Many people are searching for sensible answers when it comes to the subject of tipping etiquette. Since this is a personal finance website, I’m sure you click on this article expecting to see a list of reasons why we should tip; or at the very least, a list of suggested tips by profession. Sorry to disappoint you, but I am just asking a question that I have wondered since I was a kid.

Tipping Etiquette Gone Wild

A Meal to Remember:

During our honeymoon in Mexico a few years ago (wow, it’s been about 5 years – where does the time go?) my wife and I were attacked by a two-man Mariachi band (accordion and bass) at a restaurant. They were going around to the tables singing and playing badly. Eventually, they made their way to our table and began to sing and play badly (did you think they were going to improve by the time they got to us?). photo credit: Foxtongue

We pretty much ignored them and figured that they were the best that the restaurant could afford to hire. Once they were finished, we expected them to move on to the next victim table, but instead the leader stopped and looked at me and said, “WE PLAY FOR TEEPS!”  😯 (that’s “tips” for all of you non-Mariachi speakers – for those who don’t know me, I like to imitate people occasionally) and held out his hand.

I can’t remember exactly what I gave him, but I’m sure it was the lowest denomination that Mexico has ever seen (based on my memory of the look of disgust that was on his face)! I guess I wasn’t following proper tipping etiquette.

Why Does Tipping Etiquette Force Us To Reward Bad Service?

Because the restaurant was too cheap to pay this “band” a living wage, and they had to survive on teeps! Why does tipping etiquette force us to pay certain service providers tips? I mean, I’m used to hearing all of the common reasons, such as:

• Many waiters earn less than the minimum wage, and a large part of their income is derived from tips.
• A waiter may be required to tip other coworkers (bartenders, busboys, etc), regardless of if they receive a tip.
• To show gratitude for good or great service.
• To encourage the employee to continue their good service.
• Hairdressers and barbers rent their booths/chairs.
• The cab driver got you to your destination in one piece.
• Blah, blah, blah Etc, etc, etc

So…even after hearing those arguments, I still have the same question. Why am I expected to pay someone a tip? Why am I expected to supplement a cheap employer who pays their workers $4/hr, and then forces that employee to supplement their underpaid coworkers? Why should I pay extra because someone does their job? Shouldn’t someone work hard for the pay that they agreed to?

Tipping Etiquette Helps To Supplement Low Wages?

If it’s a matter of supplementing a low income, there is a much better way to handle this. The employer can just pay a fair wage to all workers and, IF NECESSARY, charge a slightly higher price for their product/service. A restaurant should not expect their customers to pay a fair price for their meal & service, and then pay a 15 – 20% surcharge because they (the restaurant) are too cheap to pay a living wage to the waiters!

The argument about rewarding/assuring good service falls short in my mind as well. A paying customer should receive good service automatically. Good service should not be a reward for a high tip, nor should terrible service be the punishment for a low one. And if it is truly about “gratuity” then it shouldn’t be automatically included with any meals – and you certainly shouldn’t be arrested for not paying a tip!!!

It’s to the point now where a waiter will give terrible service, and the customers are still discussing how much of a tip to leave! This is insane! Most people pay tips out of guilt – we know that it is an expectation and we feel like cheap jerks if we don’t!

The customer is already paying for the good or service and will many times reward good service with repeat business. If I enjoy the food at a particular restaurant, or the cleanliness and service of a hotel, then I will make it a point to visit that establishment as often as my budget allows.

A Better Alternative To Tipping Etiquette

I believe that the employer should just pay a fair wage to their employees. I also believe that great service is rewarded by both a positive report to the manager/owner (so that the employee benefits) and repeat business (so that the owner benefits). This way the employee earns real money and also has the opportunity for raises, bonuses and promotions – based on all of the good reports from satisfied customers.

Also, the business would have a repeat customer that is glad to spend their money in their establishment – because they are satisfied with the product and level of service. This sounds like a win-win situation to me!

Before I get a ton of angry comments and emails, let me explain a few things:

• I DO pay tips for good service.
• I pay EXCELLENT tips for excellent service. I have paid tips of between 75 and 100% on a number of occasions (usually on smaller bills, of course).
• While I believe that waiters should be paid a fair wage, I realize that it is not their fault that our current system is illogical.
• My tips are based solely on service – I DO NOT CARE that a waiter is underpaid – bad service = NO TIP!!!

So after thinking this matter over, I still don’t like the idea of tips and I think there is a better way!

photo credit: bradleygee

Reader Questions:

1. What are your feelings about tipping etiquette?
2. Would you be willing to pay a little more for the service so that the employees can be paid a fair wage?
3. If you are in the service industry, do you treat customers better when they tip?