THE TIPPING POINT

A newspaper article by Damian J. Troise caught my attention, because the headline read, “ Profits remain high at restaurants.” And the article went on to say, “Retail sales in the sector jumped from 11.8% in July and 9.5% in June from a year ago,  and a spending surge for dining out has a reported solid profit growth. Restaurants have been big contributors for discretionary spending, and the sector is expected to report 20.3% profit growth during the current quarter.”

So, that explains why restaurants have been competing for workers, but are they offering them higher pay or has “tip-flation” taken over the job market?  Creating  software that encourages big tips has put a lot of pressure on customers. SQUARE, the company behind many payment screens gets a cut of each transaction— including the tip. So big tips make more money for SQUARE.

Boston University, Sean Jung says, “The power of social pressure is real. It make you feel like you have a choice. The famous word for that is ‘nudging’, and tips in the United States have been nudged up to 20%.”’

However, it seems as if we are now at a tipping point, because tips for restaurant servers are down about 10%. A month ago, I went the the bagel shop to buy 1/2 a dozen bagels. The bagel guy behind the counter put my order into a paper bag, and on my visa bill he had added a 20% tip. When I returned a month later, I paid cash, and dropped 25 cents into the “tip jar.”

After that experience, I was hesitant to get a phlebotomy before my physical exam, because I was afraid the technician wouldn’t remove the needle from arm before getting a tip…OR, should she have tipped me for the blood?  

Then I went to Walgreens to get two vaccinations—one to prevent flu, and the other to prevent a respiratory illness. Since I got a shot in each arm, should I have tipped the pharmacist 20% for each arm.  It’s so confusing!

The word, “tip” dates to the 17th century when London taverns would put out signs saying, “To insure promptitude,” alongside plates where customers could drop coins for faster service.  There was no tipping in the U.S. until after the Civil War.  Then in 1966 Congress created the “tip credit,” which legally allows restaurants to pay restaurant workers a sub-minimum wage accepting that tips would take up the slack.

Personally, I don’t mind tipping 20% for excellent service. Although, I do realize that the waiter is performing the same service when delivering a filet mignon to me, and a hamburger to the guy at the next table. Although the waiter has not prepared my meal, I am not tipping the chef, but am tipping on the price of the food—not so much on the delivery.

The end of this tale is of course that, sadly, after all of his  his hard work, our cheerful waiter cannot pocket the full tip after all, because he has to share it with the table clean-up crew as well as the rude washer of dishes in the kitchen. The restaurant makes a profit, and the tip gets sliced up. Oh, yes, Life behind a tray of dishes is not fair…It’s not fair at all.

Esther Blumenfeld