Why Is Tipping Everywhere You Checkout?
maxinomics.com
maxinomics.com
> 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?
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.
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 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.
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).
Sure but the sales tax number for your establishment's particular location is constant, so you can still build it into the menu.
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.
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.
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.
If only a small fraction of people stop tipping, they'll get shamed as assholes and nothing gets changed.
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.
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.
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.
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.
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-...
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.
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.
Many of the very best restaurants in the country have fixed gratuity and still have absolutely extraordinary service.
Some how the country hasn't collapsed and all the hotels, restaurants, bars, etc continue to operate just fine and with good service.
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.
(Many restaurants I'm seeing have "18% gratuity automatically added" and yet still have a tip line for those who don't read.)
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.
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.
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).
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.
Define dignity first, maybe? A slave in chains can still have dignity, and the most wealthy and powerful of men can be utterly undignified.
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.
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.
afaik tips are taxed as income tax. Yes I'm sure practically it gets underreported but servers definitely would raise suspicions if they reported $0.
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.
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.
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.
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.
sorry, it's clear. I am not what?
Rest assured, I don't think you are :)
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.
I can't think of any place that bills service separately. They just say the menu is €20, and you pay €20.
* 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.
> 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.
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.
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.
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.
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.
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.
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?
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.
See how that works?
Also, quite a few jurisdictions do not have tipped minimum wages anymore.
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.
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.
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.
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...
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 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."
Dynamic pricing makes some sense in the concept of trying to capture maximum demand, it just feels horrible as a customer.
1- I'll make a scene
2- I'll never come back
3- It is probably a discrimination lawsuit waiting to happen
Again, not saying the outcome is different, but socially it won't be accepted, as it removes that veil.
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.
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...
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...
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.
No, it isn't.
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'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.
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.
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.
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.
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.
At least that's how I look at it. I'm not a fan either just articulating my attitude towards it.
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.
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.
So you tip the cashier at the supermarket? They bag your groceries for you
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.
> 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?
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
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.
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.
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.
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.
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.
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.
The issue raised is whether this arrangement punishes honest actors and rewards dishonest ones. The answer is "yes, it does."
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.
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.
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.
In most every transaction these days, customers are guilted into providing wages for essentially unpaid employees, and I'm sick of the mind games.
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.
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?
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.
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?
Why are you complaining about inflation? Just pay 10% more, it's that simple!
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.
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.
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.
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.
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.
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.
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.
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.
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
Just raise your prices at that point.
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.
Asserting that we need to trick each other to have a fair economy of services is ridiculous.
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.
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.
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! :^)
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.
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.
> 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.
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.
Any business with any sense should immediately fire such employees or risk losing customers.
[It’s more usual to pay for drinks one at a time in Uk bars, and unusual to tip if not eating a meal.]
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.
I might actually prefer that. The fake smiling creeps me out.
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.
But this tipping automatically, it's for the birds. As far as I’m concerned, they’re just doing their job.
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.
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).
4% of the world's population hardly qualifies as "everywhere".
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).
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.
Still, even the subway worker isn't exactly making bank over there. It's not bad to have the option for tipping.
I have noticed that several checkout systems compute tips after tax instead of pretax, so I always end up computing tip myself anyway.
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.