Cashing In (copy)

It used to be so easy. Plop down 15 to 20 percent of the bill at a nice restaurant, civic duty done.

Oh, there were little nuances—dropping spare change into the tip jar at a coffee shop or bakery, for instance—but the concept was still pretty simple. Because governments allow owners to stiff the service industry workforce when it comes to salary, diners are prompted to make up the difference.

Seems fair.

But let’s say you set aside your table service ways and take the kids to see how the fast casual half lives. Step up to the counter and more than likely you will face a dilemma. To tip or not to tip—or more to the point, how and when to tip—those are the questions we must deal with these days.

You see, a growing number of counter service restaurants ask that you tip before the meal rather than after. Some route the entire order and pay system to an iPad. Others complete the point of sale process on a touch screen, with prompts for a tip amount.

“There’s a certain amount of faith that there will be service,” says Lance Koehler, manager of Nick’s on the Bay in Monterey, which still uses old-fashioned paper receipts, though customers pay up front.

It’s a bit perplexing, but as communities and the service industry debate tip pooling, raising the minimum wage for wait staff or even eliminating tipping altogether, the questions remain. And there are many. What if you use a delivery service like GrubHub? The driver gets a tip, but the person back at the restaurant who pieced together the order is often left with nothing. Do you follow those handy tip suggestions on some receipts? They may be calculated on the full amount of the bill, tax included. And there’s that counter service conundrum.

“There are always people who won’t tip for counter service,” Koehler explains. 

The reasoning is pretty clear: if no one is serving the table, there’s no need to tip for service. And “No Tip” is an option offered on many touch screens. But there are other underpaid workers involved in putting an order together or tending to a dining room. 

Koehler also says customer tendencies often depend on the setting. At Pacific Bowls & Rolls in Monterey, for instance, there’s a central counter with receptacles so diners can clean up their mess. The layout at Nick’s on the Bay is more akin to a sit-down restaurant, once you get past the counter. And staffers are on the floor, bussing tables and assisting customers.

“You’d be surprised—some people tip really well,” he adds.

Most Americans still abide by the 15- to 20-percent rule, especially at table service restaurants. According to a survey by Zagat, diners subsidize service industry wages to the tune of 18.1 percent, on average. Square—the San Francisco-based point-of-sale touch screen provider—pins that amount a little lower, at 16.4 percent.

Perhaps the discrepancy is due to Square working with more counter service restaurants, coffee shops and other places where customers were once unlikely to leave a gratuity behind. Indeed, some restaurateurs report an instant jump in tip amounts after they swap the glass jar for a touch screen.

Yep. Bullying.

OK, not bullying. Fast Company calls it “guilt tipping,” adding that “Square is on track to facilitate roughly a quarter billion dollars in annual tips.”

In other words, those touch screen suggestions goad us into throwing down a few bucks of credit where we used to just leave spare change.

Call it a trickle up economy. Call it the answer to this week's Burning Question—it's all about the money. But there's more to know, and it gets rather ugly.

Some people are onto this ruse, however. Millennials tend to favor a living wage for restaurant staff and abandoning the tip subsidy model. According to recent surveys by CreditCards.com and TheTylt (a social opinion polling site), disdain for tipping runs so deep that 10 percent of millennials never tip and a third cap their gratuity at less than 15 percent. Almost half of the 71 million—give or take—millennials in the U.S. support a ban on tipping.

“I definitely see that millennials want this system to go,” Daniel Levine, a consultant with the Avant-Guide Institute and an expert on trends, told NBC’s Nicole Spector. “Millennials as a generation are more socially conscious and they have strong ideas about fairness.”

It turns out that Americans in whatever the generation that came of age around the turn of the last century were equally set against the tipping model. But their stand had nothing to do with fairness.

Scholars who study the history of gratuities—yes, there is at least one—suggest the early anti-tipping movement was based on more all-American impulses, such as racism and class consciousness.

Much of the sordid tale is laid out by Kerry Segrave in Tipping: An American Social History of Gratuities. Yes, that Kerry Segrave—author of the wildly influential Suntanning in 20th Century America and the hard-hitting Chewing Gum in America, 1850-1920.

The idea of giving someone a little extra for a job well done goes as far back as Medieval times—perhaps even further, but it was recognized as a custom when knights would tip serfs who went above and beyond (when they weren’t riding down helpless peasants for sport). When the 1850s version of America’s 1 Percenters learned of the practice, they attempted to bring it here. But the idea quickly fizzled.

UC Berkeley’s Saru Jayaraman, director of the university’s Food Labor Research Center, told Time magazine when Americans at first rebuffed tipping as condescending, that idea spread back to Europe. It’s part of the reason tipping is generally frowned upon over there.

So why did it catch on again on this side of the Atlantic? Well, despite the best efforts of Southerners, we put an end to slavery.

Unfortunately, we didn’t wipe out racism. The only positions open to newly freed blacks not consigned to sharecropping were service positions. And businesses quickly learned they could pay little or nothing, forcing black people to work for tips.

Segrave gleaned some lovely comments from the early days of tipping post-Civil War. 

Elizabeth Banks, who lived in Maine, wrote, “I, good American as I consider myself, do look down upon certain persons as my inferiors, and those persons are the ones who accept tips from me, and I expect and demand that they shall treat me as their superior...Tips and servility go together.”

And there’s this bit, from John Speed, a southerner who moved north and was appalled at the idea of tipping white servers: “Negroes take tips, of course; one expects that of them—it is a token of their inferiority.”

As tipping spread, people became uneasy about applying such a degrading practice to people—make that white people—working in the service industry. Even Ralph Waldo Emerson found the act intolerable. “Though I confess with shame that I sometimes succumb and give the dollar, yet it is a wicked dollar which by and by I shall have the manhood to withhold,” he wrote.

Not much of a sequel to Self-Reliance.

By the 1910s, several states moved to ban tipping. But the effort was short-lived, in part because restaurateurs began to realize they could offer lower salaries to employees on the receiving end.

That’s Business 101.

One day the curious notion of fairness might take hold. Until then, however, we must continue to help the poor owners out. (Labor cost is a big chunk of a restaurant’s overhead, to be fair). A few places around the country have experimented with a no-tip model, paying a higher wage and rounding the expense into menu pricing.

Otherwise, tipping—how, when and how much—remains up to the individual. But even when there’s no server, the little extra does help those minimum wage bussers and dishwashers.

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