Tipping Practices

A couple of years ago, in an issue of the New York Times Sunday Magazine, I came across an interesting article on tipping, the practice of leaving an optional gratuity, and the alternative, the fixed service charge. 

It talked in part about a popular restaurant, The Linkery, in San Diego, whose owner, troubled by dissension and rivalry among his staff over tips and earnings, decided – with his staff’s agreement (Only one dissented and quit.) – to go with a set service charge instead of relying on the vagaries of tipping for his employees.

Here is my synopsis of the full article, with emphasis on the interesting discussion in general on tipping versus service charges:

Tipping, or, in its more high-sounding terminology, giving a gratuity, has long become a “fact of life” of eating out in America. Interestingly, it has not always been so, according to an article in the New York Times Sunday Magazine in October 2008.

Not that long ago, before the turn of the 20th century, tipping was not expected or done in the United States. Indeed, the article said that six states had passed anti-tipping laws, though they were rarely enforced and were all repealed by 1926.

Today, “diners hand over some $42 billion in tips (annually) at the nation’s full-service restaurants, which employ 2.6 million waiters,” according to the Times article.

A brief history

The custom of tipping was imported, as so many things were, from Europe, the Times article said. Tipping began as an aristocratic “noblesse oblige,” small donations for social inferiors, and it quickly spread as a practice among the upper classes of Europe over the next few centuries.

The article states that after the Civil War, “wealthy Americans began traveling to Europe in significant numbers,” bringing the tip home with them “to demonstrate their worldliness.”

Then, in the last century, a strange thing happened. According to the Times article, Europeans began rethinking their devotion to the practice even as Americans began to seriously adopt it.

Now, the continent’s restaurants and cafes add a service charge on the tab–the “service compris” in France, and the “servicio” in Italy – typically 10 to 15 percent. (In some places, it is customary to leave a few small denomination coins on the table as an added gesture of appreciation.)

In the U.S., the tip has become so ingrained in the system that servers commonly receive low wages, ranging from only “$2.13 an hour in some states” to $8 an hour minimum in California, the expectation being that they will make it up in tips, the article said.                                   

Why do people tip?

To be sure, according to the Times article, “anxieties around tipping abound – is 15 percent enough? 20 percent?” After a relaxing, congenial meal, who feels like making this decision and performing math calculations in their heads.

Yet, studies show that Americans prefer this voluntary discretionary system to having to pay a set service charge. The Times article cites a Zagat study finding that 80 percent of Americans surveyed “prefer voluntary tipping” because they believe it is an “incentive” for good service.

Other factors mentioned in the article are the perceived social pressure to conform, the psychological need to pay for the guilt they feel in “the unequal relationship” of literally “having another person wait on you,” and, of course, ego, especially among big over-tippers. 

These factors partially explain the steady rise of the standard tip percentage (properly calculated as a percent of the bill before tax) “from 10 percent in the early 1900s, to 18.9 percent today, with little regional variation,” according to the article.

The Times article fails to mention that many of us give a gratuity (as the word implies) to simply express our thanks (gratitude) to our waiter for the service we received.  The article’s arguments (below) notwithstanding, the fixed service charge does not address this common motivation for tipping.

The arguments for the service charge

The most basic reason for discretionary tipping – for better service – has some problems.  Marketing and consumer behavior studies show only a two percent correlation between tipping and actual improved service, according to the Times piece.

Secondly, as the article notes, since the bill is presented and the tip conveyed at the end of the meal, how can it retroactively improve service? And, why tip for this reason at a restaurant you might never revisit?

According to the Times article, several high-end restaurants, including Chez Panisse and the French Laundry, both in California, now include a service charge to correct great disparities in earnings between the serving and the cooking and support staffs caused by traditional tipping.

Also, the article stated, a 1973 study at an Ohio restaurant found that larger groups will tip less than individuals in a smaller party, which is why you will often see a service charge imposed on parties of six or more.           

To contact Mitch Davis, you can e-mail him at: MdavisMainCourse@aol.com