Tip or Sign the Slip?

Tipping, a venerated system of checks and balances that rewards good service and punishes bad, is under attack, or is it evolution?

Customary overseas, automatic service charges are making headway in America as hotels discover how lucrative they can be, as pointed out by this substantive article in the LAT which noted:

    “A 2005 poll of top-rated hotels and spas by Michael Lynn, a tipping expert and associate professor at Cornell University in Ithaca, N.Y., revealed that almost 50% of those businesses added mandatory service fees and gratuities to guests’ tabs.”

That’s despite a Zagat survey that 90% of customers are averse to the practice.

Many hotels are adding service charges which should replace tips, but in some cases, the bellmen are still staring down customers for the handout.

What do you think? Should all tips be discretionary or does a flat “tip tax” ensure universal good service?


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  1. clash42 says:

    In my experience, anytime I’m somewhere that has an automatic gratuity(say a restaurant that automatically has a gratuity if the party is a certain size), the service recieve is worse. So this sort of practice worries me, and I’d rather tips be at my discrection.

  2. krcasey says:

    They should absolutely be discretionary. Mandatory tips aren’t tips, they’re up-front charges just like a room rate, tax, food & beverage. I don’t see hotel “service fees” as any different from resort fees or any other tactics to squeeze extra revenue out of each customer.

    I understand automatic gratuities in certain situations, e.g. dinner for 20 in a restaurant, but excepting maybe all-inclusive resorts (where the customer doesn’t need to break out the wallet once during their stay) I think service charges are bad for customers and bad for the employees (I’m sure the hotels are skimming more than a little off the top of these fees.)

  3. etinterrapax says:

    I also think that tips should be discretionary, although I don’t have any real problem with automatic service fees for large groups in restaurants, or when the marchant and customer agree that there will be one, as in the aforementioned all-inclusive situation. I wonder whether service used to be better when the wages paid to service workers were more in proportion to modest but adequate living expenses. I don’t think anyone really performs at his or her best in a job when even with tips, the money is insufficient or barely sufficient to scrape out a living. And discretionary tips assure that people who do their best at their jobs are rewarded for it. Or at least it deformalizes the screwing they receive, to a degree.

  4. AppTechie says:

    Having experienced the included fees in England, Scotland, and the Netherlands, I can say that having the tip automatically included is the worst idea ever thought. The service declines appreciably when the staff are getting paid regardless…

  5. billhelm says:

    I worry about the companies charging these fees pocketing them anyway and not passing them on to their staff. In that case, it should just be part of the price.

  6. Eirishis says:

    Couldn’t agree more with the other posters. I lived in England for five months, and I found that places with the service tax had terrible service as a general rule…certainly less than you would expect from similar places in the US. There were student bars where the ‘tenders took tips, and their service was ALWAYS better.

  7. konstantConsumer says:

    tipping should definitely be voluntary. i waited tables all through college, and it’s a great way to make money. it definitely encouraged me to be nice to people i wouldn’t have, which seems like a good thing.

    also, we don’t have to claim everything we make.

  8. Smoking Pope says:

    How lucrative service charges can be? If they’re just an automatic replacement for the tip, they shouldn’t be lucrative at all. It should go straight to the person performing the service like, you know, a tip.

    And if it’s not all going to that person, then what exactly are we paying for? It’s as if I mowed someone’s lawn and handed in an invoice that read:

    Lawn Mowed: $25
    “Because I Want More Money” Charge: $15

    Horrible, horrible idea on par with pay toilets and personal seat licenses.

  9. Elvisisdead says:

    I’m torn. I waited tables, but I also like the Euro model of doing things. What I don’t like is that the US minimum wage is subverted for waiters/bartenders. You DEPEND on the tips for your livelihood. When I was waiting, it was $2.13 per hour for waiters, and $5.25 per hour for other minimum wage jobs.

    I believe tipping does encourage better service, but not tipping just gets you remembered or served poorly at the bar. If you’re a shitty tipper, they WILL remember you the next time.

    Remember also, that tip income goes unreported by all but the most upright and honest of waitstaff. So, no taxes there.

    Mandatory service charges are dishonest. Just charge more for the items to cover that cost.

  10. desonos says:

    Built-in service charges are BS. I have a question though: can one refuse to pay the included tip? I know the once or twice I was in a foriegn country and we recieved terrible service the manager waved the “manditory” tip, but what would happen here if you refused to pay it?

  11. A_B says:

    Get rid of tips. Have these companies simply PAY their workers like other industries. Don’t pass off, not only the cost, but the entire process to the customer.

    If the customer doesn’t like the service, they should vote with their wallets and go elsewhere. They shouldn’t have to engage in the stupid game of tipping more or less. Just have employees give good service. If they suck, fire them or expect customers to go to a place with better service.

    This discussion is, inherently, “anti-consumerist.” It’s the discussion these companies want consumers to have: do I get better service with a fixed tip or voluntary?

    Screw that.

    The company should be responsible for making their employees provide good service.

    Don’t make the customer waste their time evaluating the service. That time I spend worrying about what kind of tip to give is time I shouldn’t have to give up.

    The fixed tip crap is just a way for the company to “have their cake and eat it too.” Instead of coming up with a final price for the customer for the service, they make an excuse that X is the cost, but Y is the service. As if that makes a difference. That money still comes from the same place. If they want to charge X+Y, suck it up and make that the price.

    There are many, many service industries out there. And in this service industries, the customer pays a fixed price. That’s it. End of story. You ever tip a doctor? A lawyer? Web developer?

    One of the reasons you don’t tip is because you pay them more than a waiter or bellhop. But that’s the point: the restaurant or hotel should simply pay their employees like a normal company so tipping isn’t a question of “I’m a waiter and I depend on those tips to survive!” Fully employed workers shouldn’t have to rely on the largesse of strangers to feed and house themselves.

  12. Ben Popken says:

    Brian writes:

    “I can’t comment on hotels that start imposing these charges, but I can say that there was a time when I worked for a roller rink/Chuck E. Cheese/birthday party/banquet hall type affair in Toronto. The place was called Rinx. They charged a 15% gratuity(on top of 15% Canadian sales taxes). The 15% went promptly into the owners pocket. I’m not opposed to the idea of forcing tips if the money actually goes to the staff, but I highly doubt it ever does, and certainly never in its entirety. If you’re not putting cash in the server/bellman/whoever’s hands, presume they’re getting nothing, and presume you’ll be treated accordingly if you ever return.”

  13. Das Ubergeek says:

    How is it dishonest? The cost of service is the cost of service. At least in Europe when you see £14.95 or 14,95€ you know that that is exactly what it’s going to cost you… here in the US, you see $14.95 and it’s actually going to cost you $18.45 (using San Francisco’s tax rate).

    I always hear people say that they have the right to refuse to tip — which they do — but they never seem to realise that when they stiff the waiter after bad service, the message received is not “you are a bad waiter” but “I am a cheapskate”. The way to get the message across is to talk to the manager and say, “I am not tipping that son-of-a-female-dog, and here’s why.”

  14. OkiMike says:

    It’s a toss up because here in Japan, there is no tipping. It is included with the cost of the product. However, “service” is legendary here at least when compared to other countries. I always hear foreigners (Americans, etc.) saying how welcome they feel when they enter a shop because its customary to have “Welcome” shouted at you when you enter and “thank you” shouted at you when you leave.

    But this “service” should not be confused with “customer service” that implies acts or good deeds performed in excess of the norm. In that regard, I don’t recommend trying to return a product (even if it’s faulty) to a store in Japan as you’ll most likely be met with blank stares and the often phrased, “I’m sorry, but there’s nothing we can do about it.”

  15. krcasey says:

    Responding to Das Ubergeek …

    There is something to be said for the VAT approach of “what you see is what you get,” especially for tourists who might not factor in expensive sales taxes (8.25% in CA) or gouge-tastic hotel taxes (14.75% in Washington, DC).

    But the practice of hotels automatically billing service charges under the guise of gratuity fees is *not* the same thing. These charges are not included in the room rate. They’re a separate, itemized charge that, in my experience, isn’t announced until the bill is received. That might not be dishonest, but it’s definitely not the same as the European custom you’re referring to.

    I agree that not tipping doesn’t convey the message that you didn’t think the service deserved it. You’re a cheapskate, nothing more. And if you plan to dine there again, well, let’s just say stick with the consomme.

    I think tipping is a sensitive topic in the U.S. because we tend to forget that it is an expensive habit. I tip 15% for mediocre restaurant service. Maybe that makes me the idiot, but we live in a culture where 15% is the ho-hum standard in restaurants. Imagine tacking that on to everything you spend money on …

    (The idiot theory is growing legs.)