if you need anything. They frequently will interrupt your conversation to ask you if you're OK. Some people would find this annoying, but Americans like the OP love this kind of service.
In Japan, no one is going to come around to your table to see how you're doing, or to take your order. You need to flag them down: raising your hand, pressing a button on the table, yelling "sumimasen!" etc are all pretty normal.
Also, in Japan the service is extremely professional and courteous. The server will not tell you how their day is going or anything else about their life. Americans don't like this: they want the server to act like their best friend and chit-chat with them for several minutes. Japanese servers will never do this: they take your order and then go do other work.
Overall, the amount of service in a typical Japanese is much less than in America. It's one of the reasons it costs less to eat here. Instead of a huge waitstaff standing around ready to attend to customers, there might be just one server in the whole restaurant, and he also mans the cash register, and does various other things while not doing those. That doesn't happen in America. So of course the hourly labor cost to run a restaurant in America is huge with all these people, whereas in Japan you might only need 2-3 people to run the whole place.
Americans like the OP simply won't be happy with the kind of service offered here. It's minimalist and highly efficient, and not at all "warm" or "friendly" like they're used to in America.
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I'm all for that - and then you can tip in addition when you have a request that is above and beyond.
(Many restaurants I'm seeing have "18% gratuity automatically added" and yet still have a tip line for those who don't read.)
(Many restaurants I'm seeing have "18% gratuity automatically added" and yet still have a tip line for those who don't read.)
If you assume labor is 50% of the cost of a coffeeshop, and maybe only 30-40% of the cost when you factor out management, prices would have to go up only 6-7%.
And remember, you are assuming a zero-net-revenue change.
Maybe your former non-tipping customers would see that 6-7% increase and leave, but your former tipping customers (who may be price sensitive, but tipped because they believe in it) would see a decrease in pricing, from a 20% gratuity reduced to a 6-7% price overhead. And some of them would probably still tip anyway.
And remember, you are assuming a zero-net-revenue change.
Maybe your former non-tipping customers would see that 6-7% increase and leave, but your former tipping customers (who may be price sensitive, but tipped because they believe in it) would see a decrease in pricing, from a 20% gratuity reduced to a 6-7% price overhead. And some of them would probably still tip anyway.
That's probably true. But so what? That just means that everybody pays the same amount rather than varying amount based on cultural norms around tipping. That's good! And it also means that bosses can't hide behind "oh, tips were just low this week" when their employees complain about pay.
> Why cant we just give employees dignity and a fair wage?
Apropos of nothing, I’ll just mention that the Fed is currently trying to decrease employment [1] and eliminate people’s savings [2].
[1] https://www.forbes.com/sites/jackkelly/2022/08/27/fed-chair-...
[2] https://twitter.com/schwarz/status/1587873284997218304
Apropos of nothing, I’ll just mention that the Fed is currently trying to decrease employment [1] and eliminate people’s savings [2].
[1] https://www.forbes.com/sites/jackkelly/2022/08/27/fed-chair-...
[2] https://twitter.com/schwarz/status/1587873284997218304
You are being downvoted because this is largely unrelated to the topic at hand.
It’s not. The point is that there’s an incentive among those who control capital to prevent most people from being financially secure. It’s why (for example) the tipped minimum wage exists, and why wage theft is rarely (if ever) prosecuted or covered in the news even though the amount of money stolen is orders of magnitude larger than the amount shoplifted.
> Deadweight loss happens when a person who is willing to pay more is charged less than the amount they're willing to pay.
> Tom is willing to pay $6 for coffee and the shop only charges him $4, the deadweight loss is $2.
That is a consumer surplus, not deadweight loss.
> Tom is willing to pay $6 for coffee and the shop only charges him $4, the deadweight loss is $2.
That is a consumer surplus, not deadweight loss.
Came here to point that out as well. Deadweight loss is when the consumer surplus is lost because they are eaten by additional costs like taxes.
The argument the article makes is indeed a bit blunt.
The idea here is that tipping enables better price discrimination, which in turn allows a higher "quantity" of coffee to be produced. With coffee shops that "quantity" will translate to things like 1) higher density or 2) more attractive placement of coffee shops, both of which increase coffee consumption by making it easier to pick one up, or 3) higher quality (think small batch) coffee being produced, which increases the quantity of labor being sold in a cup.
I still don't enjoy this tipping culture, but the argument being made makes sense when you fill in the details.
The idea here is that tipping enables better price discrimination, which in turn allows a higher "quantity" of coffee to be produced. With coffee shops that "quantity" will translate to things like 1) higher density or 2) more attractive placement of coffee shops, both of which increase coffee consumption by making it easier to pick one up, or 3) higher quality (think small batch) coffee being produced, which increases the quantity of labor being sold in a cup.
I still don't enjoy this tipping culture, but the argument being made makes sense when you fill in the details.
Places without enforced tipping culture still seem to have decent amount of coffee places.
Indeed. Some credibility has been lost as well, given the source of TFA.
Is there any empirical backing for this narrative? Some of this reads as pretty counter to intuition.
Most suspicious in my mind is the core presupposition (not a contention, a presupposition--the article doesn't even argue for it!) that rich people will step up to the opportunity to fulfill their noble obligation to give more to the less wealthy. Having known some pretty stingy wealthy people (and some very generous blue-collar people), it's not obvious to me that this is true.
Most suspicious in my mind is the core presupposition (not a contention, a presupposition--the article doesn't even argue for it!) that rich people will step up to the opportunity to fulfill their noble obligation to give more to the less wealthy. Having known some pretty stingy wealthy people (and some very generous blue-collar people), it's not obvious to me that this is true.
Having owned a bar in the past I can tell you right now the most wealthy people either didn't tip at all or very little. Fellow service industry people tipped the best.
I would argue it's more likely that most wealthy people that are the type to let you know they're wealthy either didn't tip at all or very little. There's plenty of wealthy people that tip very well, but many of them don't flaunt it in any way.
I figured this would be a response. I knew just about everyone pretty well, it was in a very nice area of town and is a small rural community.
Interesting. I haven't seen this in the areas I've lived in. I wonder if it's more of a "big fish" type thing, where people that are the "big fish" in an area tend to tip worse (and expect people to be impressed / overly thankful when they tip well). If you're in a small area, people that are wealthy may very well map to the people that consider themselves to be the big fish. For areas with a higher population, being wealthy is much more common, so doesn't really mark one as "special" in the same way.
How can you tell? Most wealthy people - in my experience - don't dress the part.
In my case I delivered pizzas, and a person's house is often (though importantly not always) an indicator.
My experience was that wealth doesn't seem to matter much for tipping. When I first started I always hoped for the order to the big houses, but as I gained experience I realized it really doesn't matter. Some wealthy people gave generously, as did many poorer people. One of my favorite customers was an illegal immigrant living in a trailer park. Every time I delivered it was a $5 tip (which in those days was a great tip). On a side note, when an order for this guy came up I always made sure the cooks did a great job, and I took his order first.
My experience was that wealth doesn't seem to matter much for tipping. When I first started I always hoped for the order to the big houses, but as I gained experience I realized it really doesn't matter. Some wealthy people gave generously, as did many poorer people. One of my favorite customers was an illegal immigrant living in a trailer park. Every time I delivered it was a $5 tip (which in those days was a great tip). On a side note, when an order for this guy came up I always made sure the cooks did a great job, and I took his order first.
Because the poor know best the value of 5$? Even if often they wouldn't afford tipping. But the wealthy won't really know that, 5$ would be nothing for them so why bother tipping. Unless they actually care about the delivery guy, an attitude which is definitely not a given - some would also think that "poor deserve it for not working hard like us" so again why tipping a "slacker"...
From my pizza delivery experience...there are different kinds of rich people. Some people are rich because their parents were rich, or they married someone rich, or some other random reason.
They have no idea about money. It's a banana, how much could it cost, ten dollars? They just have no idea. None. I couldn't even have gotten mad if they didn't tip or gave a shitty tip, young man yells at sky.
Then you could deliver to the same house and someone else answers and it's the person that started the business that paid for the house, and they will tip. Because they know how to motivate workers, and that's money. In my ancient pizza delivering days 2 dollars was a good tip, 3 dollars meant the next time I'm out on a run with three stops, yours is the first. If you don't tip, Greg gets your order. Greg's the kid that only got hired because his dad is friends with the owner, and he tends to get lost and we have to send someone out to rescue him.
Money makes the world go around.
They have no idea about money. It's a banana, how much could it cost, ten dollars? They just have no idea. None. I couldn't even have gotten mad if they didn't tip or gave a shitty tip, young man yells at sky.
Then you could deliver to the same house and someone else answers and it's the person that started the business that paid for the house, and they will tip. Because they know how to motivate workers, and that's money. In my ancient pizza delivering days 2 dollars was a good tip, 3 dollars meant the next time I'm out on a run with three stops, yours is the first. If you don't tip, Greg gets your order. Greg's the kid that only got hired because his dad is friends with the owner, and he tends to get lost and we have to send someone out to rescue him.
Money makes the world go around.
> How can you tell?
What kind of credit card they have. How they decide what to order. Their mannerisms.
Even the most low-key wealthy people act differently than poor people. Spend enough time around both and you can tell, even if they're dressed identical.
What kind of credit card they have. How they decide what to order. Their mannerisms.
Even the most low-key wealthy people act differently than poor people. Spend enough time around both and you can tell, even if they're dressed identical.
This leaves me wondering what percentage of a typical service industry worker's salary is usually spent on tipping, and whether it couldn't be the case that if they stopped giving and taking tips entirely they would be better off in aggregate. I guess it depends on what fraction of their income is spent on "tippable" expenses.
I know that in my own case there was a period in grad school where it was only slightly below 50%, implying that almost 10% of my wages were spent on tips... what exactly are the "best" tip percentages that service industry people leave like?
I know that in my own case there was a period in grad school where it was only slightly below 50%, implying that almost 10% of my wages were spent on tips... what exactly are the "best" tip percentages that service industry people leave like?
I'm curious how you determined whether or not someone was "wealthy."
Seems anecdotally true to me that middle class+ people will mindlessly accept the 20% default grat, and budget-conscious people don't.
This is exactly how I think about tipping. I, and many friends and family, worked retail and food service jobs when we were young. Now I’m professionally successful and will not miss a couple extra bucks on a cup of coffee. So I’m happy to help boost the person serving it to me. I know it means way more to them than it does to me.
This also explains why people (including me) get SO MAD if they find out that tips don’t actually go fully and directly to staff. See: DoorDash.
This also explains why people (including me) get SO MAD if they find out that tips don’t actually go fully and directly to staff. See: DoorDash.
The way you describe it sounds like a micro trickle-down wealth redistribution rather than making sure someone has a fair wage.
Personally I find this really frustrating. You're not paid fairly for your labor. You only achieve a living wage through the generosity of those "happy to help boost" me. In my mind that reinforces a power dynamic between the "professionally successful" and those in the service industry. If I get a tip that raises my wage to something I can live off, now I must be profusely thankful to the person that donated their money to me.
I may be isolated in that opinion. I understand many service industry workers prefer tipping. For my personality though it's distressing.
Personally I find this really frustrating. You're not paid fairly for your labor. You only achieve a living wage through the generosity of those "happy to help boost" me. In my mind that reinforces a power dynamic between the "professionally successful" and those in the service industry. If I get a tip that raises my wage to something I can live off, now I must be profusely thankful to the person that donated their money to me.
I may be isolated in that opinion. I understand many service industry workers prefer tipping. For my personality though it's distressing.
Employees like tipping because it gives them greater control over their earnings. If they handle customers efficiently, if they sell hard, they can make more money. And they can take it home that day if they are receiving tips in cash.
And business owners like tipping because it aligns the employees' interests with their own: bringing in as much revenue as possible.
There are U.S. food service jobs without tipping, for example fast food chains or school cafeteria workers. Do these folks have higher pay as a result? Generally no.
And business owners like tipping because it aligns the employees' interests with their own: bringing in as much revenue as possible.
There are U.S. food service jobs without tipping, for example fast food chains or school cafeteria workers. Do these folks have higher pay as a result? Generally no.
I used to work shipping & receiving, where I got minimum wage, and didn't get a tip for anything. That's why I'm happy to let people working retail & food service jobs just do the work for their wage.
See how that works?
See how that works?
No, I don't. I don't understand that mindset at all.
It wasn't just when I was older that the tips were expected, it was still expected while I was making minimum wage.
People working in restaurants in the US have a lower minimum wage than the rest of the country. So letting them do their work for like $3/hr doesnt really cut it
This is a common misunderstanding. Tipped workers still make at least the full federal minimum wage no matter what, just their employer may not be paying more than $2.13 of it if tips are sufficient. It's still not exactly the same (and minimum wage being enough for anyone is a separate issue) but the fallback is the same minimum wage.
[0] https://www.dol.gov/general/topic/wages/wagestips
[0] https://www.dol.gov/general/topic/wages/wagestips
No, they do not. The employee is still owed the minimum wage, whether it be via tips or their employer if the tips do not add up to minimum wage.
Also, quite a few jurisdictions do not have tipped minimum wages anymore.
https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
Also, quite a few jurisdictions do not have tipped minimum wages anymore.
https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
I always thought tips was on top of minimum wage but sounds like it is more sponsoring/helping the employer to pay it's employees instead of an extra to the employee.
Money is fungible, so it would always be helping the employer pay an employee.
When a person decides to become a waiter versus a cook or a janitor, they are including potential income due to tips and lack of tips in their calculations. Thereby, the potential of tips always reduces the need for an employer to pay more.
When a person decides to become a waiter versus a cook or a janitor, they are including potential income due to tips and lack of tips in their calculations. Thereby, the potential of tips always reduces the need for an employer to pay more.
That seems like a problem worth addressing.
I'm a firm believer in better salaries rather than pushing the burden of sustaining an employee directly onto the customer by keeping an air of shame if you don't follow the "accepted tipping guidelines".
Whenever I've been to the USA I feel I'm being scammed every time I'm required to tip. I know it's your culture but it feels like an emotional extortion, if I don't tip I have to bear the weight of an underpaid employee not making ends meet because I don't think it was fair to see a price and then have to mentally add "20%" just because someone served me.
Worse, for me this culture makes me very uncomfortable by the level of service, I can tell when a waiter is miserable and just fake smiling to get me to tip more. When a waitress is over-the-top charming and nice while being berated by the kitchen staff for a misplaced order, etc.
It just makes every service I get feel fake and forced, to the point where I've avoided going to eat somewhere on days I'm exhausted because I don't want to deal with that weight on top.
I'd much rather just pay 20% over the price and know that the staff is well paid.
Tipping culture just opens a can of worm of abuses...
Whenever I've been to the USA I feel I'm being scammed every time I'm required to tip. I know it's your culture but it feels like an emotional extortion, if I don't tip I have to bear the weight of an underpaid employee not making ends meet because I don't think it was fair to see a price and then have to mentally add "20%" just because someone served me.
Worse, for me this culture makes me very uncomfortable by the level of service, I can tell when a waiter is miserable and just fake smiling to get me to tip more. When a waitress is over-the-top charming and nice while being berated by the kitchen staff for a misplaced order, etc.
It just makes every service I get feel fake and forced, to the point where I've avoided going to eat somewhere on days I'm exhausted because I don't want to deal with that weight on top.
I'd much rather just pay 20% over the price and know that the staff is well paid.
Tipping culture just opens a can of worm of abuses...
Another issue with DoorDash and GrubHub is that I am supposed to tip BEFORE delivery. I do that but most of the time my orders get delivered to a wrong building because drivers don't seem to read my delivery instructions.
I wish I could tip them directly after the delivery, but I am concerned that no one would pick up my order if I set the tip to $0 in the app.
I wish I could tip them directly after the delivery, but I am concerned that no one would pick up my order if I set the tip to $0 in the app.
This is why I always try to tip in cash, even when paying with a credit card. Higher chance of the tip actually going to the worker(s) and not their managers.
Me too. And I don't spend much time calculating either. Always round up, because you rarely get the opportunity to be a hero for $1.
Not defending what DD was doing there but whether it directly goes to the driver/server/cashier or not, you're still implicitly giving that money to the store owner/delivery company/restaurant by allowing them to get away with poor pay.
> If a coffeeshop wants to pay their employees more they will have to raise prices
This does not follow purely from the facts presented. Consider: "If a coffee shop wanted to pay their employees more, the coffee shop itself might take a smaller cut and keep prices the same."
This does not follow purely from the facts presented. Consider: "If a coffee shop wanted to pay their employees more, the coffee shop itself might take a smaller cut and keep prices the same."
In practice coffee shops have tiny margins so they can’t afford to do that.
I refuse to believe that bean water has tiny margins.
The bean water has huge margins but is only a tiny part of the expenses.
I also hate tipping everywhere, but coffee shops might also like to adjust their prices slightly for customers that don’t mind paying a bit more for well paid staff and for those customers to whom price is a major concern when choosing where to purchase their coffee.
Dynamic pricing makes some sense in the concept of trying to capture maximum demand, it just feels horrible as a customer.
Dynamic pricing makes some sense in the concept of trying to capture maximum demand, it just feels horrible as a customer.
we are not machines, if i'm paying more (or even less) than the person in front of me at the line:
1- I'll make a scene
2- I'll never come back
3- It is probably a discrimination lawsuit waiting to happen
1- I'll make a scene
2- I'll never come back
3- It is probably a discrimination lawsuit waiting to happen
I mean, this is what is happening with the dynamic tipping system and none of these things appear to be happening.
There's a critical difference between dynamic pricing and tipping: one is optional, the other is not. That makes a huge difference in the psychology.
Ok, you can replace dynamic pricing with dynamic tipping in my original comment if that makes it more comprehensible for you.
Because it is thinly veiled as a customer-choice.
Again, not saying the outcome is different, but socially it won't be accepted, as it removes that veil.
Again, not saying the outcome is different, but socially it won't be accepted, as it removes that veil.
They also have $6 cups of coffee.
I'll reiterate: the resolution is an answer to a question of whether it is true that "if a coffeeshop wants to pay their employees more they will have to raise prices".
If you have a defense (or a response where the phrase "in practice" appears anywhere, really), then that's a separate matter, but it does not follow strictly from the matters presented that the coffee shop "will have to raise prices" in order to pay their employees more. That's, in fact, a stronger claim than the factorable defense that the author (and others who make the same argument) is depending on.
In other words, both "have to" and "can't" are doing a lot of heavy lifting.
If you have a defense (or a response where the phrase "in practice" appears anywhere, really), then that's a separate matter, but it does not follow strictly from the matters presented that the coffee shop "will have to raise prices" in order to pay their employees more. That's, in fact, a stronger claim than the factorable defense that the author (and others who make the same argument) is depending on.
In other words, both "have to" and "can't" are doing a lot of heavy lifting.
Lol foodservice margins are already miniscule. No, you'll pay more.
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I can see that for restaurants, the price of a good portion of meat at home isn't all that cheaper, but for coffee shops? That $6 lattee probably cost them thirty cents of milk sugar and beans and less than a dollar in labor to put in front of you.
If I were to facepalm any harder I'd knock myself out... This is legit among the worst takes I've ever heard.
Edit - especially puzzling to hear since software has little to no marginal costs and is almost all capital costs and labour.
First of all, typical rent for a coffee shop sized space in a major city is around $8-10k per month. So factor that in.
Second, baristas don't get paid on demand... They get paid hourly times how many hours they work. In a tight labour market, assume $20 per hour times 8 hours per day for EACH barista. 2 baristas, that's $360 per day in labour costs alone. So you need to sell around 70 lattes per day just to break even on labour, nevermind rent or recovering capital costs.
So capital costs. A typical commercial espresso machine is $20k. But let's talk about the whole buildout. Coffee shops don't need a full commercial kitchen but there's still coffee machines, oven or panini, plumbing, electrical, decor, refrigeration, etc... So let's say $200 per square foot (versus $400 for a typical restaurant). Times let's say 2000 square feet. That's $400k. That needs to be recovered over the course of the lease just to BREAK EVEN. Nevermind to actually make the business worthwhile.
When you go for a latte or go out to eat you're not paying only the marginal cost of your product, you're paying for everything that went into making it possible to produce that product.
Honestly people don't deserve restaurants. Just make your coffee at home.
Edit - this is like thinking when you buy an iPhone you pay only for the raw materials, not all the investment into factories/equipment and engineers to make it work...
Edit - especially puzzling to hear since software has little to no marginal costs and is almost all capital costs and labour.
First of all, typical rent for a coffee shop sized space in a major city is around $8-10k per month. So factor that in.
Second, baristas don't get paid on demand... They get paid hourly times how many hours they work. In a tight labour market, assume $20 per hour times 8 hours per day for EACH barista. 2 baristas, that's $360 per day in labour costs alone. So you need to sell around 70 lattes per day just to break even on labour, nevermind rent or recovering capital costs.
So capital costs. A typical commercial espresso machine is $20k. But let's talk about the whole buildout. Coffee shops don't need a full commercial kitchen but there's still coffee machines, oven or panini, plumbing, electrical, decor, refrigeration, etc... So let's say $200 per square foot (versus $400 for a typical restaurant). Times let's say 2000 square feet. That's $400k. That needs to be recovered over the course of the lease just to BREAK EVEN. Nevermind to actually make the business worthwhile.
When you go for a latte or go out to eat you're not paying only the marginal cost of your product, you're paying for everything that went into making it possible to produce that product.
Honestly people don't deserve restaurants. Just make your coffee at home.
Edit - this is like thinking when you buy an iPhone you pay only for the raw materials, not all the investment into factories/equipment and engineers to make it work...
Anywhere you read suggests margins are a lot higher on cafes than restaurants so my point stands I think. I've also been seeing figures like 80 cents thrown around for the true cost of a latte with $7lb beans and $3gal milk, cup included, not rent though. All businesses bear overhead costs, but at least you can sell your used espresso machine for the price you paid for it when your cafe tanks and can get away with staffing one or two people for most of your working hours. 70 orders a day would be easy to hit I would think for a cafe; from my cursory research independent cafes average 250-300 cups a day while your starbucks or places as busy as them might be pushing 600 cups a day.
https://www.macrotrends.net/stocks/charts/SBUX/starbucks/pro...
Starbucks margin is 10%... And they're the biggest, most profitable and among the most sophisticated operators.
It's hilarious that you're still arguing about COGS when I plainly spelled out what the biggest actual costs are...
Starbucks margin is 10%... And they're the biggest, most profitable and among the most sophisticated operators.
It's hilarious that you're still arguing about COGS when I plainly spelled out what the biggest actual costs are...
> It's hilarious that you're still arguing about COGS when I plainly spelled out what the biggest actual costs are...
That's not exactly out of trend, considering how this subthread began.
You wrote:
> No, you'll pay more
... when that was not the question. The question was whether "they will have to raise prices" is accurate.
(If the author had omitted "have to" and just wrote "if a coffeeshop wants to pay their employees more then they will raise prices" (as you more or less have done here), then that would be fine. There's a reason they didn't, though. Inserting the "have to" is a rhetorical sleight of hand. It's a form of hyperbole that makes it sound like the price increase is an unavoidable consequence that follows naturally from the facts and a set of common logical axioms, even though it doesn't.)
The other commenter's choosing to argue about cost of goods, even though that isn't the issue you're prosecuting, is a lot like your choosing to argue that they will raise prices, even though that wasn't the issue I was prosecuting.
That's not exactly out of trend, considering how this subthread began.
You wrote:
> No, you'll pay more
... when that was not the question. The question was whether "they will have to raise prices" is accurate.
(If the author had omitted "have to" and just wrote "if a coffeeshop wants to pay their employees more then they will raise prices" (as you more or less have done here), then that would be fine. There's a reason they didn't, though. Inserting the "have to" is a rhetorical sleight of hand. It's a form of hyperbole that makes it sound like the price increase is an unavoidable consequence that follows naturally from the facts and a set of common logical axioms, even though it doesn't.)
The other commenter's choosing to argue about cost of goods, even though that isn't the issue you're prosecuting, is a lot like your choosing to argue that they will raise prices, even though that wasn't the issue I was prosecuting.
> assume $20 per hour times 8 hours per day for EACH barista. 2 baristas, that's $360 per day
No, it isn't.
No, it isn't.
Yes, my bad. Arithmetic error, $320, happy? Happens when you have a 3 month old and get no sleep.
The point is that COGS is *NOT* the important cost to consider for a cafe. Starbucks' financial reports corroborate all the things I've said regardless. Amortisation and depreciation, real estate, labour, etc... are all more significant costs than ingredients.
The point is that COGS is *NOT* the important cost to consider for a cafe. Starbucks' financial reports corroborate all the things I've said regardless. Amortisation and depreciation, real estate, labour, etc... are all more significant costs than ingredients.
I think the expansion of tipping, to the point where every point-of-sale machine is asking for it, is a dark pattern. I highly doubt that those tips go directly to employees, like restaurant tips would, but almost certainly directly to the shop.
I'm cynical but I see these new places where tipping has showed up as a way shopowners backhandedly raise prices and depress employee wages. And given that there is basically no human interaction, not even eye contact involved in the transaction, I'm not doing it.
I'm cynical but I see these new places where tipping has showed up as a way shopowners backhandedly raise prices and depress employee wages. And given that there is basically no human interaction, not even eye contact involved in the transaction, I'm not doing it.
Being slightly more cynical now, I'm wondering if this push is merely the payment processor realizing they could increase their cut by shaming the customer into paying more.
And I don't believe we can measure this purely financially, as simply not tipping in a coffeeshop with a tablet now comes with a bigger sentiment of shame, which is especially levied on the ones for which that extra 20% actually matters.
And I don't believe we can measure this purely financially, as simply not tipping in a coffeeshop with a tablet now comes with a bigger sentiment of shame, which is especially levied on the ones for which that extra 20% actually matters.
I always assumed that was it. The tip for paying at a counter started when clover and other touch tablet point of sale systems came around.
Some genius figured out that asking people to write down a tip on a receipt and signing it was too much friction and off putting, but on a touch screen, where a tap takes a fraction of a second and zero effort, at least some people would not mind hitting the tip button.
And it worked beautifully.
Some genius figured out that asking people to write down a tip on a receipt and signing it was too much friction and off putting, but on a touch screen, where a tap takes a fraction of a second and zero effort, at least some people would not mind hitting the tip button.
And it worked beautifully.
Also there is the psychological factor of the staff member watching the ipad screen the entire time, and looking at it again immediately after you are done. Like are you going to put zero and have them think "Fuck you cheap asshole" or are you going to be guilt tripped into throwing $3 away that the staff member might not even see? It taps into the same moral dilemma as a beggar accosting you on the street.
Arguing that new (or newly-conspicuous) PoS tipping is just a way to get price-insensitive spenders to pay more ignores the social dynamic which will cause many price-conscious customers to tip when they can’t really afford to or else to not tip and feel uncomfortable.
In either case, these price-conscious customers are less likely to come back. But since this PoS tipping trend seems strongest in hip, gentrified shops, maybe they aren’t interested in having less well-off customers in the first place.
In either case, these price-conscious customers are less likely to come back. But since this PoS tipping trend seems strongest in hip, gentrified shops, maybe they aren’t interested in having less well-off customers in the first place.
>new (or newly-conspicuous) PoS tipping
Increasingly, in the US, people don't carry cash/coins with them. I might have a "just in case" $20 or two but I mostly don't have currency to cash tip which is probably one reason you see it appearing more on PoS devices.
Increasingly, in the US, people don't carry cash/coins with them. I might have a "just in case" $20 or two but I mostly don't have currency to cash tip which is probably one reason you see it appearing more on PoS devices.
I feel like its just a feature thats on with default settings than a careful analysis of cash on hand of the average american by the restaurant owner. Anecdotally, you are more likely to have cash on hand if you frequent street food or weed dispensaries so it probably varies by local culture quite a lot.
But the cost of carrying deadweight by shaming is not going to work forever. I have been shaming myself and clicking lowest % shown in the screen but this past weekend I finally said no and clicked on 0%. Was not a restaurant just to pick up something pre ordered forget where.
Of the dozens and dozens of times I've smiled and happily tapped 0% or No Tip, I've never had the cashier say a thing.
I did four years of minimum wage work at McDonalds. The only time I can remember getting tipped was when I jumped out the window after a $50 the guy had dropped. He let me keep the $10 change.
If people running a drive-thru for 12h without a break don't deserve tips, I don't see why the people pouring coffee in a trendy cafe like the author describes would.
I did four years of minimum wage work at McDonalds. The only time I can remember getting tipped was when I jumped out the window after a $50 the guy had dropped. He let me keep the $10 change.
If people running a drive-thru for 12h without a break don't deserve tips, I don't see why the people pouring coffee in a trendy cafe like the author describes would.
>If people running a drive-thru for 12h without a break don't deserve tips, I don't see why the people pouring coffee in a trendy cafe like the author describes would.
Exactly why I don't tip at coffee shops or to-go places. For waiters and delivery guys, that's part of the deal. But I guiltlessly hit 0 everywhere else.
I'm only not even sure who gets the tips at some places. Like I go pick up a to-go order and I tip 10 bucks. Who is getting it? The person who packed it up? The person who handed it to me? The boss? I have no clue.
Exactly why I don't tip at coffee shops or to-go places. For waiters and delivery guys, that's part of the deal. But I guiltlessly hit 0 everywhere else.
I'm only not even sure who gets the tips at some places. Like I go pick up a to-go order and I tip 10 bucks. Who is getting it? The person who packed it up? The person who handed it to me? The boss? I have no clue.
Exactly. Nothing makes sense in the end when you think about it.
Paying the number a seller asks you to pay and you agree to pay makes sense.
Nothing about "tipping" makes sense
I think it's a US thing. I came from Bolivia and never once tipped anywhere outside of restaurants. No, I won't tip you for packaging 4 cookies in a box at Crumbl Cookies lol.
Not just packaging, it also tips the baker.
How is a customer supposed to know that?
Why would a customer automatically assume the opposite?
I assume a tip jar sitting at the front of the house goes to the front of the house staff, honestly. Especially at bakeries, the baker comes in at midnight and is gone by 4am, there's no sense you are interacting with the baker nor any guarantees that the front of house staff will leave a pile of money behind for the bakers at midnight to distribute amongst themselves.
[deleted]
Why should the Baker expect to receive alimony?
The intent is not to reward a task. It's a nod of appreciation that there is even an employee that's willing to show up to work and service you. You give them a dollar.
At least that's how I look at it. I'm not a fan either just articulating my attitude towards it.
At least that's how I look at it. I'm not a fan either just articulating my attitude towards it.
If the business can't get employees to show up based upon the advertised prices then it should shut down.
Come inside and get a boba for $7! Then you go inside and they're like please give us $9 plus tax and if you actually want boba in it that's extra.
Come inside and get a boba for $7! Then you go inside and they're like please give us $9 plus tax and if you actually want boba in it that's extra.
That's not at all how tipping was intended though.
Tipping started as a way to express thanks for someone going above and beyond in their duties. It's devolved into a way for employers to pay less and shift the cost directly to customers via guilt at the cash register.
Tipping started as a way to express thanks for someone going above and beyond in their duties. It's devolved into a way for employers to pay less and shift the cost directly to customers via guilt at the cash register.
AFAIK, but it could be wrong, it was basically racism. https://www.nytimes.com/2021/02/05/opinion/minimum-wage-raci...
When I see a construction crew fixing the road, I stop and shove a dollar in each of their pockets, and then I continue on my way.
Luckily, my employer’s clients also give me a few dollars each time I see them, so I do not have to to the bank that often to get change.
Luckily, my employer’s clients also give me a few dollars each time I see them, so I do not have to to the bank that often to get change.
> employee that's willing to show up to work and service you
So you tip the cashier at the supermarket? They bag your groceries for you
So you tip the cashier at the supermarket? They bag your groceries for you
I've noticed quite recently in the last 4-5 years that this isn't true anymore. More and more grocery stores I shop at expect you to bag your own groceries. Its been a wild shift in labor there to me.
When I was growing up I worked at a big box retail grocery and I don't remember ever having customers bag their own items unless it was self checkout (which was barely a thing and truly seemed relegated to simple checkouts).
Now the only place I don't have to actively bag my own things is Costco, which recently started heavily pushing their own self checkout (which, due to how items are sized there to be in bulk, makes things slow and awkward for the general public IMO).
This luxury is dying.
When I was growing up I worked at a big box retail grocery and I don't remember ever having customers bag their own items unless it was self checkout (which was barely a thing and truly seemed relegated to simple checkouts).
Now the only place I don't have to actively bag my own things is Costco, which recently started heavily pushing their own self checkout (which, due to how items are sized there to be in bulk, makes things slow and awkward for the general public IMO).
This luxury is dying.
I even remeber being scolded sometimes years ago for bagging my own stuff when there wasn't a second worker to do it. At some point in COVID, Trader Joe's got extra strict about it, even as I pointed out it meant more people touching my groceries "for my safety". Now they really don't seem to care.
> Now the only place I don't have to actively bag my own things is Costco, which recently started heavily pushing their own self checkout (which, due to how items are sized there to be in bulk, makes things slow and awkward for the general public IMO).
At my local Costco, the "self-checkout" is really more like 6 cashier lines manned by one cashier. We have to wait for the employee to do everything and it's really bizarre to me, and either type of checkout just leaves things sitting in your cart in the end unless you manually box/bag them after. People seem to prefer it to the normal lanes, though. Is yours more like the self checkout at a normal grocer?
> Now the only place I don't have to actively bag my own things is Costco, which recently started heavily pushing their own self checkout (which, due to how items are sized there to be in bulk, makes things slow and awkward for the general public IMO).
At my local Costco, the "self-checkout" is really more like 6 cashier lines manned by one cashier. We have to wait for the employee to do everything and it's really bizarre to me, and either type of checkout just leaves things sitting in your cart in the end unless you manually box/bag them after. People seem to prefer it to the normal lanes, though. Is yours more like the self checkout at a normal grocer?
Mine appears to be similar to that of grocery stores.
I also happen to have a Sam's Club membership (for now, really weighing whether its worth having since Costco has become even better in my area in terms of what they stock) and they have a nifty thing I actually like, which is you can check out via your phone, so you just scan the items as you put them in the cart, and then pay at the end. The only thing you have to do is show the generated QR code receipt to the door person.
Since I have been bringing my own bags / storage to stores like this for years anyway, its perfect for me, I just scan and bag as I go, and its bagged how I like it to be (IE, cold things are actually in my cold bag, and I have this accordion fold out I can put everything else in, its super nice when I get home) and genuinely faster. It lets me optimize the experience for me without bogging anyone else down either.
This kind of self-checkout I like, the app driven version. I hate all other versions for any other shopping. I really hope Costco adopts this in their app. Honestly, grocery stores would do well to adopt something similar IMO
I also happen to have a Sam's Club membership (for now, really weighing whether its worth having since Costco has become even better in my area in terms of what they stock) and they have a nifty thing I actually like, which is you can check out via your phone, so you just scan the items as you put them in the cart, and then pay at the end. The only thing you have to do is show the generated QR code receipt to the door person.
Since I have been bringing my own bags / storage to stores like this for years anyway, its perfect for me, I just scan and bag as I go, and its bagged how I like it to be (IE, cold things are actually in my cold bag, and I have this accordion fold out I can put everything else in, its super nice when I get home) and genuinely faster. It lets me optimize the experience for me without bogging anyone else down either.
This kind of self-checkout I like, the app driven version. I hate all other versions for any other shopping. I really hope Costco adopts this in their app. Honestly, grocery stores would do well to adopt something similar IMO
Baggers were common at one point. Then there was a period when they were uncommon. And they came back in again at some point for the most part. (Except for self-checkout.)
In general, assuming that minimum wage-ish jobs have a continued labor shortage, I'd expect that we'll see more self-service and automation going forward.
In general, assuming that minimum wage-ish jobs have a continued labor shortage, I'd expect that we'll see more self-service and automation going forward.
I would expect more of that as the population pyramid skews older and older and supply of lower price labor decreases.
At least here in Vancouver, if I have my own reusable bag, I have to bag it. But if I ask them for a bag, they'll bag the items for me
How about the business they work for show their “appreciation” and pay them
Yeah, fair enough.. I don't like it though. That's why I work at FAANG for a high salary instead of randomly fixing open source bugs and jingling my Patreon jar at people
lol i thought my buying cookies was the goal of the business.
I showed up and wrote some software. Should my customers tip me too?
If tipping actually resulted in better service, maybe there'd be a reason to keep it. But, certainly anecdotally, it doesn't. Service in the US hasn't been any better for me than service in nations that don't tip, or tip much less.
If tipping actually resulted in better service, maybe there'd be a reason to keep it. But, certainly anecdotally, it doesn't. Service in the US hasn't been any better for me than service in nations that don't tip, or tip much less.
Cash tips seem like the way to go primarily because you're not relying on the employer to calculate and distribute them to line employees and because they're not being reported as income and taxed.
That might not be the "law", but that's pretty much de-facto what happens everywhere.
That might not be the "law", but that's pretty much de-facto what happens everywhere.
> they're not being reported as income and taxed.That might not be the "law", but that's pretty much de-facto what happens everywhere
In other words, it punishes the most virtuous; those higher on the spectrum unscrupulousness benefit the most. Not a good arrangement.
In other words, it punishes the most virtuous; those higher on the spectrum unscrupulousness benefit the most. Not a good arrangement.
For tipped employees, most of whom are getting all their federal and state taxes back at refund time, giving them the money directly does nothing other than increase efficiency of the overall system because you cut a party out of it.
It also doesn't create a cash flow problem, which lower income people are more susceptible to. Even if you claim that most of these employees would get this money back in a tax refund, that doesn't help if they have bills to pay month-to-month.
That's not a response to what was written.
The issue raised is whether this arrangement punishes honest actors and rewards dishonest ones. The answer is "yes, it does."
The issue raised is whether this arrangement punishes honest actors and rewards dishonest ones. The answer is "yes, it does."
> Maybe it just feels more awkward to non-tippers
And that's the catch.
If I go to a coffee shop and get asked to tip I'm less likely to use that coffee shop in the future. The less coffee shops pay, the more they will need to push tips (or the more the staff will do it anyway) and the more obnoxious the tipping prompts.
Now I'm from a country that doesn't really do tipping, certainly not at any real volume in coffee shops, and I understand that pricing is a strong market force, but I think there's an unrecognised cost in goodwill to asking for tips.
Given the focus on employee wellbeing that we've seen over the last couple of years, I think there's absolutely room in the market for companies that charge more, treat their employees well, and don't push tipping.
And that's the catch.
If I go to a coffee shop and get asked to tip I'm less likely to use that coffee shop in the future. The less coffee shops pay, the more they will need to push tips (or the more the staff will do it anyway) and the more obnoxious the tipping prompts.
Now I'm from a country that doesn't really do tipping, certainly not at any real volume in coffee shops, and I understand that pricing is a strong market force, but I think there's an unrecognised cost in goodwill to asking for tips.
Given the focus on employee wellbeing that we've seen over the last couple of years, I think there's absolutely room in the market for companies that charge more, treat their employees well, and don't push tipping.
There's a particular French-inspired cafe near me that specifically doesn't accept tips - they don't even give you the option.
Their apparent prices are much higher than comparable places (something that's $12 across the street might be $15 here). And they are always packed. I love going to this place. It's the only place that doesn't demand extra time, thought, work, money, and sometimes a calculator from me in order for me to enjoy a cup of coffee and a crepe by the window.
On a totally different scale of spending, when my wife and I were choosing a resort for vacation, we specifically chose one that disallows - not discourages, but specifically disallows - tips. Because, for me, half of the point of a vacation is to spend a week not thinking about money, finances, budgeting, etc.
Given the choice between an expensive "tips not allowed" place and a nominally-cheaper-but-not-really "tips encouraged" place, I'll choose the more expensive option every time.
Their apparent prices are much higher than comparable places (something that's $12 across the street might be $15 here). And they are always packed. I love going to this place. It's the only place that doesn't demand extra time, thought, work, money, and sometimes a calculator from me in order for me to enjoy a cup of coffee and a crepe by the window.
On a totally different scale of spending, when my wife and I were choosing a resort for vacation, we specifically chose one that disallows - not discourages, but specifically disallows - tips. Because, for me, half of the point of a vacation is to spend a week not thinking about money, finances, budgeting, etc.
Given the choice between an expensive "tips not allowed" place and a nominally-cheaper-but-not-really "tips encouraged" place, I'll choose the more expensive option every time.
As a bartender, I know that I will make more money from tips than any business owner would ever pay me, even if prices were raised 20+% and tipping was removed. I’d rather risk a slow shift with less tips than work a job with a slightly higher hourly rate and no tips. I know there is a lot of bitching online about tips, and I agree that since COVID I’ve seen some absurd situations with asking for tips when the customer is essentially doing everything themselves, but most people tip fine.
>but most people tip fine.
We tip out of guilt. I literally freaking hate it, and I'm starting to tip less and less and prices go up.
Why should I tip you to pour me a drink? You are literally just doing your job. I don't call up my customers for a tip when I release an update to their program. I don't send them invoices with a TIP line and show how much 15, 18, 20% of the invoice is so they can add on to it.
Tipping culture is literally (1) employers paying their workers as little as possible and (2) preying on peoples emotions.
It's also a completely asymmetric transaction. How do I know if you are receiving below minimum wage or minimum wage/more? How do I know if you are getting healthcare, or other benefits? Yet I'm supposed to just assume you are being paid almost zero and give as much of my money to you as I can otherwise I will feel guilty.
I'm ranting in general obviously, not at you. But seriously people tip out of guilt and thinking people like you are not making very much money otherwise. It's the dumbest system ever.
We tip out of guilt. I literally freaking hate it, and I'm starting to tip less and less and prices go up.
Why should I tip you to pour me a drink? You are literally just doing your job. I don't call up my customers for a tip when I release an update to their program. I don't send them invoices with a TIP line and show how much 15, 18, 20% of the invoice is so they can add on to it.
Tipping culture is literally (1) employers paying their workers as little as possible and (2) preying on peoples emotions.
It's also a completely asymmetric transaction. How do I know if you are receiving below minimum wage or minimum wage/more? How do I know if you are getting healthcare, or other benefits? Yet I'm supposed to just assume you are being paid almost zero and give as much of my money to you as I can otherwise I will feel guilty.
I'm ranting in general obviously, not at you. But seriously people tip out of guilt and thinking people like you are not making very much money otherwise. It's the dumbest system ever.
You literally don’t have to think about it. Just tip 20% every time you’re at a bar or restaurant. That’s it. It’s a way for us to make better money. If that 20% was included and hidden I know you wouldn’t care as much, but it makes it tougher for us to get legally paid as much. Did you even read the article?
> You literally don’t have to think about it. Just tip 20% every time you’re at a bar or restaurant.
It's interesting to me that two people can see the same statement from such different perspectives. To me, a statement like this shouts, "broken system!"
Imagine if the calculator program on your phone was always incorrect, but in the same way: it was always too low by 20%. And then someone told you, "you literally don't have to think about it. Just add 20% every time you use it. That's it." Would that sentence make sense to you?
It's interesting to me that two people can see the same statement from such different perspectives. To me, a statement like this shouts, "broken system!"
Imagine if the calculator program on your phone was always incorrect, but in the same way: it was always too low by 20%. And then someone told you, "you literally don't have to think about it. Just add 20% every time you use it. That's it." Would that sentence make sense to you?
Funny because it used to be 15% and in a few years, someone else will probably be saying 25%.
Why are you complaining about inflation? Just pay 10% more, it's that simple!
Why are you complaining about inflation? Just pay 10% more, it's that simple!
Did you read his comment? His point is that this hidden costs system is grotesque. In fact, it is such a predatory tactic that it's either implicitly or explicitly outlawed in most parts of the developed world. It is also a convenient way to exploit many laborers beholden to tips, since a substantial part of their compensation is non-deterministic.
I would be fine with getting rid of tips if we could get our labor laws up to the standards of the rest of the world, but until then we’re going to have tips.
> I’d rather risk a slow shift with less tips than work a job with a slightly higher hourly rate and no tips
You can't argue both at once. You literally say above that you prefer tips because even if they increased prices you make more because of tips (i.e., making people feel guilty and throwing extra money at you).
But then you tell me if it was 20% higher I wouldn't care. Both of those can't be true.
I know you and I are being exploited when they want me to add 20% to the current prices. You literally just told me you make more money when I have to tip 20% than if prices were increased. Thus that means the TRUE price would not be a 20% increase. Therefore I'm being taken advantage of. And you are being taken advantage of because the employer is putting the variable risk on YOU. If there is less traffic in a place, that is on YOU. Why should that be your concern? If you work 8 hours, you work 8 hours. You don't control who comes in to the place. That's the employer's concern to choose a good location, advertise or whatever. But nope.. you are perfectly fine bearing that risk and perpetuating this stupid system.
And you are correct- if they showed true prices with no expectation of tips and I know everyone is being compensated fairly then I don't care about the price. I lived the UK for many years. What you see is what you pay, including tax. People are paid, there is time off, national medical coverage etc etc etc. There's not a thought about it. And I hate the mind games here.
Tipping is OPTIONAL. Live with it.
You can't argue both at once. You literally say above that you prefer tips because even if they increased prices you make more because of tips (i.e., making people feel guilty and throwing extra money at you).
But then you tell me if it was 20% higher I wouldn't care. Both of those can't be true.
I know you and I are being exploited when they want me to add 20% to the current prices. You literally just told me you make more money when I have to tip 20% than if prices were increased. Thus that means the TRUE price would not be a 20% increase. Therefore I'm being taken advantage of. And you are being taken advantage of because the employer is putting the variable risk on YOU. If there is less traffic in a place, that is on YOU. Why should that be your concern? If you work 8 hours, you work 8 hours. You don't control who comes in to the place. That's the employer's concern to choose a good location, advertise or whatever. But nope.. you are perfectly fine bearing that risk and perpetuating this stupid system.
And you are correct- if they showed true prices with no expectation of tips and I know everyone is being compensated fairly then I don't care about the price. I lived the UK for many years. What you see is what you pay, including tax. People are paid, there is time off, national medical coverage etc etc etc. There's not a thought about it. And I hate the mind games here.
Tipping is OPTIONAL. Live with it.
I think most complaints are coming from customers who don't want to have to consider the wellbeing and livelihood of underpaid employees, who require charity to survive.
In most every transaction these days, customers are guilted into providing wages for essentially unpaid employees, and I'm sick of the mind games.
In most every transaction these days, customers are guilted into providing wages for essentially unpaid employees, and I'm sick of the mind games.
> don't want to have to consider the wellbeing and livelihood of underpaid employees
For me, I want employees to be paid fairly by their employer, which would calculate how much an item/service should cost, instead of shifting this obligation to me.
Examples: going to a new coffee shop. In MOST places (in Vancouver at least), they'll just call you to the counter to pick your order. But some will get it to you. But you only discover that after having paid. So how to tip?
Ordering food for delivery. Giving X% of the order doesn't do, because you might have a cheaper order from a restaurant that's further away, or an expensive one 2 blocks from your place. And you don't know yet if the delivery person is going to be walking and take 30 mins to arrive, or bike. Or if they have a bunch of other deliveries on the way and the food will arrive cold.
So... I would like very much to just be told: it costs X.
For me, I want employees to be paid fairly by their employer, which would calculate how much an item/service should cost, instead of shifting this obligation to me.
Examples: going to a new coffee shop. In MOST places (in Vancouver at least), they'll just call you to the counter to pick your order. But some will get it to you. But you only discover that after having paid. So how to tip?
Ordering food for delivery. Giving X% of the order doesn't do, because you might have a cheaper order from a restaurant that's further away, or an expensive one 2 blocks from your place. And you don't know yet if the delivery person is going to be walking and take 30 mins to arrive, or bike. Or if they have a bunch of other deliveries on the way and the food will arrive cold.
So... I would like very much to just be told: it costs X.
100% agreement. I'd prefer to pay the true cost of my coffee, including reasonable living wage and benefits for the barista.
I neither need nor desire the additional mental load of worrying about tips.
And I don't love the implicit argument being made in the article... the wealthy should subsidize coffee consumption for the less-wealthy. If you can't afford the full cost of a carry-out latte, perhaps make your own coffee at home? Or, alternatively, maybe Ferrari should slash prices, ask the wealthy to donate money to make up the difference, and we can all drive super-cars?
I neither need nor desire the additional mental load of worrying about tips.
And I don't love the implicit argument being made in the article... the wealthy should subsidize coffee consumption for the less-wealthy. If you can't afford the full cost of a carry-out latte, perhaps make your own coffee at home? Or, alternatively, maybe Ferrari should slash prices, ask the wealthy to donate money to make up the difference, and we can all drive super-cars?
How do you know this? In other countries the front of the house staff do just fine without tipping. And how much of your tip goes to the food preparation staff? You're supposed to be sharing your tips with them: how much do you tip them?
Tipping needs to be burned with fire.
Tipping and its history is dripping in classism, racisim, corruption, and the perpetuation of poverty. It grotesquely unevenly distributes wealth among the front-and and back-end staff in a restaurant. It turns many common experiences: dining, cab-riding, having your house cleaned, even renting a hotel room, into exercises in guilt-tripping, price manipulation and misleading advertising, and mental calculation.
It's also a slippery slope. The rate used to be 10%. Then it rose to 15%. Now it's 20%. Why? Because employers are taking advantage of tipping to justify refusing to pay their employees a living wage.
If there's one simple thing that would improve the situation for many service workers, it'd be making tipping illegal.
Tipping needs to be burned with fire.
Tipping and its history is dripping in classism, racisim, corruption, and the perpetuation of poverty. It grotesquely unevenly distributes wealth among the front-and and back-end staff in a restaurant. It turns many common experiences: dining, cab-riding, having your house cleaned, even renting a hotel room, into exercises in guilt-tripping, price manipulation and misleading advertising, and mental calculation.
It's also a slippery slope. The rate used to be 10%. Then it rose to 15%. Now it's 20%. Why? Because employers are taking advantage of tipping to justify refusing to pay their employees a living wage.
If there's one simple thing that would improve the situation for many service workers, it'd be making tipping illegal.
I live in the Pacific Northwest so we do in fact tip out the kitchen quite a bit. In other countries, there are guaranteed rights that we don’t have in the US and especially not in the service industry.
There is no tipping for workers on an assembly line. We don't tip teachers. We don't tip custodians. We don't tip automobile repairmen. We don't tip busdrivers. We don't tip farmers.
You are not special. Tipping does not exist to lift you out of poverty, or because your job is different in some way. Tipping was imposed out of pseudo-Victorian classism and full-stop racism in the United States in the 1920s, and has been maintained by your employer in order to avoid paying you a normal wage. They can legally pay you poverty wages because your job includes tips.
Again, tipping must be destroyed.
You are not special. Tipping does not exist to lift you out of poverty, or because your job is different in some way. Tipping was imposed out of pseudo-Victorian classism and full-stop racism in the United States in the 1920s, and has been maintained by your employer in order to avoid paying you a normal wage. They can legally pay you poverty wages because your job includes tips.
Again, tipping must be destroyed.
The problem starts when you work for a place that does not get good tips but heavily relies on them.
If that happened to me I’d try and look for work elsewhere, but I know it’s not that easy (especially if you don’t live in a city).
Question, how much to tip per drink to be a good patron? :)
A dollar is great!
I've gotten poor treatment after giving 10% on a $18 drink before.
Edit: so I guess I'd ask what is the approximate reference price for your "A dollar" comment? Cause if it's a $5 can of beer, vs a $20 cocktail those are very different tips.
Edit: so I guess I'd ask what is the approximate reference price for your "A dollar" comment? Cause if it's a $5 can of beer, vs a $20 cocktail those are very different tips.
I have always understood the rule of thumb to be $1 for “poured” drinks (beer, wine, etc) and $2 for cocktails.
$18 cocktails are pretty expensive. I work at a brewery so I’m not used to that.
My worry is that this "asking for tips" trick is allowing employers to reclassify non-tipped positions as tipped positions that they can then substantially underpay, and not a lot of people know the laws that would force the company to match back to minimum wage if tips don't cover it.
From a #teamchaos point of view I'm a little hopeful this new push is a bridge too far, and it gets us to rethink tipping culture.
From a #teamchaos point of view I'm a little hopeful this new push is a bridge too far, and it gets us to rethink tipping culture.
I get the feeling that is the goal for some establishments.
The Reservoir Dogs on Tipping: https://www.youtube.com/watch?v=4fbwwlHPtRM
This never gets old. It was my introduction to the complexities of tipping in America. Learned quite a bit in that short exchange.
Back then 12% was a standard tip and $1 was reasonable for a single person's meal. Simpler times...
> Deadweight loss happens when a person who is willing to pay more is charged less than the amount they're willing to pay
That's not what a dead weight loss is. DWL happens when transactions don't happen for some reason (like price controls) and people who would have benefitted from the transaction at the market price can't do so
What the author describes is instead a situation where the consumer keeps the surplus, rather than the business. Regardless of how much a person tips, no wealth is being created or destroyed, it just affects moves from the consumer to the producer.
That's not what a dead weight loss is. DWL happens when transactions don't happen for some reason (like price controls) and people who would have benefitted from the transaction at the market price can't do so
What the author describes is instead a situation where the consumer keeps the surplus, rather than the business. Regardless of how much a person tips, no wealth is being created or destroyed, it just affects moves from the consumer to the producer.
Right, what the author describes is a reduction in consumer surplus.
Yes. I think its an important distinction because deadweight losses represent wealth that is lost to the world, whereas the surplus question is not about creating wealth, just moving it around.
We should always strive to eliminate deadweight losses because it makes the world richer. Moving the surpluses around is not making the world richer and is just just redistribution.
We should always strive to eliminate deadweight losses because it makes the world richer. Moving the surpluses around is not making the world richer and is just just redistribution.
Individual experiences considered, the historical and contemporary experience of tipping brings problems on issues of both gender and race. Here is one well referenced article on the matter. https://onlabor.org/the-tipped-subminimum-wage-has-sexist-an...
When employers attempt to shave labor costs by putting out a tip jar, the burden of that decision is not felt evenly across the staff.
When employers attempt to shave labor costs by putting out a tip jar, the burden of that decision is not felt evenly across the staff.
My main grocery store does pick up, which I use, and flat out says no to tips, instead just adding a 2 dollar charge for doing pick up. Thats the main reason I shop at that one.
If a coffee shop on my way home made it obvious they don't expect tips or even don't accept them, I'd gladly deal with the higher prices. Having someone else make the decision on what total price to me is not too expensive, but also not make me wonder if I'm being stingy, would entice me as a customer.
If a coffee shop on my way home made it obvious they don't expect tips or even don't accept them, I'd gladly deal with the higher prices. Having someone else make the decision on what total price to me is not too expensive, but also not make me wonder if I'm being stingy, would entice me as a customer.
I have a crazy idea for this: legally mandate that any business that excepts tipping must allow negative tipping, up to the same max percentage the positive tip can be.
Places that are high-end/service oriented will then allow tips, because the vast majority of customers will. Maybe even your local fancy bar would ban you for leaving a -10% tip.
But subway? They’ll turn that off immediately because almost everyone will hit “-10%” given the chance.
This one trick would clean up the entire space overnight
Places that are high-end/service oriented will then allow tips, because the vast majority of customers will. Maybe even your local fancy bar would ban you for leaving a -10% tip.
But subway? They’ll turn that off immediately because almost everyone will hit “-10%” given the chance.
This one trick would clean up the entire space overnight
I would LOVE to see this. Does anyone here have the connections to get this written into law?
What I really don’t understand are mandated tips. One of my favorite local bakeries implemented a 20% tip at checkout, whether paying cash, card or otherwise and then a screen comes up that allows you to tip extra.
Just raise your prices at that point.
Just raise your prices at that point.
wondering if it lets you account for that money separately. IIRC, 'tips' don't necessarily count as 'wages', and would be taxed differently. however, also, IIRC, automatic tips - like you described - aren't counted that way. so yeah, just raise your prices.
If there is no service then I am not going to add a tip. I think the most egregious one I've ever seen was at Panera Bread. The automatic machine where I didn't even talk to a person to enter my order asked me for a tip.
I'm not going to be guilted into this nonsense tipping scheme. If they need more money then they can raise their prices and I will evaluate whether or not that is worth it to me prior to purchase.
I'm not going to be guilted into this nonsense tipping scheme. If they need more money then they can raise their prices and I will evaluate whether or not that is worth it to me prior to purchase.
I find it ironic he is using coffee shop competition to prove his point, when in reality Starbucks did just that - charged higher prices, removed the tip jar, paid employees fairer and with health benefits....the crushed the competition to near oblivion.
Asserting that we need to trick each other to have a fair economy of services is ridiculous.
Asserting that we need to trick each other to have a fair economy of services is ridiculous.
> The cost of eliminating some deadweight loss is making some people feel awkward or shame when they get to the tip screen.
90% of the places I’ve recently visited displayed a tip screen, and I’ve tipped maybe 5% or even 0%.
I’m alright with tipping properly if I sit down at your restaurant and you serve me food, with reasonable service.
I will not tip you 25-20%, if I drive in and picked up my food myself, and all you did was hand me the food at the counter.
Unfortunately, nearly every restaurant and eatery has this expectation in my area. They give you no service other than literally just giving you the food, and then they want a tip. I should feel pressure or feel bad I’m not paying you extra? Nah.
If anything, I find this behavior appalling, and we avoid eating out. The food isn’t great for my blood pressure and diabetes anyway, and we’re better off saving or investing it for our grandchildren.
90% of the places I’ve recently visited displayed a tip screen, and I’ve tipped maybe 5% or even 0%.
I’m alright with tipping properly if I sit down at your restaurant and you serve me food, with reasonable service.
I will not tip you 25-20%, if I drive in and picked up my food myself, and all you did was hand me the food at the counter.
Unfortunately, nearly every restaurant and eatery has this expectation in my area. They give you no service other than literally just giving you the food, and then they want a tip. I should feel pressure or feel bad I’m not paying you extra? Nah.
If anything, I find this behavior appalling, and we avoid eating out. The food isn’t great for my blood pressure and diabetes anyway, and we’re better off saving or investing it for our grandchildren.
Assuming it's true that they receive a similar proportion of cash tips from cash purchases as digital tips from digital transactions, I wonder if the variability is substantially greater for cash tips. It seems reasonable to assume pre-selected tip amounts on Square would decrease variability, while cash purchases probably opt for (no tip, resulting coins from change, or bigger bills). The five or ten bill tips mentioned in the article seem awfully high for a coffee purchase... perhaps older, wealthier customers tend to pay cash and tip in bigger bills.
With cash it's more convenient to tip based on the bills you have available vs with a fixed percentage. Maybe some regulars will give a large cash tip some days and a small or no tip on other days, with the idea that it'll even out in the end.
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2 reasons this pisses me off more than it should:
1) Tipping a fast food restaurant for simply doing the thing I am already paying them for (making the food and handing it to me over the counter) is fucking ridiculous. There was no table service involved.
2) These scumbag business owners are trying to make us consumers pay their employees the wages THEY should be paying them. I pay you for the product/service.... YOU should pay your employees a fair wage with that money.
1) Tipping a fast food restaurant for simply doing the thing I am already paying them for (making the food and handing it to me over the counter) is fucking ridiculous. There was no table service involved.
2) These scumbag business owners are trying to make us consumers pay their employees the wages THEY should be paying them. I pay you for the product/service.... YOU should pay your employees a fair wage with that money.
The interesting point is why tipping as wage evolved only (or almost only) in the USA and in the rest of the world is a way to say thank you the few times that service is worth a thank you. It's not that businesses all over the world don't compete on price with nearby businesses or that their wages are so high that their staff would leave the tip on the table.
Why not expand tipping to other services? Let's say police stopping you for speeding. The judge and prosecutor in court. Or maybe the border personnel. Aren't those people providing you personalised service and you should be happy to give them little extra for their hard and under appreciated work?
> If a coffeeshop wants to pay their employees more they will have to raise prices. This makes them less competitive to any nearby coffeeshops that haven't raised prices.
You what? I can buy coffee from McDonalds for a pound, or I can get the nicer stuff from a barista for £3 the coffee is the same brown warm stuff the environment and customer service is what makes it worth the extra money.
Coffee is a luxury good trying to be the cheapest coffee isn't a winning strategy. It's like trying to make the cheapest super car. It's a race to the bottom larger companies that have scale will destroy you.
Managers do this all the time hire a bunch of 16 year olds pay them next to nothing and wonder why they spend all their time on their phone rather than impressing the customers and winning recurring business.
BuT LoOk HoW MuCh MoNeY I SaVeD! :^)
You what? I can buy coffee from McDonalds for a pound, or I can get the nicer stuff from a barista for £3 the coffee is the same brown warm stuff the environment and customer service is what makes it worth the extra money.
Coffee is a luxury good trying to be the cheapest coffee isn't a winning strategy. It's like trying to make the cheapest super car. It's a race to the bottom larger companies that have scale will destroy you.
Managers do this all the time hire a bunch of 16 year olds pay them next to nothing and wonder why they spend all their time on their phone rather than impressing the customers and winning recurring business.
BuT LoOk HoW MuCh MoNeY I SaVeD! :^)
The only reason I continue to tip is the knowledge that my food will be spat in / worse if I don't.
I would happily pay higher food prices to avoid tipping culture.
Tipping culture simply doesn't exist in most of the world, and Americans who can't imagine a world without it here have no vision.
I would happily pay higher food prices to avoid tipping culture.
Tipping culture simply doesn't exist in most of the world, and Americans who can't imagine a world without it here have no vision.
> The only reason I continue to tip is the knowledge that my food will be spat in / worse if I don't.
Nobody does this, even if you're a "horrible" customer and a poor tipper. If you're a bad regular at a restaurant, the front of house will probably grumble about you behind your back (maybe even give you a rude nickname) and give you curt service, though.
EDIT: They have probably dealt with much worse than you. You're not a church brunch group demanding 20 lemons and a jar of sugar packets that tips them in fake $100 Jesus bills.
Nobody does this, even if you're a "horrible" customer and a poor tipper. If you're a bad regular at a restaurant, the front of house will probably grumble about you behind your back (maybe even give you a rude nickname) and give you curt service, though.
EDIT: They have probably dealt with much worse than you. You're not a church brunch group demanding 20 lemons and a jar of sugar packets that tips them in fake $100 Jesus bills.
> [...] and give you curt service
I might actually prefer that. The fake smiling creeps me out.
I might actually prefer that. The fake smiling creeps me out.
I personally got so exhausted from decision fatigue and being forced to choose a tip or not that I just go to fewer coffee shops as a result.
Make it a seamless experience (single tap) and charge enough to cover costs plus profits plus a good wage and I'm happy to support.
Make it a seamless experience (single tap) and charge enough to cover costs plus profits plus a good wage and I'm happy to support.
Same here, just the whole hassle and knowing that the ice cream/coffee/cookie is going to be significantly more expensive is putting me off enough to sometimes to just avoid the whole thing. Good for my diet I guess.
The post addresses why raising prices isn't a good option for most businesses. I find the argument convincing. Tipping culture _is_ you paying the higher price.
> The only reason I continue to tip is the knowledge that my food will be spat in / worse if I don't.
I know this is anecdotal, but I have worked in many places that serve food/drinks & take tips. I have never seen someone get their food spat in. The places where tips are most expected, restaurants with wait staff + bars, ask for tips at the end of service. All other places don't have the expectation of tips beyond it being nice to get one.
> The only reason I continue to tip is the knowledge that my food will be spat in / worse if I don't.
I know this is anecdotal, but I have worked in many places that serve food/drinks & take tips. I have never seen someone get their food spat in. The places where tips are most expected, restaurants with wait staff + bars, ask for tips at the end of service. All other places don't have the expectation of tips beyond it being nice to get one.
I'm talking about being spat in the NEXT time you go there.
If you're known to not tip, you're at risk of this behavior.
It's far worse with things like UberEATS. Your paying the driver to not eat your fries and sip your drink
One time, my drink from UberEATS had a line of lipstick on the rim of the straw. I guess I should have tipped more.
If you're known to not tip, you're at risk of this behavior.
It's far worse with things like UberEATS. Your paying the driver to not eat your fries and sip your drink
One time, my drink from UberEATS had a line of lipstick on the rim of the straw. I guess I should have tipped more.
Why would anyone subject themselves to such ridiculous behavior? If someone spat in my food or ate some of my food I would never use their service again.
Any business with any sense should immediately fire such employees or risk losing customers.
Any business with any sense should immediately fire such employees or risk losing customers.
You can't prove who did it, or even that it was done in the first place.
This guy said there was lipstick on his drinks straw. That seems rather definitive.
UberEats drivers become aware of the tip after delivery, not before.
I suspect a common experience for Uk visitors to the US is getting off the plane, going to a hotel bar for the first time, buying drinks, paying for them, and then been told (possibly passive-aggressively) to ** off.
[It’s more usual to pay for drinks one at a time in Uk bars, and unusual to tip if not eating a meal.]
[It’s more usual to pay for drinks one at a time in Uk bars, and unusual to tip if not eating a meal.]
Ah come on now, nobody actually does that.
Cash tips are always superior when tips are actually applicable. If its just on a POS system I never tip. If I am expected to tip before service is rendered I also won't tip, since how can I possibly know what to tip if I haven't received the service yet? For cash tips you can wait until service is rendered no matter whatever shitty POS service the restaurant owner contacted with, plus there is no risk of the restaurant owner pilfering from the tip jar if the money goes directly from your hand to your intended recipient, and taxes are de facto eliminated.
I think it's good if it normalizes not tipping. Unless you make under minimum wage I don't want to feel compelled to tip you unless you've actually done something noteworthy
The truth is that it's praying on the stupid.
I'll pay a tip for service, not for someone that poured coffee in a cup and handed to me.
The concern about price sensitivity is real but that doesn't mean rasing prices and getting rid of tipping can't be managed and successful. If there is a demand for the product then you communicate this to the customer. Dropping tipping and failing to communicate how it changes prices is simply asking to fail.
I'll pay a tip for service, not for someone that poured coffee in a cup and handed to me.
The concern about price sensitivity is real but that doesn't mean rasing prices and getting rid of tipping can't be managed and successful. If there is a demand for the product then you communicate this to the customer. Dropping tipping and failing to communicate how it changes prices is simply asking to fail.
I don’t know about the low-wage, high-tipping argument. Having worked at a chain coffee shop, I was paid minimum wage and would usually make less than $1/hr in tips by the time it was split across everyone else. So maybe it works better for like 3rd wave coffee shops
I don’t tip because society says I have to. Alright, I mean I’ll tip if somebody really deserves a tip. If they really put forth the effort, I’ll give them something extra.
But this tipping automatically, it's for the birds. As far as I’m concerned, they’re just doing their job.
But this tipping automatically, it's for the birds. As far as I’m concerned, they’re just doing their job.
Meanwhile in Italy, you will pay typically €1 for an espresso and €1.50 for a cappuccino. No option to tip. And the drink is ready 10 seconds after the 30 seconds that it takes the machine to extract after you order. No latte art and no waiting 5 minutes after you order only to realize they completely forgot to start making your drink _after you've already tipped them_. Back here in the States you will pay more than $1 in tip alone on top of a $4.50 cappuccino.
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Interesting perspective on tipping. Never thought of it as price discrimination.
How much of the “tip” actually gets to the employees?
If it's not 100% it's wage-theft
Really? I own a coffee shop and the employees don't always get 100%. For cash, yes its 100%. For CC they get around 97.8% (I pay 2.2% CC fees).
The CC fees should be paid by the product or service transaction. Maybe it's legal but it's not cool that you are basically charging your employees for the right to get a tip from a credit card transaction you are already processing.
I pay for the credit card processing fee for the item part of the bill.
For example, if someone came in and bought coffee for $20 and left a $10 tip. My credit card fee is $0.66 (2.2% of the $20 which is $0.44 and 2.2% of the $10 which is $0.22). So out of the $10 tip the wait staff gets $9.78 ($10 - $0.22).
For example, if someone came in and bought coffee for $20 and left a $10 tip. My credit card fee is $0.66 (2.2% of the $20 which is $0.44 and 2.2% of the $10 which is $0.22). So out of the $10 tip the wait staff gets $9.78 ($10 - $0.22).
So, instead you should not accept CC and expect the employees being happy with higher take from tips and less tips in general as losing people paying by CC would result?
No, instead a business owner should understand that if they want to process CCs, there are fees and they should pay them. Making your employees pay CC processing fees (which is what they are doing) is immoral. Simple as that. Stop being an entitled ass. If you want to run a business, you are required to do business things. It's not free lunch.
My dad is an independent contractor. If he needs a new tool to finish a job for someone, he doesn't make them pay for the tool, because that's just what it means to run a business.
My dad is an independent contractor. If he needs a new tool to finish a job for someone, he doesn't make them pay for the tool, because that's just what it means to run a business.
I keep seeing tip prompts for store purchases that don’t even involve prepared food. Oddly they have like 1%, 3%, 5% as options.
The same reason why paid television or streaming services eventually grow ads: it's hard to say no to extra money.
I'll usually toss a buck or two if there's a tip jar. I'm not hurting, why not.
It's not.
4% of the world's population hardly qualifies as "everywhere".
4% of the world's population hardly qualifies as "everywhere".
Tipping is classism.
It's not the rich people tipping though....
Wait staff are not paid enough. At least in my state, the minimum wage for tip-accepting employees is horrific. I was a waiter twice and understand all of that so I always tip and try to be generous.
Also, I'm pretty bad at math in my head so I usually guesstimate tips too high.
A downside of tipping on the checkout systems I see is the baked in 15 / 20 / 25% options. OR tap custom and probably stand there like a moron for 5 extra seconds trying to figure out how to work the thing while the next person is waiting to order.
SO I click 25% or whatever the top one is and get out of the way, but it's less than I'd normally have tipped.
I hope overall it leads to servers / wait staff bringing home more.
Anyway, as a former waiter with math insecurity issues there's my $.08 (inflation).
Also, I'm pretty bad at math in my head so I usually guesstimate tips too high.
A downside of tipping on the checkout systems I see is the baked in 15 / 20 / 25% options. OR tap custom and probably stand there like a moron for 5 extra seconds trying to figure out how to work the thing while the next person is waiting to order.
SO I click 25% or whatever the top one is and get out of the way, but it's less than I'd normally have tipped.
I hope overall it leads to servers / wait staff bringing home more.
Anyway, as a former waiter with math insecurity issues there's my $.08 (inflation).
I will happily tip 20-30% at restaurants without thinking about it, when there is even decent service (free-refill drinks refilled, server not overtly rude or clearly wishing they were elsewhere, etc). But this isn't about servers, it's about tipping having become expected or at least overtly requested in areas where it never was before.
There's a Subway by my house that has the following options: 20%, 25%, 30%, custom, or skip. Before the advent of consumers swiping their own credit cards, no Subway employee received tips for anything.
I will gladly tip someone $20 on a $60 meal because they're making less than $3/hr. I'll also vigorously support legislation and politicians that want to pay them a livable wage. I'll be damned if I'm tipping the Subway employee making $18/hr an extra $5 for the sandwich that took them all of 4 minutes to make. It's ridiculous.
There's a Subway by my house that has the following options: 20%, 25%, 30%, custom, or skip. Before the advent of consumers swiping their own credit cards, no Subway employee received tips for anything.
I will gladly tip someone $20 on a $60 meal because they're making less than $3/hr. I'll also vigorously support legislation and politicians that want to pay them a livable wage. I'll be damned if I'm tipping the Subway employee making $18/hr an extra $5 for the sandwich that took them all of 4 minutes to make. It's ridiculous.
Ahhh good point. That totally makes sense.
Still, even the subway worker isn't exactly making bank over there. It's not bad to have the option for tipping.
Still, even the subway worker isn't exactly making bank over there. It's not bad to have the option for tipping.
In California, minimum wage for tipped workers is the same as minimum wage for any other employee. Tips are in addition to the state minimum wage.
I have noticed that several checkout systems compute tips after tax instead of pretax, so I always end up computing tip myself anyway.
I have noticed that several checkout systems compute tips after tax instead of pretax, so I always end up computing tip myself anyway.
It's odd that you think it's super important to tip a very specific amount.
It's important that I don't reward liars.
Where I am, wait staff are paid too much. They are guaranteed minimum wage ($15.96/hour), and tips are in addition to minimum wage, not in lieu of it because CA does not provide employers a "tip credit" that would let them offset their employee wage obligations with customer tips.
Wait staff, who do the least work in a restaurant, can easily clear 3-4x what the kitchen staff gets, even though the kitchen staff does 90% of the work.
Wait staff, who do the least work in a restaurant, can easily clear 3-4x what the kitchen staff gets, even though the kitchen staff does 90% of the work.
This isn't about wait staff who make the tip minimum wage, though. This is about fast food workers who make the regular minimum wage and get the tips as a sort-of bonus. From what I can tell, they are almost always pooled together, even across shifts in a lot of cases (for good reasons).
> makes them less competitive to any nearby coffeeshops that haven't raised prices
Maybe I'm an outlier but for me I'm sick of the mental game of "Am I good member of society for the % I selected, and how much will my date judge me if I choose what used to be the norm -- 10%-15%... and am I the sucker if I choose a high amount while other people groups select low amounts?". Some of you may be too young to realize but there has been tip % inflation that is when combined with price inflation the tip amount has grown geometrically.
To me a good customer service is I order my drink, I pay the stated price -- no more or less than the next person. Tipping makes me feel both guilty/ashamed and like a sucker knowing that certain groups of tip less. (and nothing to do with means)
Why cant we just give employees dignity and a fair wage?