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

waiterIn the US, tipping is as American as apple pie.

As a kid I remember going to restaurants with my folks and figuring out the tip for Dad. And he obliged me almost every time simply because he knew I loved to do that sort of thing. His rule was 10% for poor to fair service, 15% for good service, and 20% for excellent service.

In fact, for as long as I can remember, the accepted tipping guideline for good restaurant service in America was 15%. Not any more. That standard decisively shifted around the turn of the 21st century. In fact, the standard moved so much so, that 20% has become the unspoken expectation today for merely average service.

Until recently, one restaurant I typically frequent offered a handy “tipping guideline” at the bottom of each meal receipt showing suggested tips of 15%, 18% and 20% — supposedly for fair, good and excellent service. However, my most recent bill from there now includes suggested tips at 15%, 20% and 25%. Ridiculous.

Yeah, Len, well you’re a pathetic cheapskate. Just like your dad.

Sorry, but I don’t think so.

I realize my opinion doesn’t endear me to the great majority of American servers — but my recollections regarding tipping standards are backed up by the Wall Street Journal. They report that the standard tip for servers was 10% in the 1950s before it climbed to 15% in the 1970s.

Unfortunately, that 50% raise in the standard wasn’t enough to arrest the tip inflation. In 2007, MSN proclaimed that “20% is the new 15%.” Then, in 2012 — only five short years later — the Huffington Post boldly suggested that restaurant tipping of 25% to 30% had become “the new normal.”

What?

It makes me wonder if tip creep will ever end. If not, our great great grandchildren will be coughing up a 50% tip for average service (and 60% if it is excellent).

So why are tipping rates continuing to climb?

Well, the Wall Street Journal provides us with an intriguing clue, based upon a theory posited by a Cornell University professor who studies tipping: Most people give excessive 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 the professor’s last point: Most people tend to leave average tips for poor service because they don’t want their server to dislike them. Really?

Talk about upside-down psychology.

Over the slow march of time, that attitude not only encourages tip inflation, but it also fosters an entitlement mentality in the restaurant staff. After all, why break your back to provide excellent service when you can slack off and still get a 15% tip from weak-kneed customers who are afraid of “insulting” their servers?

Never mind that it’s the customer who should be insulted after spending their hard-earned money, only to have it ruined by poor service.

The truth is, when it comes to tip inflation, we have nobody to blame but ourselves.

On second thought, I blame all of you because, frankly, I don’t think that way. I always provide 15% for good service, and 20% for excellent service — and if my server is truly extraordinary, then 25%. But for those very rare occasions when I get fair or poor service, I give 10%. Hopefully, the smaller tip will encourage him to do a better job next time. And if that happens to tick him off — well, I don’t really care. Neither should you.

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

So why worry about a server disliking you for dispensing a poor tip that properly reflects upon their lousy service?

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

Photo Credit: ralph and jenny

(This is an updated version of an article originally posted on October 27, 2010.)

Comments

  1. 1

    says

    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?

    • 2

      Rose says

      Same here. I can’t understand why someone who does a lousy job gets a standard tip. We tip very well for excellent service, and hardly at all for below average.

  2. 3

    mdb says

    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.

  3. 4

    says

    “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?

  4. 6

    says

    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.

  5. 7

    Frank W. says

    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.

  6. 8

    says

    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.

  7. 9

    says

    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!

  8. 11

    Thea says

    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.

  9. 12

    says

    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.

  10. 13

    says

    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!

  11. 14

    says

    @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.

  12. 15

    Money Funk says

    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.

  13. 16

    says

    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!

  14. 17

    says

    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.

  15. 18

    Frith Shull says

    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.

  16. 19

    says

    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.

  17. 20

    says

    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.

  18. 21

    says

    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.

  19. 22

    says

    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?

  20. 23

    Kristyn says

    @ 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.

    • 24

      says

      I second this note. As a former waitress, I saw way too many fellow servers doing quite disgusting things to food, including using their hands to help move it into the container. ALWAYS ask for a container, and box it up yourself at your table. I never let my server pack it up for me.

  21. 26

    says

    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.

  22. 27

    says

    @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.

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