Tip Inflation: We’ve Got Nobody to Blame But Ourselves

One of my articles that continues to get a steady stream of comments is a post I wrote imploring people to not feel guilty for tipping their servers 15 percent for average service.

In that piece I noted that the standard tipping guideline for expected service was 15 percent for as long as I could remember.

I also pointed out that nowadays a lot of people are pushing 20 percent or even more as the standard for average service, which I think is ridiculous.

Although I didn’t cite any references, I wasn’t making that claim up. Even as a kid I remember going to restaurants with my folks and figuring out the tip for Dad. He obliged me almost every time simply because he knew I loved to do that sort of thing. His rule was fifteen percent for good service, twenty percent for excellent service.

Yeah, Len, well maybe your dad was a cheapskate — just like you.

Sorry, but I don’t think so.

Obviously my opinion doesn’t endear me to the great majority of American waiters and waitresses.

Still, my recollections regarding tipping standards are backed up by the Wall Street Journal, which points out that the standard tip for servers was ten percent in the 1950s before it rose to 15 percent in the 1970s. And MSN once proclaimed that “20 percent is the new 15 percent.”

I assume if the trend continues, our great great great grandchildren can expect to cough up a 40 percent tip for average service (and 50 percent if it is excellent).

So what’s going on here? Why are tipping rates steadily creeping up over time?

Well, that same Wall Street Journal article points out an interesting theory posited by a Cornell University professor who has written over 40 papers on tipping: most people give large gratuities to make a good impression on the server. Likewise, most people tend to leave average tips for poor service because they don’t want their server to dislike them.

Let me repeat that again: most people tend to leave average tips for poor service because they don’t want their server to dislike them.

WTF? (Please, no letters; it means “what the frijoles,” folks.)

Not only is this upside-down psychology straight out of Alice in Wonderland, but the end result is a slow uptick in the inflation rate of tips for average service.

Even worse, over the slow march of time, that attitude also can’t help but foster an entitlement mentality in the restaurant staff. After all, why should a server go out of their way to give excellent service when they can give lousy service and still expect to get a 15 percent tip from weak-kneed customers afraid of insulting them?

Never mind that, in reality, it is the customer who should be insulted for spending their hard-earned money only to have their experience ruined by poor service.

In the end we have nobody to blame but ourselves.

Well, truth be told, I blame all of you because that’s not how I think at all. (Thanks, gang.)

If I get poor service, the server is usually going to get ten percent with the hope that the smaller tip will encourage him to do a better job next time. If that happens to tick him off, hey, so be it.

Think about it. When we patronize sit-down restaurants we do it because we’re hungry and looking for a relaxing evening away from the kitchen, not because we’re trying to gain a few more Facebook “friends.”

So why worry about a server disliking you simply because you gave them a poor tip for poor service?

Besides, don’t you have plenty of friends already? In the off chance you don’t, drop me a line and I’ll be happy to friend you on Facebook.

46 comments to Tip Inflation: We’ve Got Nobody to Blame But Ourselves

  • That is ridiculous! I tend to throw a dollar on purchases under $10 and then the same as you above that. 15% for good, 20% for excellent and more for amazing. If the service is terrible I leave 0 or sometimes just a penny or a quater. After all the tip is to pay for service and if you don’t get any why should you pay?

  • mdb

    10% for poor service, I leave nothing. Of course when you do this ZERO out the tip, with two lines across the whole field and write the total very distinctly to avoid the server from changing the values. It was done to me once, and I am glad to say the waitress was looking for a new job after I received my credit card statement.

  • Ron

    “most people tend to leave average tips for poor service because they don’t want their server to dislike them.”

    The problem is that people aren’t growing up anymore. They’re perpetual teenagers who fret over what everyone thinks about them. They buy cars and houses they can’t afford then fight like crazy to get someone to bail them out when things go haywire. They get semi-frugal only when everyone else is, they let their hormones dictate whether they stay faithful, they want everything they see on TV, and live their lives text messaging on the highway … and these are the adults?

  • The reason waiters and waitresses are pushing for higher tips is because their wages aren’t going up. Minimum wage wasn’t raised for almost a decade and it definitely hasn’t kept up with the cost of inflation. Also, the cost of meals at casual dining spots are down because of the recession. You can get two meals and an appetizer for $20 at Chili’s or Applebee’s.

    Unfortunately, service seems to have gotten worse. I seem to remember servers being much more friendly and attentive. Now, it’s difficult to get their attention and then they seem annoyed when you need something.

  • Frank W.

    I agree with Bret as to why expected tipping rates are going up. The big problem with this is that the burden is being placed on customers to increase the wages of servers. That’s a crock if you ask me and I refuse to accept that. I agree with you that 15% is a fair tip for avg. service.

  • JLP

    Bret:

    Inflation has impacted the cost of food. If the tip is based on the cost of food, then the tip has also gone up over the years. In other words: people need to quit their griping.

    When I take my family out to eat, the bill is almost always around $70. If I get good service, I’ll tip 20%, which I think is generous for 45 minutes of work (it works out to over $18 per hour not including minimum wage). Servers almost always work more than one table per hour. I know there’s some tip sharing going on, but overall, it’s not a bad gig and it’s great experience for kids.

    BTW – I have been known to leave much more than 20% for outstanding service.

  • Gosh Len, looks like not many are griping about your tipping policy. It is right in line with mine also.

    My son was a server while in college. He was fine with 15%. Unfortunately he had many of the 0% even with good service(at least in his opinion).

    Great service is not a standard any longer. I usually also thank the server for going out of their way verbally in addition to the money. And if there is a floor manager around-let them know when your server does a good job!

  • For us, 10% is for okay service, 15% is for good service, and 20% is for “Wow-I want them to come and work for me if I had my own business” service. If the service completely sucks, I talk to the manager…

  • Thea

    Bret, come on. Servers have a job to do. I have some experience in the server arena-if I was disturbed about my ‘wage’ not going up, I would work harder to do a good job and hopefully get a better tip. Tipping is not about what the industry is paying or about when minimum wage went up, yada, yada, yada. It’s about service right now, during your meal or whatever.

  • I’m going to have to agree with you again, Len. This is getting to be a habit! I give 15% for average service, which around here is common. I have to be impressed to give more. Terrible service means I’ll probably complain to a manager, and then never come back. There are so many good restaurants around here I don’t have to tolerate crappy service.

    I agree with Bret why servers are pushing for higher tips. However, the recession (which I think is a depression) is hard on just about everyone. Workers are required to do more for the same money, or less in the case of my friend who works for an airline. Servers will just have to hustle more if they want bigger tips.

    That’s funny that people want their server to like them. I could see if they live in a small town or they have to go to that place regularly, but otherwise, who cares? I don’t eat out a lot so I rarely see the same person twice.

  • I’m cheap and I’ll be the first to admit in. 20% isn’t the new 15% for me. I stay at 15% and if you’ve done a GREAT job I might go up to even 25%. That has to be really exceptional. Crappy service? Nada. I mean not a penny. I vote with my money.

    That said, if I frequent the place often, I’ll leave 10-12% because, as I said on Twitter, I don’t want them to spit in my food the next time that I go back. It’s self preservation, and it’s worth it!

  • @Forest: I have left less than 10 percent for poor service before, but I try not to unless the server is extremely rude (which is almost never).
    @mdb: Yes, I always draw a line through the tip section when no tip is required or – rarely – deserved.
    @Ron: I’m still gobsmacked by that quote myself. Is it really true? I mean, really? The thought of giving an average or good tip for poor service because I wouldn’t want the server to dislike me has NEVER crossed my mind.
    @Frank W.: Great minds think alike, I guess! ;-)
    @JLP: I too have left tips of over 30 percent for outstanding service – so please no more cheapskate emails, folks. LOL
    @Dr.Dean: I like your thinking! I need to give more verbal praise to my server when I receive excellent service. I know I always appreciate hearing “job well done” from my boss.
    @BIFS: Me too.
    @Jennifer: Great point! We’re all having to become more efficient in our jobs just to maintain our current standard of living.
    @Sandy: I think if you frequent a place with only a handful of regular servers and you can’t stand the thought of not returning because of consistently poor service, the 10 percent (minimum) rule is probably a good idea. Although I would be talking to the owner about looking into getting better help.

  • Money Funk

    I always just double the tax from the bill for a tip. I think that’s around 16% in my area. Of course, that’s for good service ;) if it’s not good service, I leave a $5. But if it’s really bad service, they’ll get $1-$3.

  • Len,
    It has been 15% for decent service ever since I remember. But I might leave more if I am worried that the waiter might not like me. Just joking!

  • Len, Here is another take. With these times of low inflation, restaurant meal costs have not increased much. If one feels the cost of the meal is relatively affordable, based on their income, they may feel more apt to offer a higher tip to better compensate the server.

  • Frith Shull

    I don’t care much if a server likes me, since I tip at the end and we probably won’t remember each other the next time we meet. I do tip 20%, though, because I want servers in general to feel confident in the effort/money relationship. Think of it this way: you can’t influence the service you get on Thursday by tipping at the end of your meal, but you can influence the service someone else gets on Friday, positively or negatively, but only very generally. For this reason, tipping is a terrible system. If a server is willing to do A for 10%, B for 15%, and C for 20%, but has incomplete information on how a patron is willing to pay for A, B, or C, much less which constitutes “good,” “exceptional,” or “poor” service in the mind of any particular patron, the market’s not very efficient. Much better to raise prices and wages, so all information is in the open and everyone can make decisions accordingly.

  • I am a generally a high tipper- usually more than 20 percent if the server was good. I had zero money for a good part of my life, and now that I am no longer struggling, I like to help those that are working hard.

    However, if the service is poor, that is another story. Then they aren’t working hard and don’t deserve much.

  • I tip 20% almost all the time (in cash, in singles if I have it), and it’s not to get the server to like me. Although there is some merit in this if a person is a regular. I have been blessed to never have had to wait table. My 20% is my signal to karma to keep from ever waiting tables, and if I do have to wait tables don’t let it be for a long period of time.

    That is my tip policy. If I go out, I do the tax and tip calculation in my head before I order. If I only have $20 budgeted to the meal, I better be able to eat, tip, and tax with $20.

  • My personal policy is to tip 20% for good service. But I rarely go out to eat so its a treat for me and for them. Ever once in a while I will go to a fast food place (like MCD breakfast) and I like to tip a little something at the drive through window or at the counter. They don’t expect it and its something special I can do because I know what it was like to work for minimum wage.

  • Oh boy did this really crack me up:

    “So why worry about a server disliking you simply because you gave them a poor tip for poor service?”

    The other night the service was so bad that when we asked to take some food to go, the server just handed us the container. She did NOT even bother helping it all. So of course she got less than 10%. One of my friends felt bad. But at the end of the day, how can you feel bad?

  • Kristyn

    @ Pat@DNW: Pat, Some restaurants have policies in place where if someone wants something to go, the server is only to provide them with a container and not package it for the customer. As a server, I would suggest you ask for the container…many servers aren’t as conscientious as I am when moving the food from plate to container and I’ve seen some unhygienic things happen (server picks up food that fell onto counter and tosses it back in container, server uses fork from different customer at same table to scrape food into container, etc). *I* stop servers when I see them about to do stuff like that and mention it to management but to be honest, in my busy restaurant (and some of the other ones I’ve worked in), I think I’m the only one who really cares.

  • I almost always do 20% because I used to be a waitress, so I’m biased.

    I didn’t realize everyone was doing it, but from the comments it seems like that’s the case.

  • It might have to do with the frequency of how often you go to a certain restaurant. Visiting from out of town, chances are you are going to leave a normal tip, regular, chances are you know more people attending / working at the restaurant.

  • @MoneyFunk: Doubling the tax is a tried and true approach, Christine, assuming you have a good handle on the tax percentage. In some low-tax areas – not here in SoCal, as you and I both know! – that may end up shortchanging them though.
    @Joe: Uh huh. Me too. I love old-school engineers like you (and me) Joe!
    @Barb: Interesting point, Girlfriend! :-)
    @Frith: I understand your points completely. I’ve considered your position for a long time. In fact, I used to be in your camp, but upon further reflection I think I prefer the tipping process because it allows the customer to have more leverage in influencing his quality of service. The system is not perfect, but I think it is better than the alternative of accepting higher prices and losing that leverage.
    @Everyday: That’s okay, Kris! I won’t hold your over-tipping against you. ;-)
    @Chanda: I bet you have a lot of good karma saved up in your karma account by now. Definitely more than I have.
    @Norman: I never even considered tipping fast food employees. When I worked as a box boy we were not allowed to take tips from customers. I bet I was offered a couple hundred bucks in about nine months time, and I had to turn all that money down. Actually, I probably could have pocketed all of it because nobody would have known, but I didn’t.
    @Pat: No reason to feel bad. I say you are doing the server a favor. As Frith pointed out, your tip provides her with a market signal that she needs to step up her game. That helps future customers that follow you – and her too!
    @Kristyn: Your story made me laugh. The lack of hygiene can be pretty funny – as long as it’s not affecting me, that is. I’ve been in restaurants where the servers have told us to pack our own left-overs. It’s not uncommon.
    @First: It sure does. And it’s all your guys fault. ;-)
    @Jenna: You’re right. I know I tip my regular servers at my fave restaurants more generously.

  • I agree with your numbers, Len. I don’t think it’s my job to make up for poor wages and don’t agree with that reasoning for rising “standard” tip amounts.

  • Oh, tipping inflation has been one of my pet peeves. I don’t mind the 20% for good service at a restaurant, but I’ve done entire posts on the tipping gone wild in America for goods and services that never had tips in the past. Examples – the chick scooping my ice cream, someone pouring me a coffee, the guy in the bathroom trying to hand me a towel that I could grab myself. I don’t tips forced upon me for things that didn’t garnet tips generations ago. If this is the new normal, I don’t like it.

  • Chris

    I just wanted to point out minimum wage isn’t actually minimum wage for servers. This is from the Bureau of Labor Statistics website “but the employer must pay at least $2.13 an hour in direct wages” yes you read that right the MINIMUM a server can be paid by a business is $2.13. The idea is the tips make up the difference allowing them to make at least the federal minimum wage. What people don’t realise is that doesn’t always happen.

    My rule of thumb is good to very good service gets 20% or more and what I’d call standard service gets 15% poor service less. This is mainly because one place I frequent I know was only paying the waitresses $4.18 an hour. If they got few tips they didn’t even make minimum wage.

    • Emily

      Chris, but isn’t it the employers responsibility to ensure the tip + direct wages = at least minimum wage? I work for a pizza chain where the drivers are paid slightly below minimum, and we have to be mindful of their tips to make sure they’re not working for below that standard.

  • Susan

    I personally don’t think that people are all that concerned about the server disliking them.

    I do think that many people want to avoid appearing cheap or negative in front of their dining companions. Who wants to end a date or business lunch by complaining about the waitress? I find that this is especially true for groups splitting a check.

    Other people might tip out of a sense of sympathy or obligation, reasoning that everyone has bad days and servers make basically nothing without tips.

    There may even be a few who are afraid of being confronted over a lousy tip, but that not’s really the same as wanting the server to like them.

    • I hope you’re right about most people not being worried about a server disliking them.

      Despite all the discussion about poor service, my experience has been that servers provide good to excellent service 95 percent of the time — which means, they’ll get a tip from me that’s less than 15 percent only 1 in every 20 times I go out to eat (actually, that seems high… it’s probably less than that).

  • Mark

    Both your articles are fantastic. I was a waiter back in college in the mid-90s, got 15% tips and was thrilled with my takehome. The whole “20%” thing just got started because it’s easier to mentally calculate 20% (move decimal to the left and double) than 15% (move decimal to left, take that number and add it to half of itself), then waiters got used to it, now they demand it. I’ve heard many of them justify their claim that 20% should be the minimum tip by bringing inflation into things. Well, since tipping is a percentage, and inflation has brought up the cost of food, tips automatically keep place with inflation, even at 15%. Kids become waiters because the tips make it a very lucrative job – way more than folding jeans at the gap. Customers need to STOP giving in to the pressure to increase tipping percentages. If we stopped this egregious overtipping, and waiters started bringing home less, they might be tempted to get jobs outside the field. This would make restaurants have to pay more to attract good waiters, and so maybe they would pay a decent base wage. Why should restaurants be the only industry not required to pay minimum wage, and thus thrust their payroll responsibilities directly onto their customers? Another thing, because waiters’ pay is all about tips, they have to turn tables fast. That means they are constantly rushing customers to finish their meals. You can’t enjoy a leisurely meal – plus, it’s a medical fact that people who take their time eating their meals are less overweight and healthier. Not only is the tipping making our meals more rushed, it’s making us fatter.

    • Hey, thanks for the terrific comments, Mark. I agree 100% with everything you said — even the part about tipping making us fatter. (That would make a great article, by the way!)

  • I completely agree. I still base my tip off of the 5 10 15 rate. I’m sure some servers would call me stingy, but I’m not. I am well aware of how much wait staff makes, and how much they don’t make when there is nobody there and they are doing menial work, but it’s a menial job that requires menial education. In some finer restaurants where the wait staff is better educated on wines etc then their pay goes up because the food price goes up. My last anniversary a 15 percent tip was 52 dollars for 45 minutes work. A quick scan of the place and some head math put that guys earnings at about 500 an hour for probably 4 hours a week fri/sat which comes out to 50 grand a year not counting the smaller amount for the other days of the week which is more than educators make here.

  • Undis Closed

    Crazy I say are the suckers who tip blindly on ‘social convention’.

    Next, we’ll hear you need to tip the bank teller, the shoe salesman, and the grocery checkout clerk.

    If service-industry staff can’t survive on their wage, unionize or do something else for a living. EARN a tip and it’ll be yours. EXPECT a tip when you’re undeserving of one, and suffer the consequences.

    No tips for fastfood, delivery, cabbies, paperboy, dentist, snow-shoveller. The rates posted are the rates paid.

    Poor service? gets One Penny.

    Which would otherwise be zero, but the penny says hey you scumbag I didn’t forget the tip, it’s actually a penny because the experience you provided was sub-par.

    Average service 10% of the pre-tax amount.

    Above-average service, 15% of the pre-tax amount.

    Stellar service, on the other hand?

    No pre-set limit. Could be 100%, or even more.

    Think 10 points is stingy? Let’s remember, the majority of cash tips remain hidden under-the-table and the amount needs to be grossed-up to reflect it being tax-free.

    Exemplary performance merits exemplary recognition.

    10% standard is a fair amount for a fair level of service provided.

    Tipping for poor service rewards incompetence.

  • Tom53092

    Tipping amount inflation:
    The standard has always been 15% of the PRE-TAX amount, maybe a little higher for a low-priced meal, like breakfast at Dennys. Thanks to the internet and lots of posts by service industry people and “Guidelines” sites that purport to speak societal standards, they now proclaim that 20% is the new 15%.
    Oh, and when those handy tipping guidelines are printed at the bottom of your receipt, they are always calculated on the after-tax amount.
    Since service people have bought into the 20% standard, it is now expected. If you leave 15%, they feel STIFFED.

    Service grade inflation
    The bar for “exceptional” service has been lowered. A lot. The following are now considered exceptional rather than standard service:
    - The waiter can give the order to the person who ordered it without asking (“Who ordered the XXX?”)
    - Your water glass/coffee gets refilled once before the check arrives.
    - Your empty plates are taken away before you put your coat on to leave.

  • Tom53092

    While some may feel that 5% is not much of a difference and shouldn’t matter. Even at a modest casual dining place, at, say, $50 for dinner for two, that’s a $10 tip. A LOT of people these days are chosing to eat at home, or eat at self-serve restaurants. That requires no tip at all, and saves 20% right off the top.

    Servers: be happy with your modest 15% tippers. They have chosen to give you the opportunity to make a living.

    • Len Penzo

      You are right, Tom. Five percent may not seem like a big difference over one meal, but over a lifetime of restaurant meals, it becomes a significant amount of money.

  • S.

    I never tip for lousy service. In fact, if a server starts out on the wrong foot — i.e. not taking a moment to say, “I’ll be right with you” if the place is particularly busy and we’re waiting for drink orders to be taken — I usually ask to be re-seated in another section.

    As mentioned, if I am spending money to eat out, the least I expect is good service. And I tip accordingly.

    In every job I have ever had, I did my best to give 100% to customers and clients with every interaction.

  • 1 person 2 another

    I tip on the high end (15%-25%) most of the time because of medical needs, I have to make special requests. I feel that since I require more service I should pay more. I have been known to not leave a tip and talk to manager if my medical needs are ignored.

    I also am a repeat customer at the local place and it seems that the generous tip in the past has been rewarded in better service today.

  • tonia delger

    don’t go out to eat where you have to be waited on if u don’t want to tip! dollar menu right down the street. servers get paid 2.01-2.13 an hour! some places the server has to tip out other employees a percent of their sales, so if you don’t tip enough the server will have to pay to wait on you. if you are going to tip bad DO NOT go back because servers remember and talk about who tips bad or good!

    servers might make that 18.00 for that one table but had to waited on you for hour and a half, plus they will only have one other table, and then they have to tip out the busboy, the qa, the hostess, and the silverware roller! what if there is no business? no business means no money! its a game of chance. here, i’ll give u a job where u might make 2.01 a hour to 10.00 a hour! it’s a gamble. just because you tip 20% doesn’t mean the next three tables will tip 20% or leave anything for that matter! again, i think people expected more than they use to. i understand that prices have gone up and your chicken is smaller but this is not the server’s fault. servers get paid 2.01-2.33 a hour this has not changed for decades!!!!

    quit your job and become a server for a year then tell me 20% is too much to tip!ha

    • Kim

      Well said. They don’t realize that they have to tip out other staff food runners, bar, etc. So if you don’t leave a tip or a crappy one that waiter is actually paying out money. Does that make you feel like a good human being? If you don’t have the money to pay for your service, i’m sure there is a McDonalds down the street.

  • Ryan

    I am a full time server at a chain restaurant where I have worked for two and a half years. I can tell you that I tip twenty percent when I go out to eat, although I have been known to tip ten percent for appalling service. I have never not left a server a tip – no matter how horrible I perceive my service to be, I cannot say for sure that it was my server’s fault and not the fault of the kitchen staff, the bar, or even management. It is true that servers only make $2.13/hour and that this wage hasn’t increased in decades. It is understood that if you are dining out, your tips will be combining with my hourly wage to make standard minimum wage – patrons are expected to tip, and to clear up any confusion, industry standard is 18.5%. It is also true that servers tip out. I give 3% of my SALES, not my tips, to the bar and to the hosts. This means that on a $50 bill upon which I did not receive a tip, I am required to pay $1.50 out of my pocket because as a server, I support the wages for the bartenders and the hosts. Just keep all of this in mind. Serving is incredibly challenging but it can be very rewarding for servers who are willing to work hard and smart. In our current economy, I am grateful to have a job at all and I wouldn’t have stayed at the same one for two and a half years if I weren’t making enough money to support myself.

  • Daniel

    Ok, for starters minimum wage for tipped workers has been stuck at $2.13/hr since 1991 (thanks to Herman Cain ). Second, even when I (or others) give excellent service I have been left 5-10% on numerous occasions. Servers also maintain the restaurant, are there before and after the rush, and wait on people who camp in their section during rush. 15-20% should be the norm. I’ll be honest with you. I have been on both sides of the isle and I have had a much higher percentage of bad tippers compared to receiving poor or aweful service deserving of a low tip. Basically I am saying that Americans tend to spend a lot of time being petty and scrutinizing their server, and If they spent that much time scrutinizing their legislatures instead for maintaining unfair living wages then this blog wouldn’t exist. If the service is really bad you should just speak to a manager. Since there are jerks who leave $2 on a $75 tab for good service (as I have received), leaving a bad tip might not get the message across (bad service). If you want to make real change you can’t be so passive aggresive about it. If you got your food you should tip for that. When you get bad service at a hospital, or your mechanic, you still pay the fee. You just complain or don’t go back. Same should go for food service.

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