It’s Not Tipping. It’s Commission.

One of many things that divides the Britons and the Americans is our attitudes about tipping.  I call it The Great Tipping Debate.  Since the minimum wage is higher in the U.K., my dear Britons, when you do tip, it is based on merit, while we tip to make up for salary and to reward for merit.  Now, I have heard a lot of criticism about the way we do things over here, and I am hoping I can clear up your misunderstandings about the way our tipping system works.

OK, and this goes to the Americans too, we have a proliferation of servers who have jars out in every coffee shop and fastish food restaurant.  Just because there is a jar by the cash register does not mean that it is a personal affront to you or anybody else.  Put some change in.  Don’t put some change in.  No one is watching and waiting to chastise you because you put your spare quarters in your pocket.  It’s America.  Put your vitriol into something that actually matters…like how we each pronounce schedule.

Now that we cleared that up, to the ladies and gentlemen in the U.K., a lot of you hate tipping, or tipping at the levels we do, in restaurants and bars, especially when our system runs completely contrary to the way you pay your waitstaff.  You bring up very valid concerns in the process of objecting, which I need address.

My waiter is already getting a 25% tip just for breathing.  Photo by Alan Levine.  https://www.flickr.com/photos/cogdog/13235521305/
My waiter or waitress is already getting a 25% tip just for breathing. Photo by Alan Levine. https://www.flickr.com/photos/cogdog/13235521305/

“Why should I have to pay extra on top what I am already being charged?  Tipping should not be an obligation.”

I know you live in a society where you are penced and pounded to death.  Every bit of savings helps.  Let’s look at the figures a little more closely.  My resident numbers cruncher, the Boffin, compared two cities, Pittsburgh and Bristol, with similar costs of living to see if you are really paying extra based upon tipping the minimum 15% over here. And 15% is the bare bones, bottom line, the person grunts at you tip you should give.  In many restaurants, tips are distributed to the bussing staff and the food runners before the servers get any money, and that percentage is often 10% of the bill.  So, if you want your server to get any money, 15% barely covers it.   20% is a nicer figure.  Anyway, here are his results based upon 15%.

In the UK:
Average cost of meal for 2: £40.00 ($61.54)

In the US
Average cost of meal for 2: $39.00 (£25.35)
Tip = $6.00 (£3.90)
Average cost of meal for 2: $45.00 (£29.25)

Conclusion: You are not paying extra by any means in comparison.

“It’s completely ridiculous that you can’t give your waitstaff a proper living wage, so the onus isn’t on us to make up their salaries.”

Actually, the onus is on the clients to pay the salaries of the waitstaff, since that is how economies work.  When you go to a restaurant, unless you believe in slavery, you should expect the salaries of all the employees to be somewhere in the money you pay at the end of the meal.  Further, by fixing the salaries, it is very difficult to reward a member of waitstaff who excels, and the restaurant owner sees pay rises for staff as coming directly out of their profits.  The difficulty is in transitioning from the UK to the US is how the system in the latter is set up to drive quality of service and efficiencies.

It’s true that people in the restaurant industries are vulnerable when the economy is weak. If people are not eating out, we don’t have as big of a safety net to help them. However, the American benefits system is a separate post entirely. And your waitstaff would be unemployed in a weak economy too, so that argument is neither here nor there.

I think the huge problem is that the Americans are using the wrong word to describe how waitstaff are earning their money. What we are giving them is not tips. It’s commission. They are performing a sales job. You are not just buying a meal when you go into a restaurant. You are also buying the experience of being cared for properly during that timeframe. That is what the waitstaff is selling.

Haggling, to a point, is allowed too.

“May I substitute a salad for the fries?” “Sure”

“May we have an extra basket of bread? “Coming right up.”  (The vast majority of the time it is free.)

“Free refills on your soda and extra ice? Absolutely, sir!”

“This meal is awfully big.  Do you mind if we just order one and share?”  “That’s fine.  We will have to charge $2.00 for an extra plate.”  “Oh.  That’s OK.”

How often does these exchanges happen in a British restaurant?

How well they do the sales job affects how much commission they get.  When talking about my idea for this post, I even revved up the Boffin.  He did even more number crunching, and here is what he had to say.

“In the UK, the minimum wage for a people working in a restaurant, assuming that there is no service charge, is £5.30-£6.70/hr ($8.15-$10.30/hr).  Tipping is frequently rare, and if it does exist, it usually goes into a centralized pool.  A hard working member of the waitstaff, working 3 nights/week who works his or her arse off might be end up earning (including tips) £9,500 a year ($14,500).  The Government then helps you out on the order of £3,000 a year in benefits ($4,600/yr) to bring you to a total of £12,500/yr ($19,000/yr).  This is higher than the not-working-but-looking benefit recipient at £9,000/yr ($14,000/yr).  Unfortunately, their hard work is not rewarded because the worst waitstaff are being paid basically the same.  In the US, there is a much lower minimum salary at around $2.13 (£1.50/hr ) for waitstaff and $7.25/hr (£4.70/hr) for most others. So, while a part-time worker might be looking at only $3,000-$9,000/yr (£2,000-£6,000/yr) in base salary, tips have a substantial positive effect. In most cities, a hard working member of the waitstaff could be looking at an annual income of $49,000/yr (£32,000/yr). If the tips are spread across the restaurant, then even bussers and food runners could see their income rise to over $20,000/yr (£13,000/yr) higher, if they work a second shift each day at another restaurant. This increase is not because the owner decided to give you a paltry 3% rise this year, but because you met or exceeded the needs of the customer, and they rewarded you directly. However, there is no job security, and the staff needs to be constantly improving their efficiency and customer service skills.   The restaurant owners see the best waitstaff reduce their costs, as they no longer need as many people serving tables.  Therefore, they dump the lazy ones and go out looking for the next hard working waitstaff.  The hard workers see the rewards through a higher income and the restaurant owner sees lower costs, which they pass part of onto the customers. Everyone one wins.”

Let me follow up by saying the Boffin is not exaggerating.  This kind of life is no cake walk, but I got my bachelor’s later in life and went to school with a couple of women juggled college, kids, and waitressing at the same time.  Getting a job at a steakhouse meant being able to pay for health insurance through the university.  They also found childcare through college too.  The bottom line about the United States is that people are left out in the elements over here, but there is a lot more opportunity to find ways to make the money to cushion the blows.

“But the customer service is so phony. People aren’t genuinely nice to you. They are degrading themselves and just want your money.

Well, you are going into a restaurant. They are employed in the restaurant where you are about to eat. They want to stay employed. I think it is a natural conclusion that they want your money, and you are going to give it to them. Why should the transaction be a miserable experience?

So all those comments I hear from Britons about American customer service being a phony kind of nice and it all being a huge ploy to get money out of us are true…to a point.  There are places where you go inside and just plain feel icky because of how contrived everything feels.  However, you don’t have to give them your business.  Turn around and leave.  We have choice here and can use it.

There is another side of that customer service coin. The cynical attitude totally discounts the people who actually enjoy their jobs and eating out. Talk to the waitress who has worked 30 years at an American diner.  Find the mom and pop joint who has been selling their classic lasagna dish to happy locals since before you were born.  And there are people like us who have had some of our most interesting conversations with waitstaff over the years.  One of our best local discoveries was finding a creperie in the Chicago burbs run by a French gentleman who had regional familiarity where I did temporary duty in the Air Force.

Yes, he was selling us food, and I could have attributed it to it all being a sell job, but the conversation made it so much nicer.  Let the man run his business in a pleasant way.  Not all service jobs are shit jobs.  In fact, they wouldn’t be shit jobs, if all the customers were actually courteous.  Let’s face it.  We have our share of Americans who should not eat and drink in public.  However, we have plenty of people who work in the restaurant industry who enjoy what they do, and it shows.

The bottom line is that we, as Americans, decided this is how the system works. That does not mean it is perfect. Far from it. In fact, we have restaurants that are trying other models like Employee Stock Ownership Programs (ESOP) that may help insulate their employees from sagging economies.  In the meantime, when in Rome, do as the Romans do.  (Open up your pockets more, you 10% American Caesars!)  And some of the Anglo-Saxons should judge less and attempt to understand more.

17 thoughts on “It’s Not Tipping. It’s Commission.

    1. Thank you so much. This one was a bit of work because of the fact checking and all the numbers involved.

      Yes, it is a funny language. The Boffin wrote that paragraph, so that is why “get a rise” is in there. If you look back, there are quotation marks around the paragraph.

      Liked by 1 person

  1. When I waited tables–and I think it’s still true today–wait staff were paid much less than minimum wage on the theory that they’d get tips. That’s a lousy system, but you don’t change it by refusing to tip. In addition to that, wait staff (and cab drivers, and everyone else who works for tips) have to pay taxes on the tips the IRS thinks they receive–not on what they actually get. So if you don’t tip, someone’s paying taxes on the amount of money you didn’t leave on the table. In other words, they’re actually out of pocket for having served you. So get out that wallet and cough up some cash. If you can afford to eat out, you can afford to tip.

    Liked by 2 people

    1. It is crazy because you still get paid less than minimum wage. However, as far as the IRS is concerned, we looked up the tax rate for tips. It is 8% for aggregate tips reported, so it does account for the cheapskates who stiff you when you add all your tips together.

      I have known a couple of Britons who have not tipped or tipped less in the U.S. because they wanted to stick to their principles. What kind of protest was this? All they were doing was picking on a little fish and keeping their cash.

      It doesn’t take away the insult when you do put in the hard work and get nothing for it. So, yes, if you can afford to eat out, you can afford to tip, excuse me, pay the commission.

      Liked by 1 person

  2. I agree that our system encourages hard-working wait staff through the well-termed-by-you commission system, Karen. Not having ever been to the U.K., though, I also wonder that if there’s a tough economy and a scarcity of jobs, wouldn’t the wait staffs there have a similar incentive to work hard and please customers to keep their employer happy and keep their job?

    Thanks for the interesting post on here-and-there.

    Liked by 1 person

    1. That’s a hard question to answer, Mark, because there is the whole class issue. You see, there are remnants of the resentment of the working classes having to serve the upper classes. Service jobs are really not considered good jobs because of that because of that impression of being demeaned. Between that and having a bigger safety net if things go pear-shaped, there really is less of an incentive to keep their employer happy. The U.K. is not known for good customer service. That does not mean you can’t get good customer service in individual places, but across the board, in comparison to the United States, it does not come close.

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        1. I hate to show you this, Mark, but…

          Enterprise Rent-a-Car in the U.K. currently have a series of adverts featuring Dave and Brad. Brad is the American, and he is the American customer service rep who is going out of his way to please the customer, but he is a big fat idiot. Dave is the Briton who is keeping him in line. Welcome to how the country sees us.

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