“I kinda like where I am. If I’m recognized all the time, I have to leave better tips in restaurants.”

William Sanderson, Actor

Pros and Cons of Tipping in Restaurants

Most of us take tipping in restaurants for granted.

We don’t even think a second about it since it just seems to be the right thing to do.

However, if we have a closer look at this topic, we realize that there are not only advantages, but also some problems related to tipping.

In this article, I show you all the pros and cons of tipping so that you can better decide whether you want to tip in restaurants or not in the future.

Audio Lesson

Advantages of Tipping

1. Waiters get a higher income
2. You can reward good service with higher gratuity
3. Waiters often urgently need money
4. Especially important in regions where minimum wages are rather low
5. It seems to be the right thing to do
6. Beneficial for restaurants since they have to pay lower wages themselves
7. Tipping has a long tradition
8. Can keep servers motivated
9. Better servers will get higher tips on average
10. May help to close the wage gap to a certain extent

Waiters get a higher income

One important advantage of tipping in a restaurant is that waiters get a higher income.

In fact, servers are often paid rather poorly and need tips to make a decent living.

In some cases, waiters are even paid below the minimum wage and would not even be able to afford rent in many cities without tips.

Hence, tipping can be crucial that waiters will be able to cover expenses for their basic needs, especially in cities with quite high rents.

You can reward good service with higher gratuity

Tipping also allows you to show your appreciation for the good service a waiter offered to you.

While there is often a minimum tipping percentage that is expected independent of the service quality, you could still tip some waiters much more in case they provided excellent service.

Therefore, it is on your discretion how much you want to tip and you are also able to punish poor service quality with lower tips.

Waiters often urgently need money

Many people who work as waiters often also urgently need money.

In fact, many waiters are students or other groups of people who just need additional money to finance their education or other crucial things for their lives.

Thus, waiters are often hard-working people who just need money to move forward in life and by tipping those people generously, you can contribute your part that all the hard work pays off for them.

Especially important in regions where minimum wages are rather low

Tipping in restaurants is especially crucial in regions where minimum wages are rather low and where costs of living are quite high at the same time.

Imagine you work as a server and just earn the minimum wage while you have to pay more than a thousand dollars of rent at the same time.

You will realize that this is not possible and therefore, without tipping, many waiters may even end up homeless one day.

It seems to be the right thing to do

Tipping in restaurants is also socially accepted.

In fact, if you don’t tip, waiters and also other guests will not understand your behavior at all and you may even get insulted due to that.

Tipping in restaurants is just expected from you and if you don’t follow this social norm, chances are that you will get socially isolated sooner or later.

Beneficial for restaurants since they have to pay lower wages themselves

Tipping can also be quite beneficial for restaurant owners.

If people tip generously, this increases the wages of waiters. In turn, restaurant owners can reduce the wages they pay their staff since tipping will compensate for the reduction in wages and servers will still be willing to work for the restaurant if tips are sufficiently high.

Consequently, restaurants can lower their labor costs significantly if people are willing to tip in a decent manner.

Tipping has a long tradition

Tipping in restaurants can also make sense from a historical perspective.

In fact, tipping has quite a long tradition and has been practiced for hundreds of years.

Therefore, by tipping in restaurants, you can also make your contribution to preserving historical traditions that might get lost otherwise.

Can keep servers motivated

Another benefit of restaurant tipping is that it can keep servers motivated.

In fact, the amount of tip you give shows waiters how much you have valued their service.

High tips can be considered to be a rating for good service while low tips can be a sign that guests have not been satisfied with the service you provided.

Consequently, waiters may also stay motivated if they get some appreciation for their work through decent tips.

Better servers will get higher tips on average

Tipping can also make sense from a fairness perspective.

If the service has been quite decent, waiters should earn more money compared to a state where the service quality has been quite poor.

Thus, with restaurant tipping, you have the power to influence the variable salary component of waiters, which can increase the salary gap between bad and good waiters and therefore can increase the fairness level in the industry.

May help to close the wage gap to a certain extent

The gap between highly-qualified and unqualified labor is still huge in many countries all over the world.

However, by tipping in restaurants, you are able to increase the salaries of low-income earners and to close the wage gap between different professions, at least to a certain extent.

Disadvantages of Gratuity

1. Restaurants may lower wages due to gratuity
2. Some restaurants even keep part of the gratuity for themselves
3. Not common in most other professions
4. Tipping results in significant social pressure
5. Servers are greatly dependent on tips
6. Income of servers swings with the size and the number of orders
7. You are also supposed to tip bad waiters to a certain extent
8. Arbitrary whom you should tip and whom not
9. Some waiters even get angry if you don’t tip them
10. Tipping can just be annoying

Restaurants may lower wages due to gratuity

Apart from the many advantages of restaurant tipping, there are still some downsides related to it.

For instance, one problem with tipping in restaurants is that restaurant owners will have an incentive to decrease the wages of waiters.

Every worker has a wage he or she is willing to work for.

For example, let’s say you are willing to work for a wage x and the restaurant currently pays you this wage x in a state without tipping.

Now tipping y is introduced. With tipping, you will now earn x+y.

However, the wage you are willing to work for is still x.

That means that restaurant owners can lower your wage for the amount of y since you will still be willing to work for this wage.

Consequently, this means that a high fraction of tips actually don’t benefit waiters, but rather restaurant owners since they can lower wages if tips increase.

Some restaurants even keep part of the gratuity for themselves

Some restaurants even directly deduct part of the gratuity from waiters and only a minor fraction of it will actually end up in the pockets of servers.

Many people who tip waiters may actually not even know about that, yet it is the reality in many restaurants all over the world.

Hence, before tipping, make sure that the waiter actually gets the money so that you can be sure that it ends up where it belongs.

Not common in most other professions

Opponents of tipping in restaurants often claim that it simply doesn’t make any sense since tipping is also not common in most other professions.

Indeed, it seems rather arbitrary to tip waiters but not to tip case handlers or people who work in several other professions.

Thus, the whole concept of tipping seems to be rather arbitrarily and may not make sense from an objective standpoint at all.

Tipping results in significant social pressure

Another disadvantage of tipping is that it can lead to serious social pressure.

In fact, if you don’t tip in restaurants, your peers will look at you in a strange way and may think that something must be wrong with you.

In fact, we all got this social conditioning that restaurant tipping is just the way how it is supposed to be and that not tipping is just strange.

Servers are greatly dependent on tips

Tipping in restaurants has led to a state where servers have become quite dependent on the tips of guests just to cover their basic expenses.

Restaurant owners are not dumb and often pay quite poor wages since they know that their guests will compensate the staff members with sufficient tips to make it worth working in restaurants.

However, this high level of dependence can be considered to be rather problematic since it should actually not be in the guests’ responsibility to pay the wages of the staff of restaurant owners.

Income of servers swings with the size and the number of orders

Since waiters only get a rather low salary from restaurants, they greatly rely on the tips of guests.

However, since the tipping amount will be a percentage of the actual price people have to pay for their food and drinks, the income of servers greatly varies with the size and the number of orders of guests.

This also implies that in bad times with only few guests, waiters will also suffer quite a lot since they will simply not make decent amounts of money.

You are also supposed to tip bad waiters to a certain extent

While it is reasonable to tip good waiters to appreciate their excellent service, it may not be justifiable from a fairness perspective to also tip pretty bad waiters.

However, you are still expected to also tip bad waiters to a certain degree and this seems pretty questionable to me.

In my opinion, it would be far better to eliminate minimum tipping rules so that people can freely decide how much tip they want to give.

Arbitrary whom you should tip and whom not

In general, tipping seems to be quite strange when we take a look at the job market.

There are so many people out there who don’t get tipped but still do decent work in the service industry.

Hence, why should those people not get tipped as well?

This confinement of tipping to restaurants and few other professions just doesn’t make any sense at all in my opinion and it might be time to take a different approach towards tipping in general.

Some waiters even get angry if you don’t tip them

Another issue with tipping in restaurants is that it leads to a certain expectation of waiters.

Most waiters just expect decent tips and in case you don’t give them the tip they think they deserve, some waiters may even get pretty angry and insult you.

Tipping can just be annoying

Tipping can also become quite annoying.

In fact, it is not even clear in which restaurants you are supposed to tip and in which you are not.

For instance, while you are almost always expected to tip in fancy restaurants or bars, you will often not be expected to tip in fast food chains.

However, remembering all of this when you are in a rush may be quite annoying and may lead to plenty of unnecessary stress.

Top 10 Tipping in Restaurants Pros & Cons – Summary List

Tipping in Restaurants Pros	Tipping in Restaurants Cons
Higher average income for waiters	Tipping costs you additional money
Important in areas with high living costs	Tipping may not make sense
Tipping can keep servers motivated	Arbitrary who gets tips and who does not
You can reward good service by tipping	Lower base wage if tips increase
You can show your appreciation	Social pressure related to tipping
Waiters rely on tips to survive	Restaurants often get a share of tips
Servers often urgently need money	Need for tipping can be annoying
Can make sense from a fairness perspective	You are also supposed to tip bad waiters
Tipping is socially accepted	Dependency of servers on tips is a problem
Tipping in restaurants has historical tradition	Income of servers greatly varies due to tips

Should You Tip in a Restaurant?

We can conclude from the previous analysis that there are indeed many pros and cons related to tipping in restaurants.

In my opinion, tipping is a rather outdated concept since it doesn’t benefit waiters too much.

Instead, restaurant owners can artificially lower wages and indirectly benefit more from tipping than waiters do on average.

Consequently, I think it is time to introduce different models where restaurant owners pay fair wages instead of guests paying a significant portion of the waiters’ wages by tipping.

Sources

https://en.wikipedia.org/wiki/Gratuity

https://www.bankrate.com/personal-finance/smart-money/a-cheat-sheet-on-tipping-dos-and-donts/

https://www.realsimple.com/work-life/money/money-etiquette/tipping-etiquette-guide

About the author

My name is Andreas and my mission is to educate people of all ages about our environmental problems and how everyone can make a contribution to mitigate these issues.

As I went to university and got my Master’s degree in Economics, I did plenty of research in the field of Development Economics.

After finishing university, I traveled around the world. From this time on, I wanted to make a contribution to ensure a livable future for the next generations in every part of our beautiful planet.

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