Is Your Excessive Tipping Causing Poor Service For Others At Restaurants?

by Hank Coleman

Does Excessive Tipping Causing Poor Service?My friend Greg and I were eating at a restaurant the other day when he started complaining about the amount I tipped our server. He thought that it was excessive tipping and accused me of ruining service for the rest of us who would later come into contact with that server. He said it reinforced bad service.

I wasn’t always excessively tipping servers at restaurants. It was quite the opposite in fact. My wife has changed the way that I tip servers at restaurants.

I’ll say right up front that I’ve never worked in the food service industry. I don’t know anything about it other than being a customer. When I met my wife, I gave a standard 15% tip for average to great service, but I was also ruthless when there was bad service. The server got 10% if they were lucky.

It is absolutely true when they say that opposites attract. That is my wife and I to a “T” in most respects. She’s the ying to my yang. She is a very kind and generous woman. And, like most husbands’ wives, she brings out the best in me. My wife has always been big believer in a 20% standard tip.

After four years of dating and now over 11 years of marriage, she has changed me for the better with my poor tipping habits. About three or four years ago, I started giving a standard 20% tip for even average service. Last week, I took some significant heat from my friend Greg for the practice. He said that 20% was excessive tipping for appropriate, average service and that I was

Are We Reinforcing Bad Behavior With Poor, Excessive Tipping?

My buddy Greg thinks that my excessive tipping contributes to the poor service that he gets at restaurants. Let me explain.

Let’s say, for example, that I have poor service one day at a restaurant, but I still give the waiter a 20% tip on my meal. In his or her mind, he must have done a great job. But the truth of the matter was that it was just okay service and maybe even borderline below average.

Now, my buddy Greg goes to the same restaurant the next day and will most likely get the same service because I’ve been positively reinforcing the bad behavior with the waiter with excellent tips. It’s a case like Pavlov’s dogs, and I’ve conditioned the waiter to give unacceptable service because of my tipping habits.

Where Do You Go After Excessive Tipping For Great Service?

If I’ve skewed the scale and now a 20% tip is my “go to” standard for both good and great service, where do you go from here? Is this tip inflation? How much should I now give for excellent service?

How can I now show a server who went above and beyond the call of duty in waiting on me and my two very messy boys that I appreciate his effort? Should I now give a 25% or 30% tip? Where’s the limit from here?

I told Greg when we were having a friendly debate on the subject last week that I would simply pull the manager aside and tell him what a great job our server did. Here’s where Greg pointed out that I have obviously never worked in food service or any service industry for that matter. A compliment and accolades to the manager will most likely not translate into a higher paycheck at the end of the night. And, we all know that cash is king. In the end, we all love warm and fuzzy feelings, but that doesn’t pay the bills.

So, if 20% if the new 15%, where do we go from there for incredible service?

How Much Should You Tip Your Server?

Do you practice excessive tipping?Now before you all rush to remind me that the minimum wage for servers, bartenders, and the like is far lower than a standard retail worker, I understand that. I guess that is part of the rationale behind my wife and I giving a 20% standard tip.

But, wasn’t that taken into account when 15% became the standard? Did you know that the minimum wage law also states that servers in restaurants have to be paid the standard minimum wage by their employers like other workers if their tips do not bring them up to that level?

The Fair Labor Standards Act (FLSA) requires employers of tipped employees who only receive the minimum wage of $2.13 an hour after tips in direct wages to increase their direct pay in an amount that equals at least the federal minimum wage. The employer must make up the difference if a tipped employee’s tips and the $2.13 base do not equal the federal minimum wage of $7.25 per hour.

Is 20% simply easier to calculate? You simply move the decimal over one place to the left and double it for 20%. My mother is a retired high school math teacher, and she taught me to calculate 15% the same way, move the decimal and then divide by two. It’s definitely a little trickier but still doable.

Or, many of the kind restaurants and bars are adding it to the bottom of your bill as a quick reference like the picture to the right. It is funny how they never add a line for a 10% tip for poor service though!

How Much Do You Tip Your Server?

So, how much do you give for the standard tip for decent, average service at a restaurant? 10%, 15%, 20%, or more? Am I crazy? Am I ruining service at restaurants for the rest of us? Is 20% the new 15%? I honestly can’t wait to hear your thoughts on this in the comment section below.

Share the Love
Get Free Updates

About Hank Coleman

Hank Coleman is the founder of Money Q&A, an Iraq combat veteran, a Dr. Pepper addict, and a self-proclaimed investing junkie. He has written extensively for many nationally known financial websites and publications. Hank holds a Master’s Degree in Finance and is currently pursuing his Certified Financial Planner credentials. Email him directly at Hank[at]MoneyQandA.com.


Hank Coleman has written 524 articles on Money Q&A. Learn more about Money Q&A on Twitter @MoneyQandA and @HankColeman.


Subscribe To Money Q&A

If you want to learn more about taking back control of your money please subscribe to Money Q&A’s RSS feed or via email to receive all the latest articles! You can also subscribe to our Free Weekly Newsletter.

{ 12 comments… read them below or add one }

Levi Blackman

I tip 15% normally, and 20% for excellent service. If I get to know the person because I use the service too much I may go a little higher depending on how friendly we are.
Levi Blackman recently posted..The Million Dollar Blog PostMy Profile

Reply

Hank Coleman

Levi,

Now that’s an interesting problem that I hadn’t considered before. I think that I would almost feel obligated to tip more if I knew the server or if I have gotten to know them after being a regular for a long while. Interesting point!
Hank Coleman recently posted..Interview With Gary Vaynerchuk for Your Money Your Choices PodcastMy Profile

Reply

Aktar

Hey Hank, great topic dude… mostly I get confused regarding tipping. Whenever we go out for having some good food, we have to pay excess amount for services and tipping. This article gave a nice idea about giving tips.
Aktar recently posted..Tips and Tricks to Improve Your FinancesMy Profile

Reply

Travis @debtchronicles

Tipping has become confusing because employers have essentially made it THE way that servers are paid. You know what I think? That’s not my problem. A tip is an “over and above” amount left for a job well done. To me, the amount is 100% up to the consumer. I’m going to say that again: 100% up to the consumer. If the service sucks, they deserve exactly ZERO for a tip. If it’s standard mediocre server, they get 10%. If it’s above average 15 – 20%. If it’s fantastic, they get 25%. For me it’s a bell curve….the ZERO tip bucket is used very infrequently. In fact, I think I’ve done this only once or twice ever. The 10% bucket I would estimate is used about 1/4th the time. The 15-20% half the time, and the 25% the other 1/4th of the time. That’s just me…because a tip is 100% up to the consumer. If they want to make sure the customer leaves enough money at the table to pay the sever well…then raise your prices and build the cost of employment into your product like every other retailer (duh!). Ok, now that I have that rant out of the way…to answer your question. No, I don’t think you’re ruining it for others and I say that for two reasons: If 90% of the people that walk through the door tip a server less, that server will get the message as to where the majority of the people rate the service. PLUS, you don’t tip until after the meal is over, so unless you’re a repeat customer that gets the same server over and over, that server has no possible way of letting your tip amount affect the service.
Travis @debtchronicles recently posted..We Doubled Our Net Worth and You Can Too!My Profile

Reply

Hank Coleman

Some interesting thoughts, Travis. Thanks for adding them to the discussion. It’s kind of an aggregate thing. While you may not get the same server next time, over tipping reinforces bad behavior and the NEXT customer will be the victim of a server who thinks they are better than they really are. But, I like your point about the bell curve and the law of large numbers working it out. As long as there are 9 out of 10 people tipping based on the actual service and how good it was, I can go on giving 20% to my heart’s content and not really affect anyone else.
Hank Coleman recently posted..Interview With Gary Vaynerchuk for Your Money Your Choices PodcastMy Profile

Reply

Blake

I just wanted to pop in and add my two cents.

I worked in the food service industry in college and I have a lot of friends that still work in the industry. I have seen a lot of bad servers through the years and I have no qualms about stiffing someone if they were awful. If they aren’t going to take the job seriously, or if they aren’t going to treat a customer with respect, then they deserve it.

However, typically the bad servers don’t get stiffed any more than any other employee. What’s truly unfortunate is that in most situations where a table is getting bad service it is not the fault of the server. There are a thousand possible reasons. Maybe the kitchen is slow, or all the cooks just walked out for a smoke break in the middle of a rush (I have seen this an astounding number of times). Maybe three 10+ person parties just walked in the door and all the wait staff is called up to help. Maybe they are short staffed. Ect ect. It doesn’t matter what makes the customer angry, the anger will always wind up in the same place. At the bottom of the receipt.

What really frustrates me about this is that the small tip doesn’t “send a message” to the right people. The management, the kitchen, the bussers, the bar, the hosts and all other employees are paid hourly wages. They really aren’t affected by the tip or lack thereof. These employees can take a break, or slip off and call someone or what-have-you and it doesn’t change their paycheck one cent. But it always directly influences the money that a server brings in.

Tipping has become the main source of a server’s income because management thinks that it is a good motivator. “These people are the face of the restaurant, they interact with the customer. We need to make sure they work hard to please the customer. Therefore, we need a system that rewards customer service.” This looks great on paper. But, as a server, it is less than rosy. Your paycheck suddenly stops being a reflection on your own work ethic and drive, and depends on the entire restaurant staff as well. Most bad servers wind up that way because they have been there long enough to know that they can absolutely bust A out there all night every night and get paid the exact same amount as the lazy guy. That’s why there is such a high turnover rate among wait-staff. This job is rough.

And none of this is the responsibility of the customer. The customer shouldn’t have to watch the whole restaurant and say “Oh, look. Our poor server is getting swamped over there. I guess it’s OK that we have been sitting here waiting on drink refills for 15 minutes now.” No, the customer should be the #1 priority for the whole restaurant at all times. The customer is the reason that these people have jobs and can support themselves and should be treated accordingly. But not many people in a restaurant think about it that way. To the hourly wage people, it’s just a job. Punch in, do your time, punch out.

I’ll get off my soap box now. Sorry for the rant.

Reply

Mal

All very good points.

In tegards to the original post, I have a problem with the phrase “reinforcing bad behavior.” Serverd are not dogs to be trained. Also, even the best server has bad days. Just something to keep ib mind.

Reply

dojo

The tips in Europe are not as high. In my country we usually give 10% for good service. Yes, we did pay the bill EXACTLY to the last cent if the service was crap. We don’t really care about the slowness of the food coming out (we realize the server is not the actual cook), but we do not reward bad service from the person who’s in contact with us.
dojo recently posted..Personal finance book: The Millionaire Next DoorMy Profile

Reply

Jenni

I’ve worked in food service for going on 8 years now. I’ve waitressed, been a barista and currently am a bartender. I always always always tip 20% as a server I know when I’ve done a good or bad job with my customers and sometimes I am completely swamped and can’t get to every table to check up 4 times, or make sure my attention is always on one table. I have always tipped 20%. knowing that servers receive less pay, and despite what the law says I have never seen the extra money due to me when I’ve had poor tips, I know that 20% is deserved. As long as I get my food, have the server at least check up once and be polite I tip well. However, when I receive very poor service I take it up directly with the manager, explaining that I usually tip 20% but found my server to be rude or incompetent. That seems to be the best direction, since every time I have tried this the next time I went to the restaurant I received execptional service.

Reply

Jon@2-copper-coins.com

We start out with a standard tip of 20% (my wife worked at a fine dining restaurant for 2 years) but if someone isn’t up to snuff we go down from there. People shouldn’t get paid for bad work, the key isn’t where you start the scale it is actually changing your tip based on performance. I will say though if someone starts their standard tip out at 10% and goes down from there that is just being plain cheap.
Jon@2-copper-coins.com recently posted..Emergency Fund Dos & Don’tsMy Profile

Reply

Jack @ Enwealthen

20% tip for a waiter?

No.

15% is for good service, and no hesitation whatsoever to give a poor or no tip for poor or no service. I only tip above that if the service was well above the norm, or for a very upscale restaurant (often correlated, but unfortunately not always).

I earned my money from hard work. If they want my money, they have to work hard too.
Jack @ Enwealthen recently posted..Want to Save $100,000 on Your Mortgage? Improve your Credit ScoreMy Profile

Reply

G man

20%???????? Wow!

Actually, what I was always taught (and what I think has been the tradition from at least before the 1970′s) is that between 10 to 15% is for normal service (whatever is most convenient to calculate so you don’t nickel and dime the server, or 11/12% on interac machines), and an exact 15% is for great service. Additionally, no tip is necessary at buffets, or if your server is the manager of the restaurant. Also, be sure to (when possible) give your tip directly to your waiter/waitress to avoid the manager skimming money off (or even stealing the tip) — this can and does happen at some restaurants (even though it shouldn’t).

For mediocre no-service a 0% tip will suffice, and for awful service, you complain to the manager (and if the manager does nothing, you walk out and never come back).

Personally, I see tipping as a way for the employer to raise his or her prices, by cutting the wages of the employees and having the customer make up the difference. In many other countries there is no tipping culture whatsoever. Instead, the manager pays the servers a proper wage. In countries without tipping, the service is (from my experience) many magnitudes better than the average service in North America. I think tipping should be virtually abolished in favour of proper wages (not just the minimum) and even benefits (such as dental, etc.) for all waiters and waitresses; however, I don’t think that will realistically happen anytime soon (especially the benefits).

Reply

Leave a Comment


CommentLuv badge

{ 7 trackbacks }

Previous post:

Next post: