Comments on: The rule of 25% for calculating restaurant tips http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/ Articles on game theory and personal finance Wed, 08 Feb 2012 16:47:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Gary http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/comment-page-1/#comment-7389 Gary Thu, 30 Sep 2010 22:59:47 +0000 http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/#comment-7389 The restaurant business really has pulled one over on everyone. You not only have to pay for the food, you also have to pay tha salary of the servers. Check next time and actually count how many minutes a server spends on you. It rarely goes over three minutes for a meal. Now, take a $100 meal for four and add 20%. At $20 for the tip, the server made a rate of $400 per hour during the three minutes they spent on your table. That is excessive. Why did tips ever go above 10%? If prices increase, so does the tip, since 10% of a larger total is a larger amount. If bad service is the issue, that is the management's responsibility to correct. Nowhere else do workers have to be periodically handed extra money throughout their work day to insure acceptable performance. The practice of tipping should be ended. Pay the servers a wage appropriate with the skills required to do the task, and manage them accordingly to make sure they provide customers with an enjoyable experience. The restaurant business really has pulled one over on everyone. You not only have to pay for the food, you also have to pay tha salary of the servers. Check next time and actually count how many minutes a server spends on you. It rarely goes over three minutes for a meal. Now, take a $100 meal for four and add 20%. At $20 for the tip, the server made a rate of $400 per hour during the three minutes they spent on your table. That is excessive. Why did tips ever go above 10%? If prices increase, so does the tip, since 10% of a larger total is a larger amount. If bad service is the issue, that is the management’s responsibility to correct. Nowhere else do workers have to be periodically handed extra money throughout their work day to insure acceptable performance. The practice of tipping should be ended. Pay the servers a wage appropriate with the skills required to do the task, and manage them accordingly to make sure they provide customers with an enjoyable experience.

]]> By: fred jones http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/comment-page-1/#comment-5322 fred jones Sun, 21 Jun 2009 09:46:55 +0000 http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/#comment-5322 Most of the world works on the theory that if a restaurant cannot pay it's staff a fair wage then it is not viable just like any other business why should employees have work for tips? another word for that is SLAVERY By tipping your simply encouraging restaurants to not pay their staff properly, it's their responsibility not THE PERSON BUYING SOMETHING FROM THEIR BUSSINESS. Most of the world works on the theory that if a restaurant cannot pay it’s staff a fair wage then it is not viable just like any other business why should employees have work for tips? another word for that is SLAVERY

By tipping your simply encouraging restaurants to not pay their staff properly, it’s their responsibility not THE PERSON BUYING SOMETHING FROM THEIR BUSSINESS.

]]> By: Presh Talwalkar http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/comment-page-1/#comment-1718 Presh Talwalkar Wed, 07 May 2008 05:29:10 +0000 http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/#comment-1718 <b><em>Chris Bird</b></em>: I like your rule of 6 times the most expensive meal! This will make for very good conversation starters ;) I do loathe budgeting (thanks for reading that one), but often these rules are similar to the idea of <a href="http://mindyourdecisions.com/blog/2008/04/01/focal-points-or-schelling-points-how-we-naturally-organize-in-games-of-coordination/" rel="nofollow">"focal points"</a>--a way to converge on agreement or start out with the right frame. You raise a question about the practice of tipping. I've heard interviews with managers that tipping isn't about money but rather giving an incentive for service. I wonder if this is really true since there are many jobs people seem to work out of duty and they don't need a tip to perform better. Tipping also creates problems for people unaware of the customs. Who do I need to tip, and how much? I never know. Nowadays, I'm going to nicer places and finding I need to tip someone to get a towel after I wash my hands. I don't always have singles, so I feel out of luck. I see many men just run out without washing their hands to avoid the awkward interaction. What a strange result of tipping. Chris Bird: I like your rule of 6 times the most expensive meal! This will make for very good conversation starters ;)

I do loathe budgeting (thanks for reading that one), but often these rules are similar to the idea of “focal points”–a way to converge on agreement or start out with the right frame.

You raise a question about the practice of tipping. I’ve heard interviews with managers that tipping isn’t about money but rather giving an incentive for service. I wonder if this is really true since there are many jobs people seem to work out of duty and they don’t need a tip to perform better.

Tipping also creates problems for people unaware of the customs. Who do I need to tip, and how much? I never know. Nowadays, I’m going to nicer places and finding I need to tip someone to get a towel after I wash my hands. I don’t always have singles, so I feel out of luck. I see many men just run out without washing their hands to avoid the awkward interaction. What a strange result of tipping.

]]> By: Chris Bird http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/comment-page-1/#comment-1711 Chris Bird Tue, 06 May 2008 17:41:11 +0000 http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/#comment-1711 Ilike this 25% approach and will probably adopt it once I have figured out how to subtract the tax out! Seriously though, I absolutely hate tipping. I would very much like to see wait staff paid a living wage. Maybe a "government health warning" like, "We pay our wait staff so little that they need tips to survive at all" required in large letters on the fronts of menus at places that don't pay a living wage. One dirty little secret is that at some of the higher end restaurants the waiters are paid pretty well, and the tips are perks for them. At those kinds of places I generally tip less - at least when I can find out that the wait staff are paid. To help the kids, I developed a rule of thumb, when dining out at a decent restaurant for 2 including wine, the final bill will be approximately 6 times the cost of the more expensive main course. This is a wildly inaccurate approximation, but does allow me to do a "budget" (yeah, I know I have read the budgeting blog posting)or to make a decision on how much I want to spend, if that is more appropriate in here, for the dinner. I have used this without fail for more than 30 years. It doesn't help with the tip though :-( Ilike this 25% approach and will probably adopt it once I have figured out how to subtract the tax out!

Seriously though, I absolutely hate tipping. I would very much like to see wait staff paid a living wage. Maybe a “government health warning” like, “We pay our wait staff so little that they need tips to survive at all” required in large letters on the fronts of menus at places that don’t pay a living wage. One dirty little secret is that at some of the higher end restaurants the waiters are paid pretty well, and the tips are perks for them. At those kinds of places I generally tip less – at least when I can find out that the wait staff are paid.

To help the kids, I developed a rule of thumb, when dining out at a decent restaurant for 2 including wine, the final bill will be approximately 6 times the cost of the more expensive main course. This is a wildly inaccurate approximation, but does allow me to do a “budget” (yeah, I know I have read the budgeting blog posting)or to make a decision on how much I want to spend, if that is more appropriate in here, for the dinner. I have used this without fail for more than 30 years. It doesn’t help with the tip though :-(

]]> By: Presh Talwalkar http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/comment-page-1/#comment-489 Presh Talwalkar Mon, 12 Nov 2007 23:27:50 +0000 http://mindyourdecisions.com/blog/2007/09/05/rule-of-25-for-tipping/#comment-489 @Kyle: That's why we always let you calculate the tip :) @David: Another fun game is to pit your children against each other by letting them guess the total bill (without seeing the receipt). It's amazing how quickly a child can learn a $100 is really not that much money. @Kyle: That’s why we always let you calculate the tip :)

@David: Another fun game is to pit your children against each other by letting them guess the total bill (without seeing the receipt). It’s amazing how quickly a child can learn a $100 is really not that much money.

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