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A few tips on how to tip

William Porter
The Denver Post
Dollar Bills and Receipt
Getty Images/Fuse | Fuse

Want to engage in a little experiment illustrating the extremes in economic philosophies, sundry views on what constitutes fair labor practices, plus basic math skills?

Go to dinner with five friends. Eat and drink. When the bill comes, pass it around and let everyone kick in their share, plus a tip. Nine times out of 10, you’ll fall short of the 20 percent tip that is the industry standard. Sometimes well short.

And the next question will be the same one asked at a poker table between the ante and the deal: OK, who’s light?



Tipping is one of those subjects that can spur controversy and consternation among service-industry workers and we, the served. Some diners — and for most of us, restaurants are where we do the bulk of our tipping — are loath to leave less than 20 percent. For a few, setting down even a 10 percent tip is like extracting blood from a turnip.

Helpful hint for those who didn’t pay attention in math class: To calculate a 20 percent tip, move the decimal point one digit to the left. That’s 10 percent. Then double it. Example: A $52 tab becomes $5.20, which doubles into $10.40. Round as you see fit.



Industry experts say that about $40 billion in tips are given each year. In May 2012, the U.S. Bureau of Labor Statistics showed the median hourly wage for restaurant servers was $8.92, including tips. And a 2012 PayScale survey found that waiters made 58 percent of their income from tips.

‘Tips are a lifeline’



Tipping may be an outmoded and unfair way of paying someone — and there is a small amount of industry buzz about whether restaurant workers should be salaried, or tips built into the check — but the bottom line is that this system won’t change any time soon, not in this country.

For many service workers, tips are a lifeline. No tips, no rent, no groceries.

“Tips are everything to a server or bartender,” said Shannon Smith, a hospitality-industry veteran who recently left the Avenue Grill in Denver for a job as a wine rep. “They make a lower minimum wage which usually works out to about $5 an hour. That money barely covers taxes. Then take into account the vast majority of these benefits offer no benefits.”

Smith notes that restaurants don’t offer paid holidays, and many don’t underwrite health insurance. She paid $180 out of pocket for hers.

In some circles, notably Cornell University professor Michael Lyon, there has been talk about discontinuing the practice of restaurant tipping and adopting the European model, where waitstaff are considered professionals supported by salaries and benefits.

On a Freakonomics podcast in late spring, host Stephen Dubner asked Lyon, who has written dozens of academic papers on tipping, about what he would change about the practice.

“You know,” Lynn replied. “I think I would outlaw it.”

According to Lynn, there is enough race and gender disparity in how much servers get tipped (blond women more, blacks less) that it’s an ethically dubious way of rewarding workers.

Not Going To Change

But moving from a tipping to a salaried model of compensation in the restaurant business isn’t likely to happen any time soon.

“Although 80 percent of a server’s income is through gratuity, the best advice I ever received as a young server in 2003 while at The Avenue Grill was from Shelly Mc-Candless, my general manager,” said Randy Layman, bar manager at Ace. “She said ‘never look at your tips. Good or bad, it all comes out in the wash.’ She was right.

The general guideline is 20 percent for excellent service, 15 percent for good service, 10 percent for bad service. If you feel the need to stiff someone, you should at least file a complaint with the manager about what happened.

“One of my biggest pet peeves was junky tips on discounted tabs,” Smith said. “If you got happy hour, depending on where, you probably saved 30 or 50 percent off your total bill. I think it is appropriate to tip on the full amount. If you think about it, happy hour is usually very busy, so that bartender is working harder to make those discounted drinks.”


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