Summary
Tipping in America has expanded into unexpected areas, with 72% of Americans saying it is expected in more places than five years ago, according to Pew Research.
While tipping can release feel-good neurotransmitters, a Bankrate survey found two-thirds of Americans now view it negatively, and one-third feel it’s “out of control.”
Critics highlight issues like social pressure and wage inequality, while businesses attempting no-tipping models, like a New York wine bar, have struggled to sustain them.
Many believe tipping culture has become excessive, with calls for reform growing.
If your business can’t survive without my tips, you don’t have a viable business.
I don’t tip businesses, I tip people. Some of those people own the business.
If you underpay people to rely on tips, you’re just playing the game on a harder level.
I generally agree with you, but what is your response to businesses like those mentioned in the article that tried a no-tip model and could not sustain it?
I think that tipping models are starting to emulate app microtransaction models - they know that a majority of people are not going to tip, or will round their total up to the nearest dollar or something. It’s the person that sees the option to tip and decides to throw an extra $20 just because that they’re after. If they instead raise the prices to make it average out, the majority of people that normally would not be tipping go somewhere that’s cheaper (because they do tips), and the few people that would pay extra no longer have the option to.
To tie back to the microtransaction analogy - the games that bring in money are the free ones where you can pay to get stuff. Most people pay very little or nothing, but a small percentage throws tons of cash into the game. If you were to take the amount of money brought in by these whales over the life of a game, divide it among all people that played it, and charged that much for the game, it wouldn’t profit nearly as much, because none of those people want to pay the $5, and the people that were spending hundreds can only buy the game once, if that.
what is your response to businesses like those mentioned in the article that tried a no-tip model and could not sustain it?
That they don’t have a viable business.
Probably because of all the other businesses competing by not paying their employees a fair salary
I mean, yeah. Obviously. But to the other businesses or potential business owners that want to try a tipless model, that see these businesses failing, that’s not very encouraging or helping to figure out what the underlying issue is. If people are trying to do a good thing but can’t quite figure out how to make it work, should we just say, “guess you’re not very good at this” and continue giving business to the places asking for tips, or should we try to look into what’s going on?
What you do is you legally mandate a minimum wage, require businesses to respect that or else get shut down by the labor board, and then if you still can’t make a profit then yeah, sucks. Should have planned better.
The underlying issue is that companies are allowed and encouraged to pay well below the minimum wage because tips make up the difference. This was a stupid idea from the very beginning, and was born shortly after the Civil War when the FLSA ruled that companies could do this so that they didn’t have to pay newly-freed slaves a fair wage. Remove that and you remove the problem. American tip/gratuity law spits directly in the face of our own fair labor standards.
The problem you’re describing comes from trying to do this piecemeal and let the free market push the demand, but the free market isn’t going to do that when cheaper options are available. Even if those cheaper options are built on exploitation. So trying to eliminate tips in your restaurant when the restaurant next door is still on tipped wages is asking for disaster. But if everyone were forced to change at the same time due to change in legislation then you don’t have this problem.
The price of eating out at restaurants will increase, but of course it will, you aren’t going to dodge that no matter how we address this problem.
Thank you for giving a thought out response to my question. I wholeheartedly agree that tip culture, as it is, is garbage.
I think being able to tip is very appropriate in certain scenarios, like at a bar where the bartender is very friendly and charismatic (and is bringing in repeat customers) they should be able to receive tips. But I guess at the same time,I actually changed my mindset halfway writing this comment. No; I, the customer, should not be paying the bartender more for giving me a more pleasant experience than the bartender next door. The bar owner should be reinvesting the additional profits brought in by the better bartender into said bartender’s salary and increase their wage that way. Tipping the better bartender gives them a raise at no cost to the establishment, which is ok for the bartender, great for the bar, bad for the consumer.
I’m not sure what you think my stance is or what point you’re trying to make.
I don’t think you understand the competitive pressure of every other restaurant not raising their menu prices 20% alongside you. Do you think that a business isn’t viable if they can’t absorb a 20% labor increase without raising prices?
I suspect you are not a reliable or competent business analyst.
I don’t think you understand my stance on the issue. Why would you assume that I think a restaurant should stop accepting tips while everyone else does, and also not raise their prices? You are making a lot of assumptions about what I think.
You are combining the two distinct possibilities I referenced as consequences for a restaurant that stops accepting tips:
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Raise menu prices, lose business to competitors
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Do not raise prices, fail by not covering expenses
Either way, it’s not sustainable to voluntarily go tipless, which is why those who tried, revert. You’re the one that said that made them unviable. Did you mean to say something else?
I said that a business which cannot survive without tips is not viable. I did not comment on what other changes might be required.
Then the vast majority of restaurants are not viable. Again, your business analysis is not viable. An opinion that ignores fundamental aspects of the trade space isn’t worth the cost to light the pixels to display it.
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at tobacco shop
POS: add a tip?
…for what, death?
Don’t forget to tip your landlord!
This is the dark side of Nudge theory. People need to practise refusing and it will stabilize. I tip handsomely when I want to and I refuse when I don’t. Sometimes I feel irrational guilt. I sit with the guilt for a while, then it’s gone.
Tip when you want as much as you want and no more. Refuse to listen to anyone who tells you that this is morally wrong.
Peace.
Yeah, us neurodivergent people don’t get dopamine hits from that kind of thing. We know the money isn’t really going to the worker in many cases anyway. It’s just going directly to the business to pay their employees normal wages which should be part of the cost of the product, not an add on charge. It just means they didn’t have to raise their prices with inflation.
I hate that tipping culture is a thing in the US and wish the culture would change. But as a former waiter, I’d never take a job at a no-tip restaurant (or even a pooled tip restaurant) because I always made higher than average tips than my coworkers.
