Receipt
Photograph ©2019 by Brian Cohen.
Brian Cohen·
Financial
··34 Comments·5 min read

25 Percent Gratuity: The New Default Tip at Restaurants?

“The service was friendly, but slow and incompetent. One wrong item and one duplicate item was served to my table. The food was nicely presented but tasted like crap. And the prices were exorbitant, but I knew that going in” is what FlyerTalk member davie355 posted in this discussion. “Unusual for a restaurant in the US, payment was done by handheld electronic card reader brought to the table. I was asked to sign and select from one of the precomputed tips: 18%, 20%, 25%, with the last option being selected by default. Oh, of course on the receipt a 4% surcharge had already been added for compliance with health insurance laws of California, whatever that means.”

25 Percent Gratuity: The New Default Tip at Restaurants?

Gunshow meal restaurant
Photograph ©2019 by Brian Cohen.

In the not-so-distant past, gratuities for waitstaff of restaurants in the United States ranged from ten percent to 15 percent before the latter became the accepted norm, which then eventually crept up to 18 percent before seeming to reach the unofficial current plateau of 20 percent for servers.

“That is ridiculous!” exclaimed FlyerTalk member Gig103. “Even 18% can be overkill, depending on where the restaurant is located and the quality of service. Some states still pay $2.13/hr minimum wage before tip credit, but others must pay full minimum wage even to tipped staff. Yet we’re still expected to tip ever increasing amounts.”

A useful link which Gig103 then provided is Minimum Wages for Tipped Employees for 2019, as a tool provided by the Department of Labor of the United States allows you to view which states:

  • Require employers to pay tipped employees full state minimum wage before tips
  • Require employers to pay tipped employees a minimum cash wage above the minimum cash wage required under the federal Fair Labor Standards Act — $2.13 per hour
  • Minimum cash wage payment is the same as that required under the federal Fair Labor Standards Act — $2.13 per hour

Not Tip at All?

Columbia Restaurant
Photograph ©2015 by Brian Cohen.

“When a restaurant charges a ‘surcharge’ for their inability to price their food in relation to the wages they pay, i do not tip and encourage everyone else not to tip”, opined FlyerTalk member crabbing. “The thing to keep in mind is that legally, restaurants are required to ensure their wait staff receive minimum wage, but the wage for servers assumes a standard 15% tip. if servers’ actual wage falls below that level (e.g., customers fail to tip), the restaurant is required to make up the difference.”

What if the server offers substantially lousy service and does not deserve to be compensated at all? Do members of society have an obligation to leave a gratuity to that person regardless of the lack of service provided?

A tip should be deserved, not expected; earned, not required — regardless of the amount. If you are a service provider, did you offer a service of value to your customer — and did you do it exceptionally well? If so, that is how you will get a tip out of a customer. If not — well — that is up to the customer to decide. Not you…

…and increasing a gratuity to 25 percent as a potential default will not always guarantee better service at a restaurant. Should restaurants increase the prices of the food to adequately cover the wages of their servers and leave tipping to be purely optional at the discretion of the patron instead of having it considered an acceptable societal obligation?

Some FlyerTalk members believe that the word tips is derived from the acronym to insure proper service. Perhaps — but politeness and respect towards the service provider goes a significantly long way towards ensuring proper service; and that can be far more effective. Most people deserve to be treated with respect and addressed politely. Respect and politeness can be far more valuable than mere money. Throwing money at someone who does not earn or deserve your respect — let alone perform the service in question properly or at all — should be considered insulting to a person with moral character.

Summary

Ben’s Best Kosher Delicatessen
Photograph ©2015 by Brian Cohen.

Similar to giving away vouchers for free but you must pay for the envelope in which they came — which was a workaround for nefarious sellers seeking to bypass the rules, restrictions, terms and conditions of frequent travel loyalty programs — is the day coming where food in the restaurant will be free of charge and the mandatory tip will be 100 percent of what the bill would have been?

See also

I understand the argument that service personnel — mainly in the United States — depend on gratuities due to low and even sub-standard compensation paid to them by their employers. They do deserve to earn a living and be compensated for their work. If those service personnel choose a job or profession which is reliant upon gratuities, then they need to perform their role as best as they possibly can — and unfortunately expect the occasional deadbeat to not leave a well-deserved tip. Others may argue that service personnel earn more than people think as a result of gratuities — but I am not about to tackle that debate here at this time.

As for a gratuity of 25 percent as a default, I am opposed to paying a full quarter of the total bill as a tip to a server unless my overall experience in the restaurant was excellent or outstanding — I hope that that does not become the new normal in terms of dining experiences in the United States — and I am interested on reading your thoughts and opinions on this issue as well.

Gratuities and tips have long been controversial with regards to travel and dining — to the point of contentiousness from all sides of the issue, as evidenced by the following articles which I wrote for The Gate over the years…

All photographs ©2015 and ©2019 by Brian Cohen.

Related

34 Comments

  1. When cities like Seattle and SF increase minimum wage to $15, then my policy will be zero tip in those locales. Sorry but you don’t get both.

    Reply

    1. Obviously you do not have a clue that you can not live in those cities at $15 an hour. And No I do not work in the restaurant industry.

      Reply

      1. How is it incumbent upon someone eating at a restaurant to bring a server’s compensation up to the local living wage rather than having their employer do so?

        Reply

        1. Supply and demand. When the employer hires, they have a large supply of workers, so they set a low wage. When the server has your table, you have only them, and you have to pay for what you want.

          The employer is paying for plate delivery.

          I pay them to help me out with things like grinding pepper, delivering hot sauce, refills, communicating with the kitchen if something is off, explaining the menu, etc.

          I take personal responsibility to ensure that serving me is worthwhile.

          You don’t have to like it. You don’t have to agree. But you’re in this system so you do have a responsibility to deal honestly with your fellow humans and not play dumb about the fact that they are working for a fee.

          If you don’t plan to tip on top of the minimum, you should at least tell them you don’t tip.

          Don’t free ride on the good habits of other to get your $50/hour service and then walk out having paid $15.

          And if you want to go to a no-tip restaurant, Google one. Spoiler: You’re not going to come out ahead financially, though I respect your culinary dedication to the principle of a living wage.

          I don’t like tipping either but seeing how the same people who oppose the minimum wage rises are usually those who oppose tipping, I really doubt it’s about fairness. I think they’re just cheap as hell.

          Reply

          1. A “reputability” What the hell? This makes me not WANT TO TIP if I go out! Such entitlement! I’ll tip if I want to (I do), but if the services suck… screw that. No tip.

            Reply

  2. Time Magazine has a great article on this subject. If you search, ‘It’s the Legacy of Slavery’: Here’s the Troubling History Behind Tipping Practices in the U.S.

    I hate our tipping culture and our employers inability to pay a living wage.

    Reply

  3. Adam ruins everything did a good episode of why tipping should be banned. It’s really only a custom we do in the USA most overseas locations tipping is not in the culture and when we as Americans travel to other countries and tip outside if the culture it pisses of locals as they start to see a decline in service toward locals that do not tip.

    https://youtu.be/q_vivC7c_1k

    Reply

  4. If you don’t want to tip, don’t go out in the US. Period. By sitting in a restaurant, accepting service, you are accepting the protocol of paying for that service directly to the server in the form of a tip.
    As for the $15/hour minimum, it doesn’t apply to tipped jobs.
    No one forces another to eat out. Cook in, go to friends’ houses, pick up a pizza. But if you do go out, don’t be a dick.

    Reply

    3. OK, so let’s assume your ‘command’ of “if you go out you must tip” is correct.

      What is the correct percentage ? should it always be a percentage ? what about a the work and effort involved in delivering a Waffle House burger compared to a Capital Grille burger ? Does the amount/percentage take in to account what the server is paid ? and of so, should that amount be public knowledge so the diner can adjust the tip appropriately ? Surely the restaurant is responsible for providing a suitable wage based on their expectations of the server and costs of living in the area ? and the tip is just for going the extra step ? or are diners effectively non-renumerated executives responsible for subsidizing employee costs ?

      Reply

    4. Oh please. It’s not mandatory to tip. Besides, how will business continue if you have people a bunch of people not wanting to go to restaurants they don’t want to tip? You see how stupid you sound?

      Reply

  5. The percentage of tip should be calculated on the quality of service you receive. I have tipped more than 25% on excellent service (highest I’ve tipped is 50%). I will only tip 10% for mediocre service. On average service 12% to 15%. Above average service 18% to 20%. On really bad service I do not tip and tell the manager upon leaving why I did not leave a tip.

    One of my friend’s father lays fives and one dollar bills out on the table when he sits down. He tells the waiter this is your potential tip based upon the service we receive. He then remove bills during the service if he is not satisfied. He usually gets very good service.

    Reply

    1. My adult son used to point to his water glass and tell the server, “The lower the water gets the lower my tip becomes. Pay attention to my needs during dinner and I’ll tip you accordingly.” A few years later he worked as a server and his mother and I sat at one of his tables on the first night he was fully on his own. I’m sure that he ignored us in favor of other patrons because he knew that we wouldn’t really mind. At the end of the meal, I pointed to my empty water glass and reminded him of his previous comments to servers. He replied, “Whoever said that was an idiot and doesn’t understand what it takes to manage five tables!” Perspective changes everything!

      Reply

  6. I tip generously if i can expense it.

    I tip 15% reluctantly when i am paying for it. I envy people that can effortlessly be generous when it comes to tipping. I have stopped eating out our only go to self serve places. Tipping culture is out of hand.

    Reply

  7. 25% as a standard tip? No way, no how. And if I see the 4% “health insurance surcharge” on the bill, I will subtract it from my otherwise typical tip of 15% to 20%.

    Reply

  8. @James The story about your friend’s father is exactly why tipping should be abolished. Will the guy also shit on the floor and demand the waiter to clean it? Because he sure does sound like an animal.

    Reply

  9. Over in Eastern Europe (Hungary for instance) you actually tip the doctor, nurses, and hospital workers. The reason being the same as you tip waitstaff in the USA – they receive such low wages that they need tips to survive.

    In Italy you tip a government official to get your building permits approved earlier.

    Nearly every culture has “tipping” in some aspect.

    Except Japan.

    Reply

    1. I remember I traveled to Italy with an Italian friend we went to eat I was leaving a tip and he genuinely was pissed removed my tip from the table and said don’t do that here you will destroy our culture by doing so. When I was in Egypt I encountered many police they would run up to me act like they were helping me cross the street and demand a tip.

      Reply

  10. After travel abroad, I really resent being asked to pay part of the servers salary because of this evil, broken, exploitative system in the US. In Lation America , tipping is normally a reasonable 10%, (mostly voluntary) while in Europe, servers are paid a normal salary and tipping is neither expected nor encouraged.

    Reply

  11. I was forced to tip in fez in morocco in a tourist trap souk. I fought with the server, didn’t pay the tip, complained about the cut of the meat i was served then eventually paid the tip almost but not quite the original amount.

    You could say it was unnecessary drama but we need to put the foot down that it is not an entitlement. Next time tell them why you are tipping what you are tipping.

    Reply

  12. I put myself through undergrad school by working as a waiter & bartender for 4 years in the early 90’s. Back then the norm was 15%, but I averaged 18% because I always worked hard to provide the best service. I did work for 2 months in a restaurant were the kitchen notoriously took too long to prepare the food and my tips showed it: 10% overall. I quickly found a better place to work.

    Like it or not, tipping is the norm, the standard, the expectation and a requirement for waitstaff to live. Today I tip 15% for fair service and 20% for good service, more if the service and food were both excellent. I tend to tip more on smaller bills, occasionally over 100% .

    I’m with ‘Once a Server’, if you are not willing to tip at least 15%, you should not go out…

    Reply

  13. My company has a policy that the maximum tip can’t exceed 20% of the bill. I usually tip 15 to 20% but hate fast food places that have a suggested tip at the pay terminal even for carry out. It has gotten as out of control at the 4% fee they added to his bill.

    Reply

  14. Also… Why must we tip on the price of the meal and not the time and the efforts put in to making our dining experience great? If im in the same resturant and I order seafood platter and 2 drinks bill is $120 or if I order a sandwich and glass or water with a $25 bill. If the server drops my food and never checks on me once and I spent same 30 min in the resturant why would the server deserve more for doing the same work jist because I ordered something more expensive? It does not make sense tip should be 100% on time and level of service not the price of the food. Did the server check to ensure our food was great? Did the server continue to refill our glasses? Was I struggling to find the server when I needed something? This is what the tip % should be no the price of the food & drinks.
    What about drinks at the restaurant which can become very expensive fast!! How much do you tip for resturant drinks compared if your sitting at a bar? Do bartenders also receive 20%?

    Reply

  15. The bill at lunch yesterday (2 people) included a KAT amount. The amount was already predetermined and added into the bill. When I asked the waitress about it I was informed it was a Kitchen Appreciation Tip. Has anyone else encountered this? Thoughts? I

    Reply

  16. The 25% mentioned in your story is only a “default” amount. If you find that too high, simply select a lower amount or insert a custom tip, in any amount you choose. A high default amount adversely affects mostly the inattentive.

    Reply

  17. First, at this point I find a 25% tip to be somewhat outrageous. Secondly, a pet peeve of mine, is the pre-computed tip percentage/amount on many of the charge receipts. The percentage is generated by computing the total amount of the bill……..not a percentage of the bills food charges. Never tip on tax!

    Reply

  18. I tip ZERO so go ahead default to 25% won’t bother me any. Yes the waitstaff and kitchens will mess with your food if you are repeat non-tipper patron but if you are on business trip or vacation you’re not going back soon. Can’t get your food spat in.

    Reply

  19. We can thank those that want a $15.00 or higher minimum wage. The restaurants are passing this on to the customers instead of closing their doors or laying folks off that would creat terrible customer service.

    Reply

  20. You neglected to note that when the restaurant ‘calculates’ the tips they usually do it including the tax now which has nothing to do with the food purchased and simply pads the tip.

    Reply

    1. I plan on writing about that in the near future, Jim Richter, as I believe that warrants its own separate article.

      Reply

  21. What about any “rules” about tipping with cash or card? I know servers prefer cash but us points collecters want points on our cards. I heard many # of times if your tipping with a card you should add an extra 5%.

    Reply

    1. I have not heard of the rule of adding an extra five percent when using a credit card, Mike; but I will certainly keep that question in mind.

      Reply
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