What is Your Tipping Policy?

This one is in reply to a post on Million Dollar Journey:

Ask the Readers: What is Your Tipping Policy? Million Dollar Journey

Wow man, didn't you read the MyMoneyBlog post on this thing? It was a S***storm, you've just opened a giant can of worms :)

Cabs
As a guy who's never owned a car, I've taken a few cab rides in my life. I talk to all of them, most of them don't own their cab (in Winnipeg or Edmonton). It's typically closer to one guy who owns 5-10 cabs and all of the cab drivers are on for 12 hours b/c they can't make a living wage on 8 hours shifts. This may be different in TO or Montreal, but I always give a good 10-15% (sometimes more for short rides). You're trusting your life to these guys and they don't get paid very much.

Fast-food
The standard McPolicy is that tips go in the charity bin. The only exception is when the patron insists, then you can take the tip just to get rid of them.

Me I don't tip my Starbucks baristas, but when I go to the Gourmet Cup across the street, the one that charges me a buck less for my latte and always has top-notch fresh-baked goodies and is clearly run by the guy who serves me... well he and his staff will get a tip. Often I'll just give them the buck they saved me :)

Delivery Drivers
Are intentionally underpaid, so I throw them a couple of bucks. Around here, the pizza place tacks on like $2 for delivery which is clearly not paying the driver very well, so I throw him a few extra. If the delivery charge were $5, then he'd get nothing.

Waitresses
Waitresses are like the annoying black hole of tipping. My sister's a waitress and she makes great money (her best gigs made more per hour than I did as a computer consultant!), of course, I've watched her work and she's amazing... most waitresses don't meet that quality bar. But I'm still iffy on the tipping thing.

What annoys me at a deep level, is that I don't really go to a restaurant just to be waited on, I go there to talk and to eat great food. For my night to be good, I don't really need a good waitress, I just need one that isn't inept. Heck, if I could replace the waitress with a computer ordering system and just have someone drop off drinks, that would be just fine.

Personally, what makes my night is great food, and if anyone deserves the tip for great food, it's the cooks. At least around here, the people I know working the kitchens don't make great money. Unless they're independent or "high end", they're pushing just above 30k and they're working weekends and holidays and all kinds of crappy shifts. If anything, these are the people that make my night, why don't they get the tip?

And (400 words in) this is where things get really complicated. Different restaurants and chains have different procedures for tips and tip distribution. Now to start, if it were up to me, everyone involved in the services industry would make a fair working wage and the managers would simply be responsible for paying more money to good waitresses (just like everyone else does in every other industry). But barring legislation, that's pretty much just a pipe dream, so here are the details.

Waitresses at most places are required to "tip-out" based on their total receipts. Cooks will get 2% and the bar will get 2% and hostesses will get 1% at like a typical Earl's, Montana's, Boston Pizza, etc. This may or may not be after total receipts after taxes based on who's calling the shots (of course including the taxes just dilutes the tip even more and it's pretty shady). So the passive-aggressive 1-cent tip is not just insulting, it's financially damaging (yet somehow legal).

And that's where things get funny: financially damaging. Where I live in Edmonton, there is no minimum wage (or at least nobody works for it) as we have a massive boom and a big people shortage. So even with a 10% tip, the waitress can still take home $2.50 on my $50 order and she makes $11/hr (base) + $2.50 * number of tables which can easily push her into $25 range for handling like 6 tables (of which $14 is marginally taxed). Now that's just an average joint, even in Winnipeg, renowned for its cheapness (not frugality, just outright cheapness), a quality waitress can make $23+ / hour even with a base wage of $7.

Of course, once you factor in that $16+ of those hourly dollars are cash tips and are mostly untaxed, then your waitresses end up making the equivalent salary in the $30+ range. That's $30+ dollars / hour for an entry-level job with a small amount of responsibility. A lot of waitresses are making more than the guys who prep and cook the food.

So we come back to my previous thought, don't the guys cooking the food deserve most of the money? I mean, isn't their job just a little bit harder? So here's the math:

• Your meal cost: $100
• Waitress salary: $7
• Cook salary: $15

If you tip 15%, the waitress keeps 10% and ends up with $17, the cook gets 2% and ends up with the same number. As you add money to the cost of the meal, the waitress makes more and more relative to the cook. In fact, the only salvo here is that the cook should be able to cook more tables than the waitress is waiting and will therefore catch up (a little). But you're still throwing a lot of money at the person who didn't really do much that you couldn't have done yourself...

If you're like one of the crazy MSN writers and you figure that 20% is the new 15%, then the waitress ends up with $22 and the cook is still stuck at $17. (Of course, she's writing from the US where the minimum wage for wait staff is typically 50% of the regular minimum wage)

*sigh*

After this whole bit, I basically don't want to starve anybody, so when I'm tipping for a night out, I tip 12-15% and that's it. If I get really good food (better than expected for the price), then I'll add tip money specifically for the cooking staff (as written on the receipt), but this seems to happen pretty rarely.

It's not a perfect system and I have to vary slightly for specific places (i.e.: family-owned joints), or for when I'm sucking up a table for a long time (i.e.: watching a football game at the Boston Pizza). However, I think that it correctly accounts for the way services staff are paid and the amount that I feel they should be paid.

Of course, YMMV.