Should tipping in restaurants be banned?
Tipping has been on my mind a lot. A few days ago, I read about a new restaurant in Parksville called Smoke and Water that will be banning the act of tipping (they don’t open until June). As someone who has really struggled with the concept of tipping, I find this really intriguing.
So instead of tipping, as you can imagine, the menu prices will be higher – about 18% higher. The owner will pay his staff a living wage (between $20-24/hr for servers and $16-18 for cooks), instead of having them work for less and rely on tips to make up the rest.
The owner will eliminate the tipping line on credit card/debit receipts altogether, and if someone does leave a tip, they will give it back to them. If they can’t get it back to the customer, they will donate the money to charity.
The newspaper articles I read about this restaurant said that this is likely the first in Canada of its kind. But I found that this is common in many places in Europe, and I know it’s the model of countries like New Zealand and Australia as well.
@RomaLuciw I don’t like the idea of tipping, but until the system gets fixed, I feel obligated to tip so the actual workers get paid fairly
— Krystal Yee (@krystalatwork) May 12, 2014
After the news broke about this new restaurant, I listened to a Freakonomics podcast about tipping, and a Wait But Why article called Everything you don’t know about tipping. And now I feel like the whole concept of tipping could be at its tipping point (hahahaha).
But the problem is, until the system is fixed – until workers get paid fairly – I will always feel a moral obligation to tip people in the service industry. When I get a massage or have my hair cut or go out to a restaurant, I often wonder how much of what I’m paying is actually going into the pockets of the people performing the service – and how much is going back to the owner. So I tip. Not necessarily because I got good service (bad service gets 10%, good service gets 15-18%), but because I feel like I have to. And that’s not right.
Related: How much do you tip?
Another thing is, why do some customer service jobs get tips, and others don’t? I’ve worked in retail and customer service for over 10 years, and never once got tipped. I had repeat customers, people knew me by name, I made them smile, and I worked just as hard as those people in tip-based jobs … except I only made a base wage. Doesn’t seem fair to me.
Recently BF has thought about not tipping as a mandatory practice. Instead, he thinks he should only tip when he feels he receives good service – and even though I agree with what he’s saying, I scoffed at that idea because the system is broken. We’ve never NOT tipped, but the man has a point. Tipping shouldn’t be mandatory, and it shouldn’t be expected. You should only tip if you want to, but unfortunately our society seems to be a bit tip-crazy, and a lot of people will openly judge if you don’t leave a tip wherever you go. Maybe these little changes could be the catalyst needed to make a big change to the whole system.
It’s going to be interesting to see what customers think of seeing a significantly higher priced menu, and whether they will buy into the no-tipping model. For people who regularly tip less than 18%, perhaps that will be their cue to dine elsewhere. Or maybe customers and workers will start demanding this model be adopted by other restaurants.
What do you think about this no-tipping policy?
Do you think the Smoke and Water restaurant will be able to attract staff, as well as customers?
Author: Krystal Yee
I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.