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Is 25% the new 20% for tips?


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NY Post (via Eater) discusses the rise in average tips past 20%. In many restaurants, 25% has become the expected tip, and 30% isn't far off, the paper says...

 

Michael Lynn, a professor of consumer behavior at Cornell University’s School of Hotel Administration who studies tipping, keeps tabs on the way expected gratuities trend upward over time. An obvious example is the slow shift that’s brought the 20 percent restaurant tip from a generous outlier to the expected standard.

 

Lynn recently studied some 9,000 credit card receipts from a restaurant in Poughkeepsie, NY, and found that more than a third of customers — 37 percent — left a tip greater than 20 percent, suggesting that the journey northward from that standard is already in progress.

 

This squares with what Dublanica says he’s been hearing from waiters of late: “In Manhattan, when I talk to waiters they tell me, ‘No, we want 25 percent now.’ I don’t know how often they’re getting it, but within the past couple years, I’ve heard that mumbled.”

 

Read more: http://www.nypost.com/p/entertainment/food/tipping_the_scales_7miRf5GE1QGH63gDe6FaVO#ixzz26wGEIt19

 

 

I'm not sure I'd base a major national trend on 9,000 transactions in Poughkeepsie, though. Nice town, but probably not enough on which to base a national trend...

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Lynn recently studied some 9,000 credit card receipts from a restaurant in Poughkeepsie, NY, and found that more than a third of customers — 37 percent — left a tip greater than 20 percent, suggesting that the journey northward from that standard is already in progress.

An interesting factoid that researcher extraordinaire Lynn didn't mention is that the restaurant in question offers a Recession Buster Special for $16.50, taxes included. My understanding is that 37% of their customers order this special. You do the math !

 

 

“In Manhattan, when I talk to waiters they tell me, ‘No, we want 25 percent now.’

Great. Very useful info about what waiters want. Hey, dude-who-talked-to-those-waiters, here's an equally useful quote that you can use from Chambo in any future article: "No, those government transfer payments are not enough for me, I want Bill Gates Carlos Slim's bank account now."

 

Who gives a hoot what they want. Another interesting factoid that will come out shortly is that guy who is talking to those waiters received a Ben Franklin from the Waiters Association of Manhattan to plant that 25% seed in the minds of insecure, status-conscious, well-to-do Manhattanites.

 

Why don't we save everybody a whole lotta time and just agree that a fair tip is 100% (possibly 50% subsidized by the government?). It would make calculating the tip so so much easier.

 

All in favor, say aye.

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Silly question: When you (or they) figure a tip, is it on the total check, or check before tax?

 

Or, does no one even care?

 

I usually calculate it before tax. Although I've noticed some of the "suggested amounts" printed on the preiminary receipt use the post tax number for the computation base

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Most servers expect tips based on post-tax amounts (no surprise there).

 

My base tip is 15% pre-tax (minimum wage is $10/hour where I live and there's no tipping wage), but for an overall excellent dining experience, I round up from 20% post-tax. No way in hell am I ever tipping 25%.

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1. Silly question:

 

2. When you (or they) figure a tip, is it on the total check, or check before tax?

 

3. Or, does no one even care?

1. No such thing.

 

2. Depends on the weather and whether there's a full moon or not ... and if it's high or low tide, of course.

 

3. Who cares ! The extra 20% tip on the incremental 8.xx% NYC tax would add a whopping < 2% to the total bill amount.

 

 

Okay, once and for all to completely put this tipping question to rest forever, Prof Chambo is going to share with you some of his patented techniques and some of his copyrighted material from his Harvard MBA second-year course entitled :

 

Tipping in America for Beginners and Sophisticates Alike (of All Income Categories)

 

 

Chapter 1 : Tipping Techniques for Those Not Yet in the 1% (ie you are still enrolled here or very recently graduated)

 

a. Determine the grand total of the bill, taxes included.

b. Move the decimal point one position to the left.

c. Double that number and round up to the nearest integer.

d. Leave that as your tip. Adjust slightly down if you are a cheapskate.

e. Assuming no adjustment above, swagger out the door knowing full well that you unnecessarily tipped on post-tax amount *

 

* Don't feel bad about this. An ensuing course by Prof Chambo will show you how to keep your marginal income tax rates well below 15% while simultaneously making the big bucks ! (Mitt usually finds the time to guest lecture one of my sessions !!)

 

Example 1: Check $124.23 => $12.423 => $24.846 ... $25.

Example 2: Check $38.50 => $3.85 => $7.70 ... $8.

Example 3: Check $16.50 => STOP STOP STOP ! You are an aspiring 1%-er ! You don't order cheap crap anymore. Start visualizing yourself as and acting like a 1%-er now (even if you have to go into massive debt) or you'll never get there !

 

 

Chapter 2 : Tipping Techniques for the 1% (ie you graduated more than 12 months ago)

 

a. Determine the grand total of the bill, taxes included. If lighting is poor, feel free to use your titanium LED-laser-powered pocket flashlight.

b. Move the decimal point one position to the left.

c. Double that number and round up to the nearest 100.

d. Assuming reasonable service, leave that as your tip. For good service, add 100. For larger bills, be generous.

e. Swagger out the door because that's just the way masters-of-the-universe like you always walk.

 

Appendix A : Short-cut Tipping Chart for the 1% (because you got more important things to be thinking about than calculating tips ... like running industries ... or lowering your marginal income tax rates ...)

 

Grand Total Amt .. Tip .. Tip for good service (or for the 0.1%-ers)

Less than $500 ... $100 . $200

$500 - $1,000 .... $200 . $300

$1000 - $1,500 ... $300 . $400

Above $1,500 ..... Tip = Grand Total Amt rounded up to the nearest 1000.

 

 

Research by the Center for American Progress has estimated that this course continues to increase the GDP of this nation by MORE THAN the Fed's QE2 and QE3 combined !

 

By freeing our most productive citizens from the complexity and drudgery (and time!) of calculating tips at restaurants, their minds are thereby freed up and unleashed to have those unexpected creative insights and conjure up those big ideas that power the American economy forward.

 

Our nation owes Prof Chambo a debt of gratitude for formulating and sharing such novel and productivity-enhancing techniques with our nation ... or more importantly with the top 1% who we all know do all the heavy lifting around here so that the rest of us victims can comfortably coast.

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Since I don't regularly eat at your fancy-pants restaurants, the difference between 15%, 20% and 25% is usually just a few dollars. I toss a few bones to the working class. Especially if I saw them straining to lift my 32oz Coca-cola. They probably don't have health care to fix the wrist ligaments that will soon rupture.

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Speaking of cola, my main gripe with inflated tips is applying them to beverages -- or more specifically, in New York, applying 20% (or more) to the mark-up on the beverages.

 

Paying $90 for a $30 wine is bad enough, but it's actually $108 with 20 percent tip.

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