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Oct 21, 2008 01:14 PM

Tipping: why a percentage?

Disclaimer first so I don't get flamed: I always leave 18-20% as a tip, never less than $1 per person.
But...why is the tip supposed to be a percentage---any percentage---of the price of the meal? It just doesn't make sense.
My husband and I recently went away for the weekend, so we were eating breakfast, lunch & dinner out. At one of the places we went to for dinner, our server took our order, then brought our drinks (1 each), then our dinners---which were each on a single plate. The next morning at breakfast, we each ordered coffee, then juice, then breakfasts that each consisted of 3 plates (toast on separate plates, etc.). The price of our dinner was roughly twice that of our breakfast. Both restaurants were casual, neighborhood places. By conventional tipping "rules" the dinner server should have gotten twice the tip of our breakfast server. Yet the breakfast server worked harder---more trips to/from the kitchen and a heavier load of dishes. How is tipping them a percentage of the meal cost fair?
In the same vein, our local Mexican bar & grill charges much less for their meals than similar meals at say, Chili's. Why does the server at Chili's get the bigger tip?
Thanks for your input!

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  1. If you think of it like a sales job and the tip a commission, that is a good way to understand it and a good way of gauging how it really works. For example, car salespeople are paid a "base" pay and then get commissions based on their sales. The more expensive a car you sell, the more your commission.

    This is why your car salesperson tries so hard to sell you more car than you want or often gets a better deal for the dealership than you think you're getting, and is the same reason why servers are pushed to "suggestive sell" and "upsell" items such as apps, more expensive drinks, desserts, add sour cream with that, loaded baked potato, etc.

    It's a percentage because that's still the way it works in a lot of sales jobs and waiting tables is a sales job.

    Edited to add - the server at Chili's gets paid more simply because their sales/check average is higher. This is why jobs at diners and inexpensive restaurants, particularly those without alcohol, really suck in terms of making any money. But in smaller, family owned places, you usually get to keep all your tips and don't have to "tip out" the bar and the people busing the tables, etc. This is why people who wait tables for a long time continually go to more and more expensive restaurants so their sales can be higher and their $ can be increased.

    15 Replies
    1. re: rockandroller1

      It's my understanding that waiters are required to report approximatley 8% of sales reciepts as tip income for tax purposes. If this is correct, by failing to leave a percentage of the sale, you may leave the server owing the goverment on the sale.

      1. re: jdinsf

        This is true and most servers that I know claimed 10% most of the time. If you claim 8% every day you're more likely to be audited and it happened to TWO servers I know and I never wanted it happening to me, so I usually claimed 10% or so as it was easy to figure. After tip out, teenagers or families with small children who didn't tip, dine and dash, elderly customers who tip 8% averaged out with those who tip 15-20, it averaged out to about 10 anyway.

        1. re: jdinsf

          Actually, they are required to claim their full tip income. The government sets a floor of 8% and relies on the honor of the person to declare the rest.

          1. re: lgphil

            True, you are "required" to, but I've never met a server who declared 100% of their tips.

            1. re: rockandroller1

              Glad to meet you, rockandroller!
              There, you've just met one. :-)
              Granted, that was years ago when I was waiting tables, but when buying a house, the more realistic (and higher) your income, the easier it was to get a loan, so reporting 100% made sense.

              1. re: ThreeGigs

                that's a good point threegigs and glad to meet you to. You're the first! :)

                1. re: rockandroller1

                  Me too. I am a career server, (or so it seems), and I am trying to buy a house. Plus, I've just gotten paranoid in my old age, so I declare everything. Also helps if you think you might get fired. Not that I do, but you would get a whole lot more unemployment if you declared all of your tips.

                  Also. Everybody else has to pay taxes on their income. I have no problem doing the same.

              2. re: rockandroller1

                One reason to never pay the tip in cash when you're paying the bill with a CC.

                1. re: jgg13

                  That's your choice of course. I try to always tip in cash.

                  1. re: rockandroller1

                    I would if I had faith that they'd be accurately reporting their income to the federales. My employer doesn't pay me a portion of my salary in cash to help me evade my share of taxes, I don't see why I should help others do the same.

                    That being said, I don't go out of my way to pay the bill via CC or anything, just that if I am using a CC I'll pay the tip with the CC.

                    It'd be funny to pay the bill in cash and say you wanted to pay the tip in CC, the server would probably punch you in the face :)

                    1. re: jgg13

                      Your employer also doesn't dock your wages arbitrarily based on mood or a whim (walk-outs, people who don't tip at all) or require you to give away a portion of what you earn to other people in your department or company, which I don't happen to think is fair. It's just my opinion and you can have yours and I'll have mine.

                      1. re: rockandroller1

                        How is it unfair for servers to "have to" tip out to the people who help them do their jobs? The good service you receive in a restaurant is the result of a coordination of efforts among the bussers, sommelier, food runners, greeters, AND servers. And in many trendy restaurants with crappy food (e.g. all the restaurants on Santana Row in San Jose), the servers are lazy and don't care at all about giving you good service, knowing the menu items, or following protocol. They're looking at you as a number. "Sure I'll take another 4-top. It's another $40 for me." If you're lucky to get good service, it's usually because there's a busser who's been properly trained in a good upscale restaurant who do a good job because the take pride in what they do whether or not they'll get paid extra for it. Unfortunately, many of these great bussers don't get the serving positions because there seems to be some sort of attitude many managers/owners have that Mexicans work in restaurants to be line cooks, dishwashers, or bussers rather than chefs, managers, and servers.

                        1. re: PaperMoon

                          Well, I've worked in plenty of restaurants where there was no tipout and the bussers did a great job. And I've worked in plenty of restaurants where the hostesses sucked and the bussers were lazy and screwed things up more than they did things right but you were required to tip them out no matter what.

                          I understand tipping out the bar. They also don't get paid a flat higher hourly wage than me (like bussers or hostesses). I don't understand being forced to tip out people a percentage of my sales no matter what kind of job they do, good, crappy or somewhere inbetween.

                          Plenty of places you do 99.9% of the work yourself but you still have to tip people out. and how does the hostess help your table, exactly, such that we have to tip them out? I just think it's wrong. You're allowed to think otherwise.

                          1. re: rockandroller1

                            You tip out the greeter simply because that's how the restaurant has set up its pay structure. You tip servers simply because that's how American restaurants have set up their pay structure. Period. There are many restaurants that have servers tip out the sommelier even if the sommelier didn't provide wine service for their tables. As a server, I had to tip out the bar every night I worked even if all my guests only ordered water, iced tea and soda (which would be prepared by me or my busser) or wine (which the sommelier would get). Every single guest goes through the greeter, but not all guests will order mixed drinks or wine. Bartenders and sommeliers (primarily men) play a flashier supporting role and seem never to be unappreciated.

                            Greeters play a vital role in the service a guest receives. They're the first person guests see, often the person who answers the phone, and when they're incompetent; it affects the whole restaurant. If you've never felt the effects of a bad greeter, then you are lucky. Bad greeters bring more guests to your table that are angry and frustrated and will now take it out on you. Bad greeters don't rotate sections properly so you're standing around doing nothing for two hours and then slammed with a full section and most likely will give all your guests bad service (that will show in the tips). Bad greeters don't know how to maintain wait lists and will usually just make up a number that's usually wrong "Um, yeah. It'll be, like, maybe 15 minutes?" I guess good greeters are easy to take for granted. You come in, you do your side work. Suddenly you have a table seated. Not too soon and not too long later, you have another table seated. All the guests that come to you are cheerful and happy because they've been properly primed. Some might even have already been presold on an appetizer. It's rather subtle, but makes a huge difference.

                            Sometimes I think greeters are under-appreciated because they're primarily women, and the kind of service they provide is more subtle -- the same kind a good mother/wife plays. Having clean socks without having to do your own laundry is wonderful and very easily taken for granted. It's easy to open your drawer and take out a clean matched pair and never even think that the socks didn't get there cleaned and sorted by magic. But maybe I'm being a little too gender-sensitive. In fact, I find it funny that I often hear servers complain about tipping out bussers and greeters (primarily Mexican (in California) and women), but never really hear them complain about tipping out bartenders (primarily men). Maybe it's race, class, and gender. But now I strongly suspect I'm being too sensitive.

                            As for being required to tip out to the support staff when they're lazy and screwing things up -- sure, that sucks. But when I'm a guest, tipping a lazy incompetent server even if they screw up sucks too.

                            Perhaps our disagreement comes from living in different states. In California, everyone gets at least minimum wage. If I'm a server making $7.50/ hour (or whatever the minimum wage is) and the greeters and bussers are making $8,$9, or $10 an hour that's really only an extra $15 at most per shift that they are taking home. You make less/hour as a bartender or server precisely because you're taking home so much more. In a four-hour shift, I could usually count on taking home at least $150 which means that I had grossed about $200. That's pretty darn good. And yes I "worked hard" for it. But so did the food runners and my bussers, especially since I'm weak and unable to carry large platters gracefully.

                            1. re: PaperMoon

                              "Perhaps our disagreement comes from living in different states. In California, everyone gets at least minimum wage. "

                              That is EXACTLY the point of disagreement.

        2. Whether it's fair or not, "working hard" does not necessarily lead to making more money, especially if if the "working hard" refers to physical labor.

          In most restaurants, the hierarchy has bartenders and servers at the top with bussers and food runners at the bottom. Bartenders and servers make more money. Bussers and food runners make less even though the bussers and food runners are the ones doing most of the running around, carrying heavy objects, and cleaning up any messes should they occur. And in some places, the managers work damn hard and may make less than some top performing servers. I've worked in an upscale steakhouse that had the greeters making more money hourly than the lower managers.

          The beauty of the tipping system is that ultimately, it's up to the choices of the consumer. I've spent almost ten years in the restaurant industry. When I was a server, I made sure to tip in cash when I ate out because I know that servers always prefer cash so they can attempt to evade paying their fair share of taxes. But when I started taking greeter positions, I went through a phase where I made sure to pay tips in credit card because I suddenly became very aware that if a server can easily claim less tip money to evade taxes, they can also more easily evade paying their fair share to the bussers, food runners, and greeters.

          5 Replies
          1. re: PaperMoon

            "so they can attempt to evade paying their fair share of taxes"

            And you think that's a good thing to support why, exactly?

            1. re: jgg13

              I don't necessarily think it's a good thing to support. I said that statement tongue-in-cheek. Judging from many of the posts on this site, a lot of people seem to prefer tipping their servers in cash. I can't think of any other reason why they'd prefer to do this except to make it easier for servers to hide how much they're really making.

              Obviously, a server, by law, has to report all the money they make. By law, (at least in California) you have to report a minimum of 8% of your sales anyway as a server. But I don't think I've ever met a server who has claimed all the money they make.

              1. re: PaperMoon

                Ah, sorry. Sometimes tone is hard to pick up on via text.

                The few people I know who explicitly tip in cash do so explicitly so that the servers don't have to report the full value to the IRS - which seems nutty to me.

                That being said, I could imagine that a server might prefer cash for other reasons, such as having instant access to that money.

                1. re: PaperMoon

                  It is nice to pay the server their tip in cash if possible- sometimes the restaurant can hold their credit card tips forever and the server may never get their money. Very wrong but I do know places where this goes on regularly. One of the biggest appeals of being a server is to work hard and go home with your earnings right away. And to label all servers as wanting to "hide" their income is unfair as well. I have managed several restaurants with very honest servers. You guys that are so worried about other peoples taxes clearly need to worry about you own instead.

                  1. re: yuck

                    Oh, sorry if I implied that I assume all servers are trying to cheat on their taxes. And as I said on another post, I can understand why a server would want their tips in cash beyond tax evasion.

                    It's just that out of the folks that I know (mostly those who tip in cash and about half of the servers I know), they prefer cash tips to enable tax evasion.

                    So I guess that I'm saying that I know it is a pretty common reasoning - so I'm not going to go out of my way to pay a cash tip when I'm paying via CC (but as I said in another post, I don't go out of my way to pay the bill via CC either, it depends on the situation).

            2. I agree that a percentage-based method desn't seem fair to people working in restaurants with lower prices. In a place like a diner, where I am just having a $10 breakfast or lunch, I will often tip 30 or 40 %, as I understand that these people need to get paid well.

              But I usually base my tips on more than just cost of meal; time actually factors into it. If I'm in a place for breakfast and have a $10 bill, but out in 20 minutes, I will tip less than if I am there for 40 minutes, figuring that the server will probably serve another table quickly anyway. But even the quick one will be at least $2, more likely $3 unless it was poor service.

              In pricier restaurants, meals often take longer, so a larger tip is warranted on just a per hour basis.

              My big concern is tipping on a percentage when dining alone. I have to ask myself was i really any less work than if I were with another person. I recently ate 3 solo meals in very high-end places (bills, with tax but before tip, were $100, $120 and $135). I tipped about 30-35% on these, figuring that it wasn't the servers' fault that he/she got a table of one person who was spending far less than any other table in the place, and they worked just as hard for me (all were tasting menus with wine pairings...) as they would have for a table for 2. This is one situation where I thought that basing the tip solely on a percentage of the bill would be inappropriate.

              2 Replies
              1. re: Dan G

                Dan, your server served one person not two, so why overcompensate? If two people are sat at a four person talble, should they tip as they were four? It's part of the job not always getting max capacity every single night. Just like the carsalesman doesn't sell each and every car at full MSRP.

                1. re: Rick

                  I guess what I was trying to say was that i think the whole idea of tipping as a percentage is really stupid, and the person should be paid for the amount of work they do. If they are working hard serving me for 3 hours, they deserve to make as much as they would serving more people. A bit less, as one person is a bit easier than 2 (or 4) but not too much. I don't feel I overcompensated - I paid a person a reasonable amount of money for providing a service.

              2. Why not? It's the norm in the industry. As others have said, what you get paid (in any job) isn't always a reflection of how much "work" it is. Besides, your breakfast server likely didn't have to share their tips while your dinner server likely did.

                1. It is a very good question, Anne.

                  If you think about it, it doesn't necessarily make a lot of sense. Think too about the oft-quoted advice that a neighborhood restaurant deserves only 15%, but a "fancy" restaurant deserves 20%.

                  Someone working at Chili's may have to work a lot harder than someone at Chez Fru Fru, since tables turn faster, and waiters generally have to work bigger sections. Also, the food itself is much more expensive at Chez Fru Fru, so the waiters there would be making more even if they weren't getting a higher percentage.

                  Think about it, what requires more work - a 6-top at Chillis all ordering $10 entrees and needing constant refills of coke - $67.50 before tax, or two people at Chez Fru Fru each ordering $40 dollar entrees plus a $70 bottle of wine - $150 before tax. Why should the Chilis waiter only get $10.25 from his 6 top and the waiter at the fancy restaurant get $30 from his two people?

                  1 Reply
                  1. re: Reefmonkey

                    First of all the waiter at Chez Fru Fru will most likely be much more experienced and have more training and be better at his job than the waiter a Chili's. Secondly, the waiter at Chez Fru Fru will serve turn his tables many fewer time than the Chili's waiter. So using your math Chez Fru Fru waiter will get $30 for his 2 top a maximum of 3 times a night while Chili's waiter will turn his 6 top over at least 6 times a night. He will also work more tables than the waiter at Chez Fr Fru so he has the potential of making close to what Chez Fru Fru makes. Is he working harder? Yes, but we don't get paid by how hard we work. If that was the case than a ditch digger would get paid more than a licensed, unionized, heavy machine operator.