Gratitude and Gratuity

by Jim Stovall

During the current economic downturn, I realize many businesses and individuals are having a difficult time making ends meet.

Recently, my coauthor Tim Maurer and I released a book dealing with money and personal finance (www.UltimateFinancialPlan.com).  As a result of the publicity and promotion of that book, I have had the opportunity to talk with many groups and individuals about the economy, budgets, and personal finances.  While speaking to a group of people who work in the restaurant and food industry, I was shocked to find out how much economic conditions affect consumers’ tipping practices.

My first life experience in the world of business and commerce involved delivering newspapers.  I quickly discovered if I was reliable, dependable, got the newspaper on the porch or where the customer wanted it, and kept it dry during inclement weather, I could receive some generous tips.  I found that good service often brings a disproportionately higher tip.  This is to say that many times for slightly exceeding expectations, you can receive a tip two or three times larger than you would otherwise expect.

When you and your family or colleagues go out to eat, everyone knows that the standard expectation for tipping is a minimum of 15%.  If you cannot afford to comfortably pay for your meal and minimal tip within the context of your budget, you simply cannot afford to eat out.  Regardless of your personal financial condition or the prevailing economic trends, the person who serves you deserves to be compensated appropriately.

Experts disagree on how you should handle substandard or poor service.  Some feel you should not tip at all or limit your tip while others feel you should discuss your situation with your server or, better yet, management.  I feel if you’re going to withhold a tip, the server should understand why.  Withholding a tip should indicate the service was so poor that if your meal had been deficient to the same extent, you would discuss not paying your bill with the management.

Apparently, many consumers find a number of minor complaints in their own minds sufficient enough to withhold the tip, but they never express their displeasure or the reason for their actions with the server.  Tips are discretionary as are most standard expectations in polite society.  If you withhold a tip without discussing it with your server, it says more critical things about you than the waiter or waitress.

I have a personal problem with establishments that put a standard gratuity on the bill.  I guess there’s nothing wrong with it if it’s disclosed up front, but I simply think the practice defeats the time-honored tradition of tipping.  Invariably if there is a mandatory tip already added to my bill, that is generally all I will pay.

One of my favorite quotes from President Harry Truman says, “We will give millions for charity but not one penny for tribute.”  President Truman was expressing the sentiment that we enjoy being generous but not having things taken from us or required of us by people who feel entitled to what we have.

As you go through your day today, remember the people who serve you, and treat them as you would want to be treated.

Today’s the day!

Please note: I reserve the right to delete comments that are offensive or off-topic.

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11 thoughts on “Gratitude and Gratuity

  1. Only twice in my life have I chosen to not leave a tip and we always tip at least 20%. If the food is bad or cold, I do not blame wait staff. If wait staff is simply not too bright and makes mistakes, no problem there either. However, I always treat wait staff with respect…give me attitude and I will remember that when deciding the appropriate tip.

  2. Why is it that the server’s compensation is up to the customer’s wimsy in the first place? I, as I believe many people do, usually think of a tip as an “above and beyond” type of compensation. But these days, if the server is adequate – gets me my meal with a smile and does their job in a friendly manner, I am inclined to give 15% only because I know, from being one in previous lives, their “normal” compensation doesn’t cover the bills. But really exceptional service to a family with average income might result in what, 2-5% more in tip? Which on an average bill is a dollar or two? How motivating is that? It’s like paying taxes versus charitable giving…if you TELL me I have to give you something, I’m going to give you what is required. If you ASK ME NICELY and I believe it’s for a good cause, I’m far liklier to be more generous.

    • Wow, I think you’ve really touched on an interesting point, Tobi…We’re more likely to “helping” when it’s non-compulsory. I think you’re on to something!

      • I believe it might have to do with what we receive and why – we give because we are inwardly driven to give, not for any reward. But if we think it’s obligatory, we somehow automatically beleive we are supposed to get something for it. “Required tips” whether it’s an automatic 15% written into the receipt, or simply “understood” to be 15% as a general rule (as you say in your article), translate into buying the service, not rewarding a worthy cause or exemplary action. Therefore, if your service is less than you expect (which can be totally subjective, of course, but that’s a wholle other story), you feel okay about giving less than 15%.

      • Another gem, Tobi: “we give because we are inwardly driven to give, not for any reward.” I couldn’t agree more.

  3. This is an excellent column. I go to 15% and then round up, so I tip slightly more. As Jim stated, 15% is the expectation. However, if the service is really excellent, I’ll go up to 20%. I’ve known many servers (I always worked in the kitchen) and I think that it is wrong that customer look for reasons to not provide a full tip. If service is poor enough to hold back a full tip, you don’t have to look for it.

    The next issue that Jim could tackle is tipping when the customer is paying with a gift card. Unfortunately, many people will tip 15% on the balance after the gift card, sometimes as low as $5. Having a gift card should mean that you hook up your server, tipping up to 25% or 30%, after all, you didn’t even pay for your food, so you can kick in a little extra for a good job.

    Finally, whenever I have a really bad server, I usually look for a reason why they were so bad. It’s seldom because they were rude, but instead either because they were overworked with tables, are a new employee, or a complete idiot. In the last three cases, they don’t deserve to have tip held, especially if they are trying hard.

    • Nick, you make an excellent point that we shouldn’t be looking for “reasons to not provide a full tip.” I also appreciate your challenge that we recognize the factors outside of our server’s control–”overworked with tables, are a new employee, or a complete idiot”–and not hold those against them, “especially if they are trying hard.”

      Thanks for your contribution!

  4. I live in Austin, Texas and have noticed that more and more restaurants in our area are automatically adding gratuity to our tab (often when it is only my husband and I dining out. (We don’t throw our food and treat restaurant dining as a bonus – dining in good spirits.) It’s bothersome being stripped of the pleasure of tipping. I am finding that I have taken Stovall’s approach and do not extend a greater percentage than what has been required of me. My husband and I can no longer play our little game of who calculates the tip first at many of the restaurants we enjoy (or used to.)
    I am a decent cook in my own kitchen, so dining out has been based on the pleasure of the experience rather than the need for a quality meal. We are dining out less than ever before – which has been great for the waistline and budget but a bummer for this mom of three who would love a date night.
    I wonder what ended up “tipping” the scales, so to speak.
    I bought the book advertised at the top and am eager to dive in!

    • Jessica, I appreciate your thoughts, and I’m sorry to hear you’re being stripped of the delight of choosing your own tip! Otherwise, though, I’ve heard only wonderful things about Austin, and I look forward to visiting some time.

      Best,

      Tim