Sign In

VIDEO: What Would Happen if All Restaurants Abolished Tipping?

Published

Several high-end restaurants have implemented "no tip" policies. Instead of patrons leaving a tip at the end of the meal, these restaurants have increased their food prices by 15% to then pay their wait staff a higher salary.

In this brief — yet lively — video discussion, our experts ask: Could a tip-less system work everywhere?


What about you, readers? Do you think doing away with tipping could work on a larger scale? Or is it doomed to fail? Tell us what you think in the comments below!


Related dealnews Features:
Follow @dealnews for the latest roundups, price trend info, and stories. You can also sign up for an email alert for all dealnews features.
Staff Writer

Dan Leadbetter is a Staff and Features Writer for DealNews. He enjoys comedy, playing drums, watching horror films, fine cigars, and Absinthe.
Please note that, although prices sometimes fluctuate or expire unexpectedly, all products and deals mentioned in this feature were available at the lowest total price we could find at the time of publication (unless otherwise specified).
You might also like
27 comments
DinglyThing
Not tipping is the rule in Japan and some other countries, on the other hand, tips and bribes are the norm among the third world.
I hate seeing a menu item at $15.95, and figure $1.20 tax and a tip of $3 or $4, makes that $15.95 become in reality a $22.00 item. I would like for the menu to reflect the actual price I am expected to pay. I think a restaurant could (and should) adjust wages based on performance (diner satisfaction) the way regular businesses do for their employees.
yphanh2002
I'm kind of anti that way. As we all known, most of waiter/waitress are living based on tips, and customers most of the time tip based on their satisfaction . I know there are some jerks who don't even tips a penny but there are also some people who tips like half of their bills. In the end, you get reward for your work; you make customer happy and you deserved a good tip. On the other hand, you don't do your job well; you receive a little tips.

I eat at many Asia restaurants where waiter/waitress like throw the menu on table, ask what do I want and they never even pass by to check for water refill, .... I even have to go to cashier ask for my bills. Do you think in that case I should even tips? I'm not cheap but with that kind of services I don't think they deserved it.
boilers
I think everyone that does something for someone else, sometimes called WORK, should be paid per unit of time. Multi-million dollar events, like the SuperBowl, have scores of local volunteers, and performers that train, practice and work dozens of hours for nothing. And you know someone is making millions off of the event. I think it would be fair(er) to have every hour you are doing something for someone else, be paid at least minimum wage, and if the resulting product is too expensive, so be it.
Denn
Abolished tipping is the only way to go.. I go with this. Added to food. Great. no one has to figure out anything. GO FOR IT. I AM IN!!!
asimmons30
If tips are built-in to the wages, then waiters would have to declare more of a percentage of their tips as income! Besides, tips are a customer's way of rating the service. I've tried complaining to management when bad service was rendered, but doesn't work if management is bedding the wait staff!
bobbyjr44
Well, on my first point, servers are normally paid a lower (than min-wage) wage, to be offset by tips. But since they won't be tipped anymore, wouldn't that mean that they would have to be paid min-wage? So would that MW PLUS the 15% tip subsidy? If that's the case, then the workers in fast food joints may have to be paid competitively... which would mean that we would be tipping everywhere we don't normally tip.
bobbyjr44
I don't think it'll work for 3 reasons. 1) restaurants where you don't normally tip (McD's, BKing, TacoB, etc.) will have to implement the policy into order keep their pay competitive. 2) Another problem would be that waiters would now be taxed on the money they get. 3) Servers would lose incentive to work for tips if they didn't feel like they would get one or it's included either way. And what about large parties? Don't they usually require 18%? They would lose the ability to ask for a higher tip if 15% were built into the cost of the meal.
hendrim
It works everywhere else so don't you think it could work in the US as well?
rich9nyy
Get rid of tipping in restaurants! If it can be worked out that I'm still paying the same 15% anyway and the servers get paid AND Uncle Sam gets paid, that's what we need. Why is this the only industry that can get away with paying someone $2.13?! Figure out how to get it done!
rich9nyy
bring back the dealnews podcast!
EHarrington1
This is a clever way for restaurant owners to take a bigger slice of the pie.
Ask the servers at these high end restaurants... are they better off getting an hourly wage now than they were on getting 20% of the check?
If a party of 4 spent $300 at an upscale restaurant (which isnt hard to do), a 20% tip would be about $60. Lets assume the party is there for 1.5 hours, that amounts to about $40 an hour.
Is the restaurant really going to pay them a comparable wage to $40 an hour?

Also, this is assuming each waiter/waitress has only 1 table at a time.
jononymouse
Too many waiters and waitresses do not claim the tips in order to collect unemployment.
They also do not report the earnings to the IRS.
Wanderer claims restaurant owners must make up the difference, sorry but that NEVER happens.
Increasing the cost to customers would put many restaurants out of business.
Restaurants are listed as number one in terms of failure rates of business industries. Florida waiters and waitresses avoid waiting on Canadians if they can because they do not tip in Canada.
StormieN
Okay guys, I am a junior in college, and I work part-time at a small Asian restaurant, where I get paid $2.50 for an hour working as a waitress. Im quite used to receiving a $2 paycheck after all those taxes cuz I mainly make money by serving people. A lot of ppl dont know our salary is that low, so they tip us pretty bad (under 10%, or, no tips at all.) We have always tried to ensure that all of our customers satisfy with the food and service at the restaurant, but some jerks just don't really appreciate that. Come on guys, you take your whole family of 5 out to eat and tip your server 89 cents (yes, I said 89 freaking cents) when the bill is $42. Awwww I hate my job!
Agro
The US is really the only country where tipping is expected. I grew up in Australia where wait staff are paid a livable wage, and you only tip for actual GOOD service. I've had roughly the same percentage of good v bad service in the US as at home.
midwave
This is common practice in Japan, and the waiters and waitresses treated us better than most of the U.S. establishments.
VERMINATOR
One thing I would not like about "abolishing tipping" is there are times & some restaurants I have eaten at where the service was awful.
I have never not tipped a wait staffer but I leave as little as I can (10%) to reflect the service.
However, there have been some servers that have gone out of their way (in my opinion) to make sure I did not do without anything I wanted or needed. Waitstaff took excellent care of me & had enthusiasm for the people they were helping.
That type of person I like to reward with more than a 15% tip because they did more than 15% of work. They have pride in their jobs.
The other problem with not tipping & raising food prices to make up the difference in waitstaff salary is there are a few servers that knowing they will receive a tip no matter what kind of service they provide.
They might not be helpful & look after the needs of the restaurant patrons.
They may not do their jobs & it could be a bad experience for the customers.
Just my thoughts.
Ohappyday
Tips are not gifts, they are counted as income and are taxed, at least in California. They take it out of your paycheck. If you are a food server in a decent restaurant, it isn't unusual to get a 2 week paycheck for .05 (yes, that's five cents). Yup, after taxes, a five cent paycheck for two weeks work.

As a customer, I would love to see the 15% included, and not have to pay a separate tip. However, having been a food server, I doubt the wait staff will see it reflected in their pay. I can utterly see the wait staff getting ripped off if this goes into effect, with the owners pocketing most of it making up excuses to cover their greed/theft.
Pelican Joe
Hey, you guys look a lot like the guys who did the dealnews podcast! I miss that podcast!

What I think of your show... Wait! You are not doing that anymore.

Now on the 15%, I'm all for it. I tip no matter what type of service. I don't think that it is my duty to motivate the wait-staff with an extra amount of money. It is up to the restaurant to train their staff to deliver the quality of service they want delivered. Having a waiter working for a tip during a restaurant visit is like a car salesman working you over for a commission on a car sale. ...and, we all know how fun that is:) !

Love the ... err show?
anton18g
I think tipping should be done away with. It is an extremely unfair system and is usually a mindless act. I worked at a famous sandwich shop and my tip take home was usually $1 on average and I could never understand why sandwich makers are not tipped, yet coffee baristas are. I know every state has different laws, but in WA all employees have to be paid minimum wage of $9.19 an hour tip or no tip. If you cannot survive on that much then find a better job. Saying that these servers and bartenders need the tips to live is bizarre when nobody tips the burger flipper at a fast food joint because they only make minimum wage too. I see no reason to tip a bartender for simply opening a beer or pouring me a pint if I do not tip my auto mechanic. They are simply doing their job and providing me the product that I paid for already, if they go above and beyond what I pay for, then that should welcome a tip maybe.
married2lori
One thing that you failed to factor in is how the restaurant would be likely to staff in each situation. At $2-$4 per hour, you can generally expect that there will be sufficient staff available to handle unexpectedly busy periods. Raising the food prices to cover higher wages only works while you are actually selling food, creating an environment where the restaurant will be afraid to over staff. So, even if the servers would want to provide the same level of service, there would be more instances when they were challenged with more work than they could handle.

Another consideration is the likelihood that some customers would continue to insist on leaving "a little extra". I can then imagine that, as those guests begin getting preferential treatment, it would again become customary to tip.

In very high priced restaurants, guests often
Aloha
It is NOT legal to pay them under minimum wage. Many restaurant owners do this with the assumption that tips will make up the difference but the IRS and the rest of the federal government does not include tip income as part of the minimum wage requirement. Many, many restaurant owners do this, and many, many restaurant owners are fined very heavily.

Working in the restaurant industry is very hard. In addition to the above, many restaurants require servers to make up the cost of dine & dash customers (i.e., those who leave without paying) out of their own pocket; servers also often tip out up to 50% of their evening's tips to the kitchen staff, greeters, bartenders, etc.
satyrrr
I don't think many restaurants would do that because everything you pay in 'wages' costs at least 20% in government taxes. For most employers a $10/hr employee costs them $15/hour by the time they pay all the taxes. A tip is a gift and should not be taxed in any way!
wanderer
So how is it that they get paid less than the receptionist at my dentists office?
wanderer
From the U.S.
Department of Labor
Wage and Hour Division
The employer may provide oral or written notice to its tipped employees in
forming them of items 1-5 above. An employer who fails to provide the required information cannot use the tip credit provisions and therefore must pay the tipped employee at least $7.25 per hour in wages and allow the tipped employee to keep all tips received.
Employers electing to use the tip credit provision must be able to show that tipped employees receive at least the minimum wage when direct (or cash) wages and the tip credit amount are combined. If an employee’s tips combined with the employer’s direct (or cash) wages of at least $2.13 per hour do not equal the minimum hourly wage of $7.25 per hour, the employer must make up the difference.
Aloha
Servers don't get paid that much. Mostly under minimum wage. I don't think your doctor or trash collector get paid $2.13/ hours. That's why their income pretty much depends on tips. Keep in mind there are a few occupations where tips are common, including taxi drivers, food and beverage servers, hotel porters and housekeepers, manicurists, and hair stylists, to name a few. OF COURSE, all that being said, if they deserve it, meaning, are they good at what they do? Are you happy with their services?
wanderer
I have always wandered about tips. Why is it that we have to pay our waitstaff extra to do the what the restaurant hired them to do. We pay high prices for our food and then we also have to pay extra for the restaurants employees? Do you tip your doctor for prompt service, or your nurse, do you tip your postman, your trash collector, your mechanic, your surgeon , your cook. Why is it that only certain employees receive this perk?
Bonoca
I would love a tipless system. I think the really good waiters would stay and the schlock would leave.

And I would love to see those tip jars at coffee and sub shops disappear....those drive me crazy! Those people are simply order takers....I stand in line to place my order and they don't bring me my food. Yet, they expect me to tip them???
Leave a comment! or Register