The Tipping Point

I would first like to make it known that the use of this title is in no way meant to capitalize on the success of the book of the same name written by Malcolm Gladwell. I would recommend if you haven’t yet read Mr. Gladwell’s book, The Tipping Point, you should. It is probably one of the most influential books of the last decade.

This article was inspired in part because of my observations over the years of the lack of appreciation people seem to have on tipping in restaurants. There have been many articles written on the etiquette of tipping and the percentages recommended for various services provided. I have not yet come across any articles that explain how tipping works in the restaurant industry.

My expertise in this field comes from a couple of sources. As a business consultant I spend a great deal of time on the road in hotels. I am a member of a hotel rewards program and receive my annual letter from them expressing their gratitude for choosing their hotel group. Apparently I’m in the top 1% of all their members. I also have a couple of friends that own local restaurants. I’m a single guy so most of my time is spent in restaurants when I am in town and I have become friends with a number of the staff in these establishments.

I believe most patrons of restaurants are not aware of the concept called “Tip Outs”. The service you receive is a culmination of work by a number of individuals. It may be as simple as kitchen staff and wait staff, but may include bar tender/s, managers, and maître d’. When you leave a tip a portion of that tip is allocated to others in this chain of service providers. In some restaurants it may be more rigid and structured than in others but there is usually some breakdown of the tip you leave. This may be as little as .5% of a bartenders invoiced bills paid to the kitchen or 1% of the wait staff invoiced bills to the kitchen. In some cases the total amount of “Tip Outs” can be as much as 5% of the invoiced bill divided among the various other staff. Many people also may not be aware that restaurants are allowed to pay wait staff less than minimum wage. The standard in Ontario is about $8.25/hr.

I guess you could say I reached my “Tipping Point” the other day. I was in one of my local establishments and one of the wait staff had a table check that totaled $120. The patron left a tip of $7! That’s 5.8% of the bill. The total “Tip Out” in this particular restaurant is around 5%. This table seemed to be enjoying the service and was having fun with the staff. There was no complaint about the food. There seemed to be no tangible reason for this meager tip.

Now there are a variety of situations that need to be addressed related to how the tip is determined by the patron. If you have bad service then reducing the tip accordingly is justified but don’t forget the rest of the team should be compensated. It would also be important to let the house know what the issue is to allow them to deal with it. If the food quality or preparation is not to your satisfaction it’s important to let someone know but remember to properly compensate the wait staff. If the service and food are not as expected then a lack of compensation might be a consideration but again, it is very important to let the house know to enable them the opportunity to deal with the issue.
One last issue is food or drink that is “comped” (complementary) by the house. It seems that most people feel that if the item was provided but not charged for due to a complaint or just a grateful owner, the tip should only be on the invoiced amount…WRONG!!! The service was provided by the staff. Why should you not tip them for their service? They didn’t do any less work. You received the benefit. Show your appreciation for the service. They delivered whatever it was that YOU got for free. This is also true for gift certificates. Just because it covered part or even all of the check does not mean a tip for the entire amount can be ignored.

Don’t forget the “Point” of “Tipping” is to show your appreciation for service provided by people that are doing their job to look after you for an hourly rate of less than minimum wage. In some cases your lack of tip can actually cost the server money from their own pocket since the “tip outs” must be paid regardless of what you leave behind. If you don’t care for the service or food at a particular restaurant then speak with your feet…don’t go there.