Tipping: Down and Out

| February 20, 2009 | 21 Comments
  • 21 Comments

penny-pinchingThings are tough all over. This isn’t exactly news. I can’t think of a single person I know who hasn’t been hit on some level by the mess our economy is in. Everyone, it seems, is scaling back on spending.

And who can blame them?

In a city that prides itself on its food scene, San Francisco’s restaurants have taken a very hard hit. With fewer people lunching and dining out these days, many places in the city have either laid off staff or cut their hours. Some once-favored haunts have decided to close their doors for lunch, some have chosen to to hang out the “Now Open for Sunday Brunch” sign (which is usually an indicator of fiscal desperation), some have been forced to shut down permanently.

As a professional waiter, I consider myself very lucky to be working in a popular and (blessedly) busy restaurant. Hell, I consider myself lucky to have a job. Period.

Tipping Down

The current trend in dining these days seems to be downsizing– from the price tag of the wine purchase to the amount of food ordered. Perfectly understandable. Not a single server I have talked to about the situation was unsympathetic to the current, collective economic plight. People are ordering fewer bottles of wine, and more are going for what some refer to as “non’trées”– the ordering of appetizers in lieu of main courses. It’s a hit to our wallets, of course (I have personally seen an average 30% decrease in my own sales), but we know were not the only ones. It’s been openly discussed at our staff meetings that the guests who were dining with us in the fat times are still here with us in the lean ones, and we should be ever mindful of that. Which, for the most part, we are. The goal is to keep them coming back. We are making less money, of course, but we are working harder for it.

And that’s fine.

What isn’t fine is the much more alarming trend that seems to be running apace with the downsizing of dine-out meals– the downsizing of tips. Along with decreased sales, servers are seeing a general lowering of their gratuity’s percentage. And this is not okay. Not at all.

Tipping Out

I’ve always wondered if people who have never worked in the service industry know how restaurant tipping actually operates. It’s a subject that most people probably don’t give much thought to. You tip your server, she pockets the money, and goes home with it at the end of the shift.

But that’s not how it works.

In a recent phone interview with a reporter from a major national newspaper, I was asked about the current economic situation and how it was affecting San Francisco restaurants. In relating my own experience, I told her roughly what I sell on an average night and what my tips are like. When I told her where exactly that money went, how I am taxed on my sales, and what I actually walk out the door with, she was surprised. She explained to me that, in all the years she had been covering restaurants, she had never even thought to ask about the process of tipping out. I respected her for that admission. And it dawned on me that, if she didn’t know, how many diners do?

If I am given a $50 tip, on a $250 bill, that’s wonderful, but it’s not exactly all mine to keep. In most restaurants, especially high-end places, a server is not simply working for his own tips. In my place of business, the gratuity I receive from any given table goes towards supporting nine other employees. Ten, including myself.

Here’s an illustration of what is occurring with ever-increasing frequency in our restaurants. Possibly just a bad turn of luck, but it illustrates what really happens when a good server receives a bad tip:

I’ll use the example of a fellow waiter who took care of some regular guests and four of their friends. The waiter in question is extremely professional– fun and chatty at the right moments, formal and efficient at other times, or any combination of the above-mentioned, as each case necessitates. And, above all, he actually cares about what he’s doing. He puts his heart into his work.

The regulars and their guests were treated to a few complimentary appetizers and were well taken care of, as usual. When the bill arrived, it was not the regular guests who paid, but one of their tablemates. On a $500 check, the guest left the waiter a $20 tip. Needless to say, the waiter was upset, but could say nothing, except to his co-workers and manager. Vent it, shrug it, face it, let it go. Hopefully do not repeat– that is often our sanity-saving mantra.

His tip may have been $20, which is insult enough, given his high level of care and service. The financial damage, however, is far worse in such cases.

The Break Down

Granted, the “tip out” (what a server tips out to his support staff) varies from restaurant to restaurant. Some houses pool tips, others ensure that the kitchen staff receives a percentage. The permutations are endless, but all enacted with the goal of supporting the other, no-less-important members of the service team. This is how it works at our place of business:

Tip outs are often based on sales, not the total amount of gratuity.

On a $500 sale, the waiter must give, at the very minimum:

Busser: $15 (3% but usually closer to 4% since a busser is a server’s chiefest ally)

Food Runner: $5 (1%)

Hostess: $5 (1%)

Bartender: $6.25 (1.25%)

Our stocker receives $5 per waiter as a flat fee every shift, our barista receives $10.

We do not ever decrease the amounts given to our support staff.

Having been given $20 for his services, the waiter actually lost about $12 taking care of these guests. And that’s just on the surface. The IRS calculates roughly 8% of a server’s sales as taxable income, owing to the variability of tipping. 8%, in this instance is $40– more than twice what the waiter was paid.

Clearly, I am biased. I have a vested interest in people tipping properly. And by properly, I mean 15% at the very minimum for basic service. Good service deserves 20%. That is our custom.

The goal of this post isn’t to shame people into tipping more. My readers are, by and large, pretty savvy in these matters. I just have the feeling that, if more people understood where that tip money goes and what the consequences are to those who bear the double brunt of lowered sales and lowered tips, they might think twice about saving that extra few dollars by leaving less money to the people who take care of them.

If you are well taken care of, take care of your caretakers.

Amen.

And pass it on.

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Category: hospitality, restaurants, bars, cafes, san francisco

About the Author ()

I am terribly fond of martinis, Edward Gorey, and sleeping with many pillows. You are more than welcome to follow me on Twitter: @procopster
  • Bill McCann

    Just a quick confirmation of what Michael sys from the opposite coast. Thank you, Michael, for spelling out the real world compensation necessities for restaurant service staff. Before I retired I was an actor which is to say I worked in the arts and therefore had to rely on income from bussing tables etc. It is very important for the public to be reminded regularly that the good service they receive requires appropriate (20%) tipping in good times and especially in tough times like today.

    Springfield, Massachusetts

  • rj

    Since we’re venting here I’d like to join in from the other side. My husband and I always leave a minimum of 20% tip. If we split a meal we figure what the check would have been if we’d ordered two dinners. However, We do not drink alcohol. When we order water to drink (tap water being the fashion these days a la Alice Waters) The waitperson’s face freezes and we get the worst possible service they can give. Our meal is an unpleasant affair. The reason we tip the way we do is that I used to be a waitress. I know how hard you work. I know you get stiffed. But, why should I be treated disparagingly when I pay you your due? Why should MOST of my meals be ruined? I like water. Is that a crime? If anyone has a workaround for this problem please submit it here. I don’t want to give up eating out. I love food and I love people. I really would like to be treated nicely.

  • sc

    I never know what to tip when I am picking up food to go at a restaurant. Anyone have a rule of thumb for that? Nothing, 10%, 15%? Does the hostess or waiter that I deal with have to pay out a percentage of those sales? I typically tip 10%, but I don’t know if that is unexpected.

  • http://michaelprocopio.wordpress.com/ Michael Procopio

    Thanks Bill. Thanks very much for your response!

    RJ– Well? First off, if a server’s face freezes when you order water, then the server is an unprofessional jerk. I’m sorry you encounter these problems. I’ve got several people close to me who do not drink, either. I’ll have to ask them about their treatment sometime.

    However, I think you’re actually the first person to actually vent here. The post was not a rant at all, but written with the realization that most people probably don’t know what happens to their tips after they’ve been left.

    I hope you feel better for ranting, nevertheless.

  • Denise Lincoln

    Hi Michael — Great post. People need to know that their tips are distributed. I think too many people feel they are rewarding their server, while in truth tips are the predominant income for most of the people who work in a restaurant. 15% should be the bare minimum for a tip. Personally, I think restaurants should just pay salaries, as they do in Europe, but that’s another matter.

    On the other hand, I empathize with RJ. When I was pregnant I didn’t order wine; this often led to a server completely ignoring our table as she/he saw little payoff, which seemed quite unfair. Basically, the whole system is a mess.

  • cmh

    For dining in, I have always used 20% as a baseline for tipping. The service has to be really bad or server very rude for me to take that down. If they’re super, I add. Having said that, I had never thought of tipping on take-out meals (or knew about the tip out system) until last year when my daughter started working as a barista in a restaurant – responsible for the take-out meals. I felt ridiculously lame and guilty thinking about all the counter take-out servers/hosts that probably thought I was a cheap shmuck. Just never occurred to me. Now my personal take-out rule (depending on how many people seem involved in getting my order to me) is 15% minimum because typically the servers, food runners, bussers are not tipped out on this money. Let me know if I’m still being lame.

  • Ben

    I think the whole system of having the server share his/her tip with the various people in the restaurant is crazy. When dining out, most of my interaction is with the server, so he/she can determine my experience so I tip appropriately to that experience. If a great waiter gets a big tip but I was ignored when I came in by the hostess, why should that great tip go to her? And if a bus boy ignores my request to clean up a mess at the table, why should he get a share of the tip? I agree with the eariler comment that restauranteurs need to put certain people on salary like the hostess and bus boy who provide a basic need. The server is providing more, at times, and thus should be given a tip reflective of his/her work and his/her work only.

  • HD

    Ughhh. Once again whining about tipping. How about changing your profession? Waitstaff rarely tip out fairly. I have seen this time and time again in restaurants all over the city. A waiter walks with three hundred dollars and gives the dishwasher ten. If anyone wants to do a good deed… bypass your waiter and directly tip the back of the house.

  • Shannon

    HD, Michael’s is a calm and empathetic clarification of the tipping system for diners who might not be aware of the consequences of scaling back their tipping percentage. Though it sounds as though you might have taken a percentage in the shorts once or twice, which is never fun when it’s unexpected.

  • Steve

    When did it go up to 20%? It really used to be 15. I was there. I remember hearing that prices have gone up so the tipping does too but so did the bill total so it makes no sense. And is it 20% on the total including the tax?
    I don’t want to be cheap, really. I want great service (a rarity) and I want to be fair. But I’m thinking they have right in Europe.

  • the regular

    You mentioned appetizer “gifts” for your regulars in your example scenario. Can you give some insight into how these are handled on the back end? Does the waiter (or bartender) eat the cost of these items, or does the house absorb the cost? I presume that comps are part of the cost of doing business when you’re trying to appease an unhappy guest — that (often unwelcome) dessert to make up for a tardy entree, etc. — but what about “gifts from the kitchen” that arrive just because you’re a regular, or a friend of the house?

    I’ve always understood that, when a guest is the lucky recipient of comps, the tip should be based on the total check including the cost of the comp item(s). But a savvy-diner friend recently suggested that the cost of the comp comes out of the server’s end of the bill, so to offset this factor, I should be tipping my usual percentage on the actual check amount, and then adding 50% minimum of the cost of the comps.

    Have I been stiffing some of my favorite people all these years? (I presume the comps would stop if I had, but perhaps they just keep hoping I’ll come around to see the error of my ways.)

  • http://d8c.org Jonas M Luster

    > If anyone wants to do a good deed… bypass your waiter and directly tip the back of the house.

    Much as I appreciate the article itself, this statement is not without merit. Years in BoH and a year in FoH (6 months waitstaff, 6 months bar) do show the discrepancies and often leave me to wonder if there are actually places where FoH does a clean share with prep and line in the back (partie, sous, and above don’t need tips, we do have a little more leeway in negotiating wages).

    And, yes, Europe has it right. Leaving tips as what they were intended to be, a reward based gift, focuses the responsibility for fair payment back onto the employer, away from the customer who neither has nor should be forced to have an insight into the inner workings of the food service industry’s arrangements.

    But to the meat of the issue. I recently spoke with friends (after an elaborate meal) about tipping habits and customs. While most agreed on the twenty per cent rule, it opened the discussion to perceptions and knowledge. On a $800 4-person prix fixe, a $200 tip reflects – in the mind of the patron who sees (and that’s good) only direct interactions – a $500/h wage.

    “I’ve only seen my waiter when they brought out the food, combined maybe for fifteen minutes. So you want me to pay this person $200 for a 15 minute job when I pay the Ph.D. brain-surgeon in my clinic half of that?” asks one of my friends. Another chimes in, telling me about his brother who also deals with “customers”, this time of the not-so-friendly-kind, as a police officer, and who makes about $29/h. Do I agree with them? Not totally, but those are the perceptions and those are the realities of customer service and FoH.

    The solution, again, seems to put our foot down and demand work-appropriate wages and the return of tipping from a necessary contribution to the waitstaff’s bottom line to a performance based reward that serves as an addition to a good income. Europe has it right, I tells ya.

  • http://michaelprocopio.wordpress.com/ Michael Procopio

    First off, I want to thank everyone for their comments, good and unpleasant.

    Denise– Thank you. You’re right, a converation about salary vs. living off tips is another matter. Invariably, people tend to bring that up whenever tipping is discussed. And I happen to think that servers who ignore people with small checks are rather short-sighted fools. Not drinking? And…? Lot’s of people don’t drink, but they do eat. And if they are treated really well and the food is good, they will most likely come back. Hell, they might even come back with people who do drink!

    CMH– I don’t think you’re being lame. Take-out’s a tricky one for me, too. If your food is delivered to you, then you really should tip. I think the typical take-out tip is 10%. There are so many grey areas here. Rather than answer this myself, I’ll direct you to Michael Bauer’s blog– there was some good discussion about just this thing:

    http://www.sfgate.com/cgi-bin/blogs/sfgate/detail?blogid=26&entry_id=14053

    Ben– I suppose in some cases, sharing tips is crazy, but not in my case. If it weren’t for my busser and everyone else who supports me, I wouldn’t be able to spend as much time at table as I do. Since I’ve got such a great support staff, I can do what I should be doing– describing food items, answering wine questions, designing my diners’ meals, and generally making sure that they’re comfortable and truly enjoying themselves. Without that support, I’d be running around with my head cut off. I pay them out and I do it happily.

    HD– The only whining evident here has been found in the comment section. Waitstaff rarely tip out fairly? That’s a very interesting generalization. I’m sure that is certainly true in some situations, and that is clearly wrong. My place of work, for example, has safeguards to prevent such things from happening. You would have known that had you actually paid attention.

    Shannon– Lord love you, woman.

    Steve– You’re right, it really did used to be 15%. However, it’s been 15-20% for at least the past 20 years. I actually don’t advocate 20% tipping for sub-standard service. If I get lousy service, which is often, sadly, I leave 15%. If it’s rude or just downright hostile, I leave nothing and tell them why (Okay, that’s only happened twice in my life, but it ust felt right).

    20% is the standard for good service. If it’s great service, I leave more, since I come across it so infrequently.

    The Regular– Where I work, if I want to send out a dessert or an appetizer or a drink or whatever, really, I have to power to do it. Just to be nice. If I happen to like my guests or they’re new, etc. No cost to me. It’s just what we do. If a guest is unhappy with his meal, he’s not going to get bribed with a piece of cake. He’s just not going to pay for whatever it is he didn’t like. The comps in the story I illustrated were sent in good faith. Nothing was wrong, it was just a nice thing to do, that’s all.

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  • KiltBear

    15-20% of what? Subtotal? Taxes & Total? Is it actually fair to think 20% of the bar bill as well. The bar is already horribly marked up.

    That said, I typically go for 20% on the total minus tax, but I’m not a big drinker so quibbling over the bar bill for me isn’t as important.

  • Reivax

    This whole talk about ‘the system’ and the ‘unspoken’ norms for tipping is very interesting. Here is my perspective on this issue. The tipping system has made it easy for restaurants to justify bad service on those they perceive as being cheap. On the other hand, this also allows customers to pass judgment on the quality of service received. My opinion, the service anybody receives should by default be good; otherwise, I will not support that restaurant. Restaurants open to serve the public, a successful restaurant finds a niche in a community that needs to filled, unsuccessful restaurants are driven out by competition and by being unadapted to the needs of that community. In essence, the customers keep the restaurant alive (especially during an economic downturn) and keep the servers employed. Tipping is the cream on top. Expecting the customers to tip by default will in the long run cause those restaurants to become unpopular and antiquated. The fact that people are already feeling ‘guilt’ and ‘shame’ around the issue of tipping tells me that it’s not of matter of ‘if tipping’ will be phased out, it’s a matter of time.

    In other words, I think that smart and adaptive restaurants should start thinking about ways of phasing out this antiquated system of tipping; Its not that individuals are cheap, but rather the issue has become so troublesome that people would rather avoid having to deal with it. I’m sure, that if a restaurant were to open its doors as ‘tip-free’ they would have flocks of people at their doors. Instead, the tip jars at the side of every cashier has become the norm. The argument that the customer, on top of supporting the restaurant needs to subsidize the service they receive sounds ridiculous to me. Aren’t the customers already paying for the food and service they receive? Sympathy for those who take these jobs is always used as means of justifying this system. But remember, taking those jobs is a choice. Think about it this way, is being server a dream job that somebody wants to keep for the rest of their lives? I personally doubt it! In this sense, by tipping one is making server jobs seem like a ‘long-term’ profession. I suspect, that if you asked any server, what they would rather be doing with their lives, it would not be serving you. That’s for sure. I personally feel that ‘tipping’ is a way of subsidizing mediocricy. Instead of having server positions be open to those hard working individuals wishing to make something better of themselves (i.e. as a temp positions, or first jobs), they are being held as ‘long-term’ options for those who wish to lounge on the generosity of the customers.

    So, with this in mind, the question of tipping is not really limited to ‘is a person cheap or not’, but rather indexes an individual’s ideology. If you feel tipping is a way of helping those ‘servers’ who get underpaid and overworked, then by all means be a generous tipper. However, do not pass judgment on those who do not tip, as you do not know what those individuals may be doing to improve more important issues (i.e. health care, social services, etc.) affecting these so called ‘underpaid and overworked’ service sector jobs. I personally do not support this type of institutionalized laziness. Instead of having these positions be some sort of first-job or positions for individuals who have hit a wrong-turn somewhere, by tipping we are making them more ‘reliable’ professions. We, as a society, do not need ‘life-long’ or ‘expert’ servers. What we need are skilled and critical thinkers. We know the good things about tipping, but what about the bad? How does tipping prevent individuals from pursuing other goals? This is the question I pose to you. [How about starting a server-to-college program [just throwing the idea out there]; funding something like this seems more to my liking than leaving 20% at the table and calling this civil duty – that is an insult to those who are truly engaged in the act of civil improvement.]

  • Tina

    Chiming in really late thanks to the link from the 2010 tipping post. I don’t drink either, and I’ve definitely experienced that palpable drop in temperature from some servers (definitely not all) when I don’t order a drink. But the question I really have is out of curiousity due to this breakdown. If nobody at my table orders alcohol (and especially if they don’t order a drink at all, just tap water), does the bartender still get that 1.25% cut?

    Thanks for two very informative blog posts about tipping, btw. It’s been a bit of an eyeopener.

  • http://michaelprocopio.wordpress.com/ Michael Procopio

    Tina– Late or not, I am happy that you chimed…

    At my place of work, I tip out according to my total sales. That does, in fact, mean that I am tipping out the bartenders on everything, whether some tables have purchased alcohol or not, the same way I am required to tip out my barista, even if no one in my section has ordered coffee.

    And if your server looks down his/her nose at you for not drinking, that’s unprofessional behavior in my book. Guests are guests and should be treated with warmth, regardless of what they choose to eat or drink.

  • renee

    Of course Michael is right, but many servers only see dollar signs and those servers will probably not change unless they have to. The whole situation makes eating out a gamble for my husband and I, sadly. We can end up spending a fair amount of money on a terrible experience. There is no way to know ahead of time, unless we go to the same places and request the same servers. I makes me apprehensive of dining out and there goes the relaxation factor.

  • ImTalkin

    Note that he fail to mention how much he brings home at the end. This is because it’s at least twice as much as average salary. To add to this, most waiters just bring food.

    “above all, he actually cares about what he’s doing. He puts his heart into his work,” — most waiters just bring your food and that’s all. Most waiters don’t offer performance that only goes on in maybe 2-3 restaurants in the Bay Area. Despite all they still expect 20% tip on every order. Most people who pay them 20% tip actually have lower income.