Tipping: Down and Out

penny-pinchingThings are tough all over. This isn’t exactly news. I can’t think of a single person I know who hasn’t been hit on some level by the mess our economy is in. Everyone, it seems, is scaling back on spending.

And who can blame them?

In a city that prides itself on its food scene, San Francisco’s restaurants have taken a very hard hit. With fewer people lunching and dining out these days, many places in the city have either laid off staff or cut their hours. Some once-favored haunts have decided to close their doors for lunch, some have chosen to to hang out the “Now Open for Sunday Brunch” sign (which is usually an indicator of fiscal desperation), some have been forced to shut down permanently.

As a professional waiter, I consider myself very lucky to be working in a popular and (blessedly) busy restaurant. Hell, I consider myself lucky to have a job. Period.

Tipping Down

The current trend in dining these days seems to be downsizing– from the price tag of the wine purchase to the amount of food ordered. Perfectly understandable. Not a single server I have talked to about the situation was unsympathetic to the current, collective economic plight. People are ordering fewer bottles of wine, and more are going for what some refer to as “non’trées”– the ordering of appetizers in lieu of main courses. It’s a hit to our wallets, of course (I have personally seen an average 30% decrease in my own sales), but we know were not the only ones. It’s been openly discussed at our staff meetings that the guests who were dining with us in the fat times are still here with us in the lean ones, and we should be ever mindful of that. Which, for the most part, we are. The goal is to keep them coming back. We are making less money, of course, but we are working harder for it.

And that’s fine.

What isn’t fine is the much more alarming trend that seems to be running apace with the downsizing of dine-out meals– the downsizing of tips. Along with decreased sales, servers are seeing a general lowering of their gratuity’s percentage. And this is not okay. Not at all.

Tipping Out

I’ve always wondered if people who have never worked in the service industry know how restaurant tipping actually operates. It’s a subject that most people probably don’t give much thought to. You tip your server, she pockets the money, and goes home with it at the end of the shift.

But that’s not how it works.

In a recent phone interview with a reporter from a major national newspaper, I was asked about the current economic situation and how it was affecting San Francisco restaurants. In relating my own experience, I told her roughly what I sell on an average night and what my tips are like. When I told her where exactly that money went, how I am taxed on my sales, and what I actually walk out the door with, she was surprised. She explained to me that, in all the years she had been covering restaurants, she had never even thought to ask about the process of tipping out. I respected her for that admission. And it dawned on me that, if she didn’t know, how many diners do?

If I am given a $50 tip, on a $250 bill, that’s wonderful, but it’s not exactly all mine to keep. In most restaurants, especially high-end places, a server is not simply working for his own tips. In my place of business, the gratuity I receive from any given table goes towards supporting nine other employees. Ten, including myself.

Here’s an illustration of what is occurring with ever-increasing frequency in our restaurants. Possibly just a bad turn of luck, but it illustrates what really happens when a good server receives a bad tip:

I’ll use the example of a fellow waiter who took care of some regular guests and four of their friends. The waiter in question is extremely professional– fun and chatty at the right moments, formal and efficient at other times, or any combination of the above-mentioned, as each case necessitates. And, above all, he actually cares about what he’s doing. He puts his heart into his work.

The regulars and their guests were treated to a few complimentary appetizers and were well taken care of, as usual. When the bill arrived, it was not the regular guests who paid, but one of their tablemates. On a $500 check, the guest left the waiter a $20 tip. Needless to say, the waiter was upset, but could say nothing, except to his co-workers and manager. Vent it , shrug it, face it, let it go. Hopefully do not repeat– that is often our sanity-saving mantra.

His tip may have been $20, which is insult enough, given his high level of care and service. The financial damage, however, is far worse in such cases.

The Break Down.

Granted, the “tip out” (what a server tips out to his support staff) varies from restaurant to restaurant. Some houses pool tips, others ensure that the kitchen staff receives a percentage. The permutations are endless, but all enacted with the goal of supporting the other, no-less-important members of the service team. This is how it works at our place of business:

Tip outs are based on sales, not the total amount of gratuity.

On a $500 sale, the waiter must give, at the very minimum:

Busser: $15 (3% but usually closer to 4% since a busser is a server’s chiefest ally)

Food Runner: $5 (1%)

Hostess: $5 (1%)

Bartender: $6.25 (1.25%)

Our stocker receives $5 per waiter as a flat fee every shift, our barista receives $10.

We do not ever decrease the amounts given to our support staff.

Having been given $20 for his services, the waiter actually lost about $12 taking care of these guests. And that’s just on the surface. The IRS calculates roughly 8% of a server’s sales as taxable income, owing to the variability of tipping. 8%, in this instance is $40– more than twice what the waiter was paid.

Clearly, I am biased. I have a vested interest in people tipping properly. And by properly, I mean 15% at the very minimum for basic service. Good service deserves 20%. That is our custom.

The goal of this post isn’t to shame people into tipping more. My readers are, by and large, pretty savvy in these matters. I just have the feeling that, if more people understood where that tip money goes and what the consequences are to those who bear the double brunt of lowered sales and lowered tips, they might think twice about saving that extra few dollars by leaving less money to the people who take care of them.

If you are well taken care of, take care of your caretakers.


And pass it on.

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About Michael Procopio

I write about food and am very fond of Edward Gorey. And gin.
This entry was posted in Rants and Stories and tagged , . Bookmark the permalink.

16 Responses to Tipping: Down and Out

  1. I’m glad that you chose to write about this, because I don’t think customers, bi and large, actually understand how it really works.

    My type o was intentional, but actually means nothing.

  2. Mark Demeda says:

    I expect Mr. Procopio’s articles to be instructive, interesting, and edifying. This article is no exception. And I agree with him. My father said that if you can afford to dine out, you can afford to tip well. Hopefully this article will shame at least a few of those who do not subscribe to my father’s philosophy into reaching deeper into their pockets.

  3. laurairiarte says:

    Great blog…though many restaurants have different tip out policies…some better…some worse…i worked in fine dining in napa… Can you add a subscribe by email option please? ~L

  4. Derek says:

    Although I generally agree with you about the trashiness of undertipping, I am very confused as to why the system for paying out tips is based on sale percentage as opposed to tip percentage. That is just stupid.

    I suppose I could understand the need to regulate shady waitstaff, but this is 2001 and a real city and a real restaurant; EVERYONE is paying with a card. In fact, it’s even 2009! Cash probably doesn’t even exist. There is no good reason for a waiter to lose money on an undertipping table.

  5. Pingback: The Beat on the Street « spume

  6. Cory Cartwright says:

    Paying out based on sales percentage rather than tips is so the people underneath the server on the food chain have two things: a guaranteed tipping percentage, rather than be reliant on the server to bring it in (ie. if the server fucks it up at a table they are punished, not the rest of the staff), and more importantly they have a solid number at tax time that doesn’ rely on the honesty of the wait staff. In highschool I worked both systems, one where the wait staff was tipping based on tips they made, and one based on sales. At the end of the night it was much easier for us busboys to take a look at total sales per server, than it was for us to tally up receipts or track down servers who had already left.

    Excellent post, it’s really sad to see that people still feel like they are entitled to dine out and not feel they are entitled to still tip.

  7. Bill says:

    others ensure that the kitchen staff receives a percentage

    Just as an FYI, this practice is a violation of federal labor law and restaurants who make it mandatory are being sued in massive class action suits.

  8. sarah says:

    i wish tipping were abolished to get rid of this ridiculous system. in japan there is no tipping but service is excellent. have you read about the high-end restaurant in southern california (i forget the name) that abolished tipping? it was a very interesting read.

  9. sarah says:

    p.s. fwiw i do tip and tip well. i appreciated this article and plan to continue tipping well until the practice is abolished! 🙂

  10. I used to work in a feudal restaurant not unlike the Benihana chain. That place was even worse because we had to put all of our tips into the “kitty.” At the end of the night, 50% of the “kitty” went to the knife-tossing chefs, because, after all, they were the Entertainment. But I do not think that people tend to tip DOUBLE at places like this- a tip is still a tip, 15% or so. Then we had to dole out the percentages you mentioned to the bussers, etc. THEN the remaining money was divided BY SENIORITY, so that more experienced waiters would get more than double what newbies like me got.

    On top of that we had to RENT our uniforms – the kimonos, etc. and BUY the special Japanese undergarments and toe-socks that went with the shuffly geta shoes. It was… really incredible.

    I lasted a summer there. I was 19. I didn’t know any better.

  11. WhisperCampaign says:

    So, as probably the only non-food industry commenter thus far, I have to say, I find the train of comments here kinda distressing. For me, I’m trying to show my support of the food service industry by continuing to eat out as often as I can. Now you want me to guarantee a 20% tip? I think your motto of eating out = good tipping well may be plausible if you’re talking of fine dining. But most of us patrons who are trying to keep our local mom ‘n’ pop dives in the black are giving what we can. Would you rather we not come at all?

  12. Navi says:

    Shoot. I buy less so I can give a higher tip. WTF is wrong w ppl?

  13. MB says:

    I had no absolutely idea what so ever about the tipping out business (I was a waitress on the beach in the Netherlands for 4 summers about 15 years ago so I do have some experience).

    Out tipping to busers and food runners seems very reasonable but tipping a set amount to baristas and bartenders for services not always rendered feels like a slippery slope.

    I love those receipts that show the 15, 17.5 and 20% percentages (but not the ones that suggest 25%). Now I’ve read the article above, I wish the back of the receipt included some information on where the tip goes.

    I hate that dilemma caused by places with super food, great atmosphere but overly intrusive wait staff. This out tipping thing makes it much easier to feel ok with the 17.5%. We pretty much always do 20%- exceptions are overly intrusive wait staff and non vegetarian food after ordering vegetarian.

  14. jcharocky says:

    whisper campaign, did you not read what the original poster wrote? when you under tip, you can actually cost the server money!
    so yes if its a tipping on sales situation, and your going to be cheap and trashy about it, we’d rather you not come since I don’t want to have to take 20$ out of my own pocket for the opportunity to wait on your stingy butt.

  15. Diana says:

    We only eat out about once a month because that’s what we budget for. When we eat out, we keep in mind that whatever we spend we’ll need another 20% for tip. If service is poor we’ll tip 10-15% (and that’s if it’s obviously bad). I’ve been a barista and know that for us, tips were food money. Customer service is tough, the food industry is tough. I feel like it’s more responsible and respectful of us to eat out less so we can tip well. We’d also rather eat out for one nice meal a month than 4 crappy ones!

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