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New York Times
By STEVEN A. SHAW
Published: August 10, 2005

WHEN Thomas Keller, one of America’s foremost chefs, announced that on Sept. 1 he would abolish the practice of tipping at Per Se, his luxury restaurant in New York City, and replace it with a European-style service charge, I knew three groups would be opposed: customers, servers and restaurateurs. These three constituencies are all committed tipping - as they quickly made clear on Web sites. To oppose tipping, it seems, is to be anticapitalist, and maybe even a little French.
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But Mr. Keller is right to move away from tipping - and it’s worth exploring why just about everyone else in the restaurant world is wrong to stick with the practice.

Customers believe in tipping because they think it makes economic sense. “Waiters know that they won’t get paid if they don’t do a good job,” is how most advocates of the system (meaning most everybody in America) would put it. To be sure, this is a seductive, apparently rational statement about economic theory, but it appears to have little applicability to the real world of restaurants.

Michael Lynn, an associate professor of consumer behavior and marketing at Cornell’s School of Hotel Administration, has conducted dozens of studies of tipping and has concluded that consumers’ assessments of the quality of service correlate weakly to the amount they tip.

Rather, customers are likely to tip more in response to servers touching them lightly and crouching next to the table to make conversation than to how often their water glass is refilled - in other words, customers tip more when they like the server, not when the service is good. (Mr. Lynn’s studies also indicate that male customers increase their tips for female servers while female customers increase their tips for male servers.)

What’s more, consumers seem to forget that the tip increases as the bill increases. Thus, the tipping system is an open invitation to what restaurant professionals call “upselling”: every bottle of imported water, every espresso and every cocktail is extra money in the server’s pocket. Aggressive upselling and hustling for tips are often rewarded while low-key, quality service often goes unrecognized.

In addition, the practice of tip pooling, which is the norm in fine-dining restaurants and is becoming more common in every kind of restaurant above the level of a greasy spoon, has gutted whatever effect voting with your tip might have had on an individual waiter. In a perverse outcome, you are punishing the good waiters in the restaurant by not tipping the bad one.

Indeed, there appears to be little connection between tipping and good service. The best service in the Western world is at the Michelin three-star restaurants of Europe, where a service charge replaces tipping. As a customer, it’s certainly pleasant to dine in France, where the menu prices are “service compris,” representing actual totals, including the price of food, taxes and service.

Tipping is hardly the essence of capitalism. Actually, it would seem to have little to do with capitalism at all: it is - supply and demand be damned - a gift, a gratuity decided on after the fact.

Waiters and waitresses also believe it is their right to be tipped. A tip, while a gift, is a strange sort of gift in that it is a big part of the server’s salary. In most states, servers don’t even get paid minimum wage by their employers - there is an exemption (called a “credit”) for tipped employees that allows restaurants to pay them just a token couple of dollars an hour (as low as $1.59 per hour in Kansas and $3.85 per hour in New York City). They are instead largely paid by tips, to the tune of $26 billion per year.

When you talk to servers, you’ll find that most believe they make more money under the tipping system than they would as salaried employees. And that’s probably true, strictly speaking. The tipping system makes waiters into something akin to independent contractors. And in most any business the hourly wage of a contractor is higher than that of an employee. Yet in most businesses, people choose to be employees.

That is because those who wish to guarantee their long-term financial security sacrifice a little bit of quick cash for longer-term benefits like health insurance, retirement plans and vacation pay. But, of course, most servers see themselves as transient employees - waiting tables before moving on to bigger and better things.

Still, this may not always be the case. The large number of waiters I see in their 40’s, 50’s and 60’s put the theory in doubt. While kitchen workers trade low wages and no tips for a future in the business - the opportunity to rise in rank, to one day run a kitchen - what calculation do waiters and waitresses make? Under the tipping system, it seems, they’re trading a little extra now for the promise of nothing later. With his announcement, Mr. Keller has sent a signal to his culinary colleagues that there just might be a better way.

For their part, restaurateurs believe it is their right to have consumers pay servers, so they don’t have to pay their employees a living wage. They prefer the current system because it allows them to have a team of pseudo-contractors rather than real employees.

But that too is shortsighted. Over time, as in any service-oriented business, waiters loyal to the restaurant will perform better and make customers happier than waiters loyal only to themselves.

In this, the world’s most generous nation of tippers, most restaurants don’t even offer service as good as at the average McDonald’s. While it lacks style, service at McDonald’s is far more reliable than the service at the average upper-middle-market restaurant. This is not because the employees of McDonald’s are brilliant at their jobs - it’s because they are well-trained and subject to rigorous supervision.

And come to think of it, at McDonald’s there is no tipping.

Steven A. Shaw is the author of the forthcoming, “Turning the Tables: Restaurants From the Inside Out.”

Tipping Points
By Brian Farnham, Originally Published Aug 14, 2000

I recently heard of a woman who’d perfected a surefire method of getting her airline tickets upgraded. En route to the airport, she buys a gaily dressed fruit basket. At the check-in desk, she sets it down on the counter in front of the boarding agent. When the agent invariably comments on the basket, she says in a cheery voice, “Oh, yes, isn’t it wonderful? My co-workers just gave it to me as part of a big send-off. But I don’t know how I’ll manage it on the plane.” After a pause, she suddenly gets an idea: “Why don’t you take it and share it with the other agents?” She holds firm through some polite oh-I-couldn’ts and are-you-sures before the basket is accepted. And when her boarding pass is returned to her, it almost always reveals a bump to business class.

This is a classic example of an inducement tip (also known as a bribe). Most tipping is not of the inducement variety but a simple reward for good service. But the two forms of compensation are similar in that they reach beyond the prescribed standards of payment. It’s up to you to decide how much to give and how to give it. Such ambiguity can cause many people to whine like a Woody Allen character after sex: Was that good enough? Should I have done more? Do you think they liked it? But situations that call for a little something extra should be looked upon as opportunities, not traps. And as with anything else, it helps to know what’s expected of you.

Bars and Restaurants
This may come as a surprise to some, but the old standard of 15 percent for servers hasn’t been standard for some time now. The Zagat Survey began asking people about their tipping habits a couple of years ago and found that the average restaurant tip in major U.S. cities is just over 17 percent. That means doubling the tax to figure your tip leaves you on the chintzy side. (New Yorkers aren’t the most generous tippers in the country. Although we beat the national average, Philadelphia’s 18.5 percent puts us to shame.)

Some restaurateurs wish their patrons didn’t have to tip at all. Danny Meyer of Union Square Cafe has long favored switching to a European-style gratuity-included system, but for now he recommends his customers tip according to how they rate their service on a five-point scale, from poor or fair (10 to 14 percent) to extraordinary (21 to 25 percent). One thing you should never do, he says, is completely stiff a server, not even if service reaches Kafkaesque proportions of incompetence and neglect. “There are so many things outside of the control of a waiter,” he says. The best thing to do is leave a bare-minimum tip and speak to the manager. “And then you make your next reservation with that same manager, and you’re going to get exactly what you want.”

Bartenders are a different story. The point of tipping bartenders isn’t so much to reward the service you’ve already received as to insure promptness (supposedly the seventeenth-century English origin of the word: t.i.p.) the next time you order a round. Expectations vary: A buck a drink is generous at the Blarney Stone, an insult at the Bowery Bar. “At dive bars, they make great money, because they’re banging out drinks,” explains Rich, a bartender at Lotus. “But at a place like this, it’s more about presentation, so it takes longer.” Rich concedes that a dollar is okay if you’re ordering a Bud, but for a $10 Cosmopolitan, the fair tip is $2 or $3.

Rewarding bartenders and wait staff is a bunny slope compared to the double-black-diamond run of trying to grease your way into a fully booked restaurant. For starters, don’t even bother trying to tip for a table at the Le Bernardins and Daniels of the world. Tom Piscitello, the St. Peter at the gates of heavenly Babbo, has been offered everything and the moon by diners unable to wait a month to taste chef Mario Batali’s beef-cheek ravioli. “One night somebody just started naming numbers and going up as if it were a bidding war,” Piscitello recalls. “They got up to $700, just for a table. That’s sickness.” Piscitello politely reminded the diner of all the needy charities in the world and turned him away.

The odds get better at restaurants that are more about scene than about cuisine. The hip and pretty gatekeepers you find behind the podiums at flavor-of-the-week restaurants are, by nature, more disposed to accept a subtly proffered bribe because they’re young and trying to afford a TriBeCa apartment.

Apartment Buildings
A random survey of doormen around the city revealed a wide range of expectations. Depending on the priciness of the address and the size of the building, assistance with a heap of packages, cat-sitting for a day, or keeping an eye on a double-parked car can run you $5 to $10. Since most of these services fall under the doorman’s job description, you can get away with not tipping, but don’t expect him to drop everything when you’ve really got a problem. Then there are those delicate situations where not to tip is to court disaster. “What happens all the time is, a guy’s wife is away and he’ll come in with his mistress and hand you a fifty,” says one Park Avenue doorman. “That’s a you-didn’t-see-nothin’ tip.”

For the staff in New York buildings, the holidays must feel like a Mafia wedding, what with the number of cash-filled envelopes that come their way. A super at a luxury building of 200 units who averages $50 per tenant is pulling in a cool five-figure cash bonus — tax-free, if he’s disinclined to report it. Gifts are welcome, too. The doorman gossip circuit is still buzzing about the lucky stiff working a York Avenue building who received a Nissan 300ZX for Christmas a few years ago.

There are two things to consider when you’re determining how much to give. The first is building size — the smaller the building, the larger your bonus should be. The second is the level of luxury. Lawrence Vitelli of Insignia Residential Group, which manages some of the highest-priced properties in the city, says supers at its big buildings routinely get between $100 and $300 from each tenant, and at small buildings, $500 to $1,000 is not unheard of. But chances are you won’t have to shell out that much. For most buildings, $30 to $50 is appropriate for doormen, $50 to $100 for supers. Support staff like handymen and elevator operators are in the $20-to-$30 range. Adjustments should always be made according to seniority, and if you’re planning on doing any kind of renovation in the upcoming year, it’s in your best interest to give the super more than usual.

Beauty Salons and Barbers
The multitasking hierarchy at beauty salons can make tipping a tangled prospect. The general rule is that the more time someone devotes to you, the bigger the tip. “A lot of assistants do the entire blow-dry, so if they spent 45 minutes, that should be more on the $10 side of things,” says Connie Voines, a stylist at Bumble & Bumble. “But if it’s just a hand-dry that takes three seconds, then of course you should tip accordingly.”

Many salons provide tipping envelopes and a secure place to deposit them, to save clients the time of walking around the salon trying to find everyone who worked on them as well as the discomfort of handing out money. Put each tip in a separate envelope, and don’t forget to put your name and a little personal note of thanks on the outside. If you’re paying by credit card, you should still tip in cash via the envelope. And don’t feel guilty about not tipping the receptionist.

Taxis and Town Cars
Tourist guidebooks usually advise tipping cabbies 10 to 15 percent, but the best formula I’ve heard came from a magazine editor who takes a lot of taxis for work. If the fare is under $5, round up to the next dollar and add 50 cents. If the fare is between $5 and $10, round up to the next dollar and add $1. For fares over $10, round up and add $1.50 or $2.

I ran this by some drivers, and all declared it reasonable. They were surprisingly forgiving of low tips, perhaps because, with an unsympathetic TLC and a high-risk job environment, cheap tippers are the least of their problems. Says a three-year vet named Joseph: “A bad passenger is the one who doesn’t tip, a worse passenger is the one who doesn’t pay, and the very worst is the one who sticks a gun in your ear.”

If you often work late and take a company-paid car service home, you probably don’t tip, figuring it’s somehow included in the price. It almost never is. And if you use vouchers and have been writing in a tip, you may be wasting your time — many companies refuse to pay such tips when the monthly bill comes around. An optional $2 to $5, depending on distance, should do.

Creative Tipping
The first lesson to learn about bribery is that flattery works. “Compliments are absolutely amazing pieces of communication,” says Dr. Kelton Rhoads, a social psychologist and persuasion expert who offers influence consultation through his Website, Influenceatwork.com. “If I compliment you, even if you know that I’m kissing up, amazingly, studies have shown it will still affect your behavior on my behalf.” The second thing to remember is that rare is the situation that can’t be improved by a discreet show of appreciation. One Upper East Side mother, upon learning that her kids’ private-school bus stopped six blocks away from her building, wondered how stops were assigned. It remained an open question until Christmas, when she tipped her children’s driver $50. At the start of the new year, the bus suddenly had a new designated stop right on their street.

Then there are the situations where bribes are practically a tradition. Next time you’re stuck in cumulus-level seats at the ballgame, stroll down to the lower deck and explain to the usher or security guard on duty that you forgot your binoculars, and might there be anything open in his section? A tenner folded against your ticket will usually do the trick.

But the most important thing to remember about bribing (or tipping, for that matter) is that, just as on Dance Fever, you get points for style. Not long ago, a friend of mine was waiting in line at a chichi SoHo club behind a gorgeous woman and her frumpily dressed date. The bouncer waved the knockout right in but stopped her companion with a curt “Sorry, no jeans.” Rather than throw a fit, the man coolly produced a fifty and said, “I think if you look more closely you’ll see that these aren’t jeans. They’re blue cotton trousers.”