PDT 2/2 : Why has tipping increased?
 

OK, so here's the deal. I was pondering two questions today. I thought there was a slight chance these threads might make for decent EDF threads, but a good chance that they quickly result in just pretty retarded discussion. But, whatev, I can lock threads, so here goes.

Don't answer this question unless you have an economic/business/sociological aspect to your post. PEOPLE TIP TOO MUCH!! or PEOPLE ARE CHEAP!!! or F TIP JARS AT SUBWAY! or whatever are all idiotic responses, so don't make them. Thanks. If you think the thread sucks, just ignore it, it'll get locked soon enough if it sucks.

Also, if you don't agree with the premise of this question, DON'T RESPOND IN THIS THREAD, thanks.

So, having said all that, here's the question.

Why have standard tipping amounts/expectations increased over time?

When I was growing up, pretty much through college, 15% was relatively standard, but it was not uncommon for people to tip 10% and it was very rare for people to tip over 15%. Friends who waited tables would be very surprised to get tips over 15%. And tipping pretty much just existed at sit-down restaurants.

Nowadays, 15% is like a baseline tip. That's pretty much expected. Especially at nicer places, 18%+ is often the norm. Friend who wait tables at places like that often expect 20%. Also, tip jars now exist at all sorts of low-service places.

So, the question is, why has this happened? Tips rise proportionately as prices increase, and eating out is definitely more expensive, so it's not to keep up w/ inflation or anything like that. But the societal norms of tip percentages have crept up.

Why is that?

Re: PDT 2/2 : Why has tipping increased?
 

I don't think it's gone up as much as you think- you state that it's gone up from 10-15% to 15-18% since you were in college; that doesn't seem like that substantial of an increase for a 60-70 year time period.

Re: PDT 2/2 : Why has tipping increased?
 

SSM,

LOL, GOOD ONE!

Seriously, though, why should it go up at all? It tracks the increase in prices at restaurants, so it's already increasing at the same rate as that.

Re: PDT 2/2 : Why has tipping increased?
 

I think the tip cup one is easy. Tip cups have become more common, which leads to greater acceptance, which leads to more tip cups. If your employer allows you to put out a tip cup, you will. Tip cups allow employers to keep wages low because the increased income, even if it only works out to $1/hr. There's variance associated with tipping so it gives employees something to talk about.

Re: PDT 2/2 : Why has tipping increased?
 

Who,

OK, I'll buy that. Some dude put a tip cup out where none ever existed before, some people put money in there ... now tip jars are f'ing everywhere. Makes sense.

OK, people, we're done w/ the tip jar part of the question.

Re: PDT 2/2 : Why has tipping increased?
 

Inflation? Move to other countries where tipping is not part of the culture? /end troll

I believe a part is due to the increase of people's spending power and the constant preaching of tipping more than the norm if you're a true gent. I have no idea why that is but more often than I can count I have heard/read that being a rule: "don't be stingy with tip because it gives the girl the wrong impression etc etc".

FWIW I always tip twice the tax dollar amount in restaurants, and in California that'd be ~16%

Re: PDT 2/2 : Why has tipping increased?
 

Lets imagine there is some combination of economic and social factors that control how much the average tipper can afford/is willing to tip. We'll call this the 'tipping environment'.

Lets say the previous standard was 15%, but now there is a rise in the 'tipping environment'. Suddenly your average tippers feel good about tipping 15-18%. They feel good putting down that tip that is bigger than the previous standard. Your big tippers now need to tip even higher to retain their big tipper status. Everyone except the bad tippers has started to tip more, so the standard is raised.

Now lets say that the next year is a bad one for the tipping environment. Your average tippers are tipping 17% based on the previous standard, but who is going to be the one to start tipping 15% again? Average tippers don't like tipping below the standard, thats why they are average tippers. It was fun to be the early adopter that started tipping 17% and feel generous, but nobody wants to be the jerk that starts tipping below standard all of the sudden. Since the average tippers haven't lowered their standard, the big tippers can't either, or they won't be big tippers anymore.

So the standard can really only go up or stay the same. The average tipper doesn't want to tip below the standard, so it never goes down.

Its kind of like blackjack. Once you start raising your bet, you can't go back down.

Re: PDT 2/2 : Why has tipping increased?
 

Home equity loans?

The economy essentially has been booming for 25 years so maybe people feel a little freer with their money now. A prolonged economic downswing might cause tips to shrink again.

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
SSM,

LOL, GOOD ONE!


[/ QUOTE ]

Even when I win, you win.

[ QUOTE ]

Seriously, though, why should it go up at all? It tracks the increase in prices at restaurants, so it's already increasing at the same rate as that.

[/ QUOTE ]

I just feel like society is migrating toward generosity becoming increasingly accepted. Tips allow people to 'set their own price' if you ask me. That is, I can pay 10% tip on a cheeseburger because my drink didn't get filled enough, but I can leave a dollar on a 4 dollar sno-cone because the lady is smiling and I have been looking forward to this all day.

It's just a chance to show what you appreciate. In this case, I really appreciate good service; sometimes someone who adds just a little bit of conversation, without going too far (although I usually prefer my wait-people to be prompt and silent), or someone who can answer a question about the area, or something of the sort.

I guess tipping makes people feel in control, to some extent.

Re: PDT 2/2 : Why has tipping increased?
 

Tipping in Ireland has, as far as I can tell, gone way up over the last 10-20 years. Not to US levels, but to more than almost anywhere else in the world. I think this is because the country has become more Americanized, and much more prosperous with an economic boom beginning in the early 90s and still felt today.

I doubt this helps explain an increase in tipping in the US, but I thought another data point would be useful.

Re: PDT 2/2 : Why has tipping increased?
 

I'd say one factor would have to be the acceptance of the transitional phase between young adult and adult. Back in the day, lots of people went straight from high school in to a career-oriented job. Some went to college, but obv way less than the number going today. Today, it's much more acceptable for kids to spend some time dicking around (either in college or elsewhere) before choosing a career. I'd venture to say that the majority of these people spend at least a little time in the service industry during this transitional phase.

Therefore

1. More people can sympathize with the amount of work that goes into serving because they themselves worked in the service industry (plus, everyone now has "that guy" in their group of friends who always needs to point out that he tips well because he knows what it's like to have to live off tips).
2. The quality of the person performing the job has gone from "dumpy 40-something chain-smoker mother of 3 who couldn't cut it as a paralegal" to "perky, energetic college kid who has other things going for her besides this side job." It stands to reason that quality of service would rise as well.

Re: PDT 2/2 : Why has tipping increased?
 

well on the service end its obvious why its expected to go up. why wouldnt you expect more money all the time if you work hard? the limit on this expectation is how much people are willing to pay. i think this has risen over time because of societal pressures to look generous. i would think this is pronounced by the fact that we tip all the time and it kind of sucks to think youre a cheap bastard 5 times a week.

Re: PDT 2/2 : Why has tipping increased?
 

Are people in the US in general better off financially than before?

As far as I can tell, there seems to be a correlation between the standards of living of a country and the amount people expect you to pay vs. what they quote you. The richer the people, the more generosity is implicitly required of them. You are expected to be a gentleman about this - and if you really can't afford it you can just pay the stated price. Poorer people are expected to haggle, so they are quoted higher prices initially. And if you're rich (tourist) you just pay the higher price without bitching.

Just a guess.

Re: PDT 2/2 : Why has tipping increased?
 

One possible explanation is that the IRS has gotten much more effective at taxing tips. In the old days, a tip of 10-15% went 100% in the server's pocket. Only a very small fraction of tips were reported as income. Now that the IRS requires employers to impute tip income to servers, a tip of 20% probably leaves the waiter with the same income after tax that they used to get.

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
Why have standard tipping amounts/expectations increased over time?

[/ QUOTE ]
Not read the other posts yet, but I think there're two reasons in the US. The former hasn't happened in the UK so far as I know, which might explain the difference in tipping culture.

1. Tips are taxed effectively. The IRS assumes you receive tips of a certain percentage, and so the value of a tip is reduced

2. Whilst the poorest people are richer now than 20 years ago, the richest are a LOT richer. Therefore, it costs them a similiar percentage of their dispoable income to tip 20% today vs. 10% 20 years ago

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
Tipping in Ireland has, as far as I can tell, gone way up over the last 10-20 years. Not to US levels, but to more than almost anywhere else in the world. I think this is because the country has become more Americanized, and much more prosperous with an economic boom beginning in the early 90s and still felt today.

I doubt this helps explain an increase in tipping in the US, but I thought another data point would be useful.

[/ QUOTE ]
This is probably a function of more disposable income, Ireland has become a lot richer in the last 20 years.

Re: PDT 2/2 : Why has tipping increased?
 

they tried to autograt my party of five freakin people ~19.5% last night (they do 18% but the jerkhole of a waiter added it after tax). the service was somewhere between mediocre and poor.

i don't know why, but i do know it's retarded.

Re: PDT 2/2 : Why has tipping increased?
 

It really depends on the country. I speak to my friend who wait tables here in montreal and most tips range from 10-20% with 15% still the norm. Sales tax here is 15% so its pretty easy to just copy the taxes. Maybe that specific coincidence has prevented tip inflation from occurring.

In terms of a hypothesis on US tip inflation, id guess that its due to our culture becoming a more service driven economy and people realize the difficulty of a service job because they have experience in something somewhat similar. If you get a mechanic in the sixties who goes out to dinner he think that the idea that a waiter works really hard is funny, because he views all service jobs below his tough, real-job. Now there are less and less people like that around

Re: PDT 2/2 : Why has tipping increased?
 

Diablo, I'd be interested to see how the wages of servers v. the mean wage has altered since you were in college. I'd guess that servers wages have risen less in real terms that the general increase in wealth. This would be my explanation.

D

Re: PDT 2/2 : Why has tipping increased?
 

dean, not true. If you look at restaurant prices im pretty sure you'll find that they rose proportionally to the level of wealth. Things like that dont really change over time so much because people are willing to allocate x% of their income to eating out, so when incomes rise so does the amount they will spend on dinners and the restaurant owners raise their prices.

Re: PDT 2/2 : Why has tipping increased?
 

my g/f claims that in the parts of the midwest she's lived (Wis. & Indiana) 10% is pretty common. I suspect she's just cheap. Can anyone from a flyover state confirm this?

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
Tipping in Ireland has, as far as I can tell, gone way up over the last 10-20 years. Not to US levels, but to more than almost anywhere else in the world. I think this is because the country has become more Americanized, and much more prosperous with an economic boom beginning in the early 90s and still felt today.

I doubt this helps explain an increase in tipping in the US, but I thought another data point would be useful.

[/ QUOTE ]

Tipping in Ireland is partly my fault. I was over there and just couldnt help but to tip people. In the tour book it said that it was pretty much not even acceptable except at resturants, but I was just tipping all the people that I would normally tip in the US. Plus tipping with Euro's is fun cause you can just flip them a few 1-2Euro coins!!!

+EV

Re: PDT 2/2 : Why has tipping increased?
 

I tip 20%

1- because there's something that makes me feel good about knowing I'm tipping slightly more than normal. I try to be a very appreciative customer. It's not just tipping, but also lots of thank yous and whatever else. This is mostly because of my brief experience working in the service industry.

2- it's mathematically easier to figure out a 20% tip.

I'm not sure if you can generalize either of these to everybody else though.

Re: PDT 2/2 : Why has tipping increased?
 

"2- it's mathematically easier to figure out a 20% tip."

20% - Figure out 10%, double it
15% - Figure out 10%, add half

I fail to see how it's much easier

Re: PDT 2/2 : Why has tipping increased?
 

I think Dids (and some others) have unintentionally hit on the real reason that tips are increasing.

While the relative wealth of the country has increased, the average person's perception of their own wealth has disproportionately increased. That is, people have a very inflated sense of their own worth. Savings are miniscule and debt (mortgages, credit cards) has skyrocketed. In addition, cash is less commonly used.

All of these factors combine to convince the tipper that:
1 - they have more wealth than they actually do
2 - there is a never ending money stream (borrowing) that is without cost or risk
3 - like casino chips, it is much easier to write down a bigger number on a credit card receipt than it is to count out the cash


There are some, like Dids, who tip big because it makes them feel good to help out the worker. I think more people tip big because it makes them feel like a big shot and the ramifications are hidden.

I'll paraphrase Woody Allen, from an old stand-up routine:

"I got a role playing god. I was a method actor, so I started tipping big, because I knew he would."

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
I think Dids (and some others) have unintentionally hit on the real reason that tips are increasing.

While the relative wealth of the country has increased, the average person's perception of their own wealth has disproportionately increased. That is, people have a very inflated sense of their own worth. Savings are miniscule and debt (mortgages, credit cards) has skyrocketed. In addition, cash is less commonly used.

All of these factors combine to convince the tipper that:
1 - they have more wealth than they actually do
2 - there is a never ending money stream (borrowing) that is without cost or risk
3 - like casino chips, it is much easier to write down a bigger number on a credit card receipt than it is to count out the cash


There are some, like Dids, who tip big because it makes them feel good to help out the worker. I think more people tip big because it makes them feel like a big shot and the ramifications are hidden.

I'll paraphrase Woody Allen, from an old stand-up routine:

"I got a role playing god. I was a method actor, so I started tipping big, because I knew he would."

[/ QUOTE ]

I can't imagine anyone tipping 18-20% rather than 15% because it makes them feel like a big shot.

Re: PDT 2/2 : Why has tipping increased?
 

It's not about how much more you tip, it's just that it's "more" at all.

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
20% - Figure out 10%, double it
15% - Figure out 10%, add half

I fail to see how it's much easier

[/ QUOTE ]
x + 2(.1x)
x + .1x + (.1x)/2

Re: PDT 2/2 : Why has tipping increased?
 

I usually use 15 as a baseline and 20 if theyre good. As diablo said, I think having your percentage rise over time is kind of silly, especially since it seems like places raise their prices with a bit more frequency at this point than in the past.

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
"2- it's mathematically easier to figure out a 20% tip."

20% - Figure out 10%, double it
15% - Figure out 10%, add half

I fail to see how it's much easier

[/ QUOTE ]

isn't the comparison actually

20% - Figure out 10%, double it
15% - Figure out 10%, then figure out half of that, then add half to the 10% (and try not to forget both of those different numbers while you're adding them in your head) (while trying not to look like you're thinking too hard about what the tip should be)

Figuring 10% is easy for anyone, just move the decimal. 5% is hard. Not for you, maybe, but for the general population. $73.70 is $7.37 for 10%...quick, what's half of that? doubling is easier.

And I think there's a theme of looking for the easy solution here:

[ QUOTE ]
FWIW I always tip twice the tax dollar amount in restaurants, and in California that'd be ~16%

[/ QUOTE ]

[ QUOTE ]
Sales tax here is 15% so its pretty easy to just copy the taxes.

[/ QUOTE ]

And people used to carry those "tipping calculator cards" in their wallets.

hell, maybe they still do:

http://www.tipping.org/tipcards.html

...this tip card has a bit of, what, social engineering built into it, with columns for 15% and 20%. As if to say, here's the *minimum* you should give, and here's an alternate amount--if, say, the service was better than just the *minimum*...

none of that really answers the question of why-have-tips-gone-up, though. I think it's due to

1) mathematical simplicity. maybe that's find 10% and double it. maybe it's take 8% tax and double it. either way, it ends up somewhere in the above-15% range. and if you're aiming for a 15-20% tip, no one knows how to get to 17 or 18%...so it's easier to figure 20% and shave a bit off, than to figure 15% and add a bit on.

2) social engineering. there's a lot of rhetoric about 15% as the, you know, absolute minimum acceptable amount. really, the implication is that, if you "only" leave 15%, then either you're a cheapskate or the service must have been noticeablly awful in some way. (seems like these definitions used to be applicable to people leaving 10% or less) so there's been an inflation of the definitions of cheap/acceptable/good tipping.

2a. This may be a nit, but I'd always understood the traditional amount-to-tip-on as the meal itself, not the drinks & tax. But these days it seems like the amount at hand is the total bill (again, perhaps because it's easier to work with the final total than to try to figure it out w/o drinks/tax...also perhaps b/c that inflates the amount, as noted above in the autgrat of 18% becoming 19.5% when done after tax). that's possibly going to account for some difference, too.

2b. one last thought - perhaps younger generations are learning tipping habits/culture differently than older ones. again, no one's carrying tip cards around anymore.

Re: PDT 2/2 : Why has tipping increased?
 

Yeah I pretty much always just double the tax. So i guess i actually tip 16.5% or whatev.

Re: PDT 2/2 : Why has tipping increased?
 

I tip 20% because I'm Asian and am trying to undo a stereotype.

Re: PDT 2/2 : Why has tipping increased?
 

Standard was 15%. Big groups of people, and even smaller (6) would go to a restaurant, the wait staff would get short changed for various reasons, and then the restaurant implemented a standard gratuity of 15% for parties more than 6.

Over the years, that percentage has gone up to 18%, even 20%. As that automatic gratuity (which is oxymoronic in itself) percentage increased, so has the idea of what a standard tip should be.

That's my theory.

Re: PDT 2/2 : Why has tipping increased?
 

I think it's as simple as "it's generational". My parents were very frugal, me not so much and my daughter and her husband even less. And I think that's pretty typical.

Re: PDT 2/2 : Why has tipping increased?
 

when i grew up the standard for excellent service was 10%. less for less service. some time ago wait staff pushed for 15%. and soon that became the norm and now its like 20% if you fall for the speal.

prices have risen the fastest in the food industry and the percent tip in dollars has outpaced inflation without the need to give a higher percent of the bill. i dont be gruge anyone for wanting more that human nature. in higher end places the wait staff make more than the managers.

i believe that the current generation have less value on money(good) and feel fine about bettering others (good)

Re: PDT 2/2 : Why has tipping increased?
 

dean,

"Diablo, I'd be interested to see how the wages of servers v. the mean wage has altered since you were in college. I'd guess that servers wages have risen less in real terms that the general increase in wealth. This would be my explanation."

That's a big part of what I'm wondering here.

If we look at the following factors:

Restaurant sales
Server fixed wage
Server tip

What is (Server fixed wage)/(Restaurant sales) now vs. 20 years ago?

What is (Server fixed wage + Server tip)/(Restaurant sales) now vs. 20 years ago?

I'm curious if the overall labor cost for restaurants has stayed at the same percentage, of if the restaurants have reduced labor cost as a percentage of expenses by keeping the second number constant, taking advantage of the increase in tips to pay their employees less.

Re: PDT 2/2 : Why has tipping increased?
 

Pyro,

"I'd always understood the traditional amount-to-tip-on as the meal itself"

Yes. People used to talk about "tax + tip" being a certain combined percentage applied to sale. Now most people talk about tip on top of the amount of the bill, which includes tax.

I think that's due to two things - laziness in math and some good work by the tip-receiving community in always talking about it like that, resulting in a couple extra percent coming their way.

Re: PDT 2/2 : Why has tipping increased?
 

I think it is very simple: people came to the conclusion that, regardless of percentage, less than a buck is inexcusable, a buck is not really that great and a couple bucks is better. It is a small leap from there to 'what can 2 bucks get you nowadays: not much', so I'll leave 3 or 5. Pretty soon you are routinely tipping in the 20+% range on your low and mid-priced meals in order to leave something you view as substantial and it becomes your standard, even when you are dining at higher end places.

When you could actually buy a beer or something for a buck or 2, that tip seemed OK. When those prices went up, those tips seemed lame.

KJS

Re: PDT 2/2 : Why has tipping increased?
 

[ QUOTE ]
If we look at the following factors:

Restaurant sales

[/ QUOTE ]

What I'd be interested in is the percentage of expensive restaurants compared to 20 years ago. I'm 34 so I don't know if it is because I'm getting older and thus am exposed to pricer establishments more often or if they are simply more common.

I think bottle service is a good example. Until 6-7 years ago I had never heard of bottle service. Until 2-3 years ago it was something that was only offered in major cities. Now it seems like any half decent club is pawning off $40 bottles of vodka for $250-350.

If people are spending more then it means they will probably be inclined to tip more as well. Eventually the higher tip percentage starts to spread from the more expensive establishments to the rest.

---------

The increased use of credit might also have been a factor. I hate credit but I believe it is probably easier to over tip with credit than cash.

--------

Frequency of going out has increased over the last few decades. I go out a lot so I tip much better than average. While I wouldn't say I'm friends with the staff you do get a relationship of some kind with them if you see them a few times a month.

Re: PDT 2/2 : Why has tipping increased?
 

Also at least in Canada I think the removal of $1 and $2 bills has led to higher tipping. Nobody wants a pocket full of change so much easier to leave behind coins than bills.