Rant: Tip Culture

[Diddy]

It's occurs to me that I never reported any of my tips on my taxes. It wasn't a huge amount and I wasn't in a job that relied on tips and they were always cash. I know ski instructors that made huge tips, sometimes cash sometimes on the card. It would be hard for the IRS to have any idea what kind of cash tips they were getting because it varies so greatly and tips are not really expected. How does say a bell hop or someone in a similar profession handle tips? Are they just a perk or are they paid a smaller wage and expected to make it up in tips?

[stlouie_lipp]

ha ha:

[Michael]

I love tip culture at bars.

In college a grizzled 5th year senior taught me how to work the system. It's called "the hookup". Basically, anytime you are comp'd a drink tip half the value of the comp. For example, if you order an 8 dollar drink tip 4 bucks. When a bartender is semi-familiar with you things escalate quickly. I swear this system pretty much works at any type of establishment. My current "hookup" joint is Sepia in Chicago, which a Michelin Star'd fine dinning restaurant that serves luxe cocktails. I have dinner there and they pretty much give the bar away to me. Not to mention I always get the super premium alcohol, generous pours and "extra tastes". It's amazing.

[Diddy]

I've had that with a few different bars. One in college I don't know how we didn't put out of business because none of my frat paid and one in colorado. The one in vail was kind of funny we knew we'd get charged something but at te end of the night our tab would be 10% of what it actually was and wed leave a very generous tip. One night a new bartender and the owner were working behind the bar and the new guy pours us a drink of cheep whiskey and charges s full price, no big deal its not like we expect a hook up. The bar owner jumps over from the other side of the bar and tells the guy "these guys don't pay here and they drink off the top shelf". That bartender never charged us for a drink again. Ill assume that alot of it was because we'd send tourists tat way when they'd ask what bar to go to but all he'd ever tell us was that we took care of his employees so he'd take care of us.

[go birds]

whats everyone's thoughts on tipping furniture delivery guys?

I'm having stuff delivered here shortly and i realized i dont have any cash.

but then i also realized that i've never tipped furniture guys.

[cardsfansince82]

whats everyone's thoughts on tipping furniture delivery guys?

I'm having stuff delivered here shortly and i realized i dont have any cash.

but then i also realized that i've never tipped furniture guys.

I've given five or ten bucks before if they go the extra mile to set it up exactly where I want it and not [expletive] anything else up or drag mud in. If it's just one item I wouldn't feel too bad about stiffing them since you're already getting gouged on the delivery fee. If it's several items that require multiple trips to the truck you should probably give them a little something.

[jim]

I love tip culture at bars.

In college a grizzled 5 year senior taught me how to work the system. It's called "the hookup". Basically, anytime you are comp'd a drink tip half the value of the comp. For example, if you order a 8 dollar drink tip 4 bucks. When a bartender is semi-familiar with you things escalate quickly. I swear this system pretty much works at any type of establishment. My current "hookup" joint is Sepia in Chicago, which a Michelin Star'd fine dinning restaurant that serves luxe cocktails. I have dinner there and they pretty much give the bar away to me. Not to mention I always get the super premium alcohol, generous pours and "extra tastes". It's amazing.

Ah -- lightbulb just went off. A couple of weeks ago in Cancun we went to this place called the Coco Bongo (http://www.cocobongo.com.mx/coco2010/inter/main/1/). $70 per person to get in, drinks included (and it's actually worth it, one of the coolest shows I've ever seen). It's jammed packed though, and I was told to tip the waiter on the first drink to ensure he would come back. I didn't see anyone giving tips, I gave the guy a $10, and he took the bill and looked up at the sky, kissed it, did the sign of the cross, and put it in his pocket.

Wow.

Ok, so a few drinks later he's coming buy and I order a drink and I watch him for a minute navigate through the madness. I figured this had to be the hardest waiter job on the planet, if you saw what he had to do it was amazing. So when the 3rd round or whatever came back, and I gave him a $5 - not to get him to come back but simply to compensate him from what I thought his efforts were worth. I would not have fetched a drink and returned it for someone for $5. You would have had to pay me more than that.

15 minutes later, I get a free drink. I thought it was a mistake, but maybe after reading your post the guy just was paying me back or something.

We never got a hang on how tip culture worked at our resort that was all inclusive. We were told tips were not expected, but if we got good service at a restaurant and they kept bringing the wine back to fill the glasses then we kind of felt obligated. So we tipped some, not like we would in the US but a couple of bucks.

[33anda3rd]

1. Regardless, for people working at a higher volume (possibly without the volume) lower cost venue, like a pub with $5 hamburgers and $2 beers or a Mexican joint with $6 all you can eat tacos and $1 margaritas, it seems like you'd have to do a lot of business or rely on people ot tip more than 20%.

This is a get what you pay for kind of deal, tip-wise, and a hey-if-you-want-to-earn-more-you've-gotta-EARN-more kind of deal for the server. The server at the $5 burger joint does not have the knowledge of the server at the $40 entree joint. The former cannot talk to you about the difference between the $32 carafe of California pinot noir that's meh; the seamless organically-grown $43 bottle of pinot from OR; the complex $67 bottle of Austrian pinot; and the $85 bottle of pinot nero from Alto Adige and make sure you get the one that's best for you. The burger joint waitress can't do that. If (s)he could, (s)he'd be marketable to a better restaurant and could make a lot more scratch.

I know the whole [expletive] foodie culture nowadays, everyone's an expert. But really, the servers in good places are experts. They have somewhere between a billion and a trillion times more food and beverage knowledge than even the best home cooks/oenophiles. They've stood in the kitchen with the chef explaining it, then tasted it and asked questions about technique, method, ingredients so that they understand it. They've spent countless hours at wine tastings taking notes and asking brand reps and distributor's reps questions about wine and spirits. A good server is crucial to a good restaurant experience, because they can ask the right questions and give the right answers. Talking to them is like talking to a lobby concierge in a city you're un- or semi-familiar with. They'll help you have a good time. The $5 burger waitress might do that, but mostly (s)he's just bringing you food and cleaning up the table after.

Haltz is spot on on page 1 here, re margins/pricing/etc. At the place I'm partner in, if we put a 20% service charge on everything, and shared that between the kitchen staff and FOH staff like they do at some other places, I'd have a few issues:
1. payroll tax goes way up--potentially threefold. The IRS made some changes this year: auto gratuities are now a service charge. They must be reported and they are subject to payroll tax. Yeah, yeah, yeah, all money should be like this. Well, it's not. And our business model is set up for the way the world works, not the way people outside the industry think it should work (sorry, Yelpers.) We don't even put auto-grats on large tables anymore.
2. my A-grade servers, if we go to service charge, are out the door to find a job at a place where there's no service charge. They will not make as much money under a salaried system even if they're making $20/hour. The best server at our place works 4 nights/week, from roughly 4pm-11pm. 28 hours. And makes $800-$1K/week in tips. He could work more--another 50% roughly in hours, covering six nights a week--for the same $800 (except it's less because there are no cash tips hiding from Uncle Sam) or he could work the same 28 hours and make $560 instead of $800-1000. While reducing his quality of life because he has just one day off/week.
3. chef has to either jack up the prices of the food or cut corners on the quality going into the food to maintain a good food cost because of #1 above eating into profit. The customer pays more for the same or gets less for the same.
4. Also as a result of #1 above. We try to keep our wine list lean and mean, inventive with very good stuff at very good values. We mark our wine up 50% over cost--industry standard is 100%. There are a lot of reasons we sell it low, but nutshell: it's good for us. We have a growing rep as a place to get good value on a bottle of wine. I ask the servers to ask all our first-time guests how they heard about us and we frequently enough get "from a friend who said you have a good wine program." This model puts butts in seats and pushes our RevPASH up. If we were a 20% service charge resto and our payroll taxes increased two- or three-fold, that business model would go out the window and we'd lose our rep as a place in a competitive Chicago market with great wine values. We'd have to charge the same as everyone else.

[haltz]

I've always thought it would be a great idea to undercut everyone on wine if you can get away with it. Margins are great, but profits are better.

Do you guys do that across the board, or is it scaled towards the price point? Ours range from 400 to 100%, with 250 being the average probably.

[lukethedrifter]

tm, right out of the Greg Perez playbook. haltz, ask Bill about GP.