How Much Should I Leave For A Tip?

Even though I have workaholic issues, I did manage to do a few fun things with my family over the holidays.   We caught some movies, saw an Atlanta Hawks basketball game, went to the Peach Drop, and most certainly managed to eat out at some local restaurants.    Every once in a while, I’m just befuddled on how we got to where we got to in America.   There are large issues politically and financially that are facing us, but it just wouldn’t be a smart money moves column if I didn’t gripe just a little bit about the whole notion of ‘gratuity added’ on my bill at the restaurant.

First off, let’s remind everyone just what the word ‘tip’ means as it pertains to leaving extra money at the end of a meal at a restaurant.  Dictionary.com defines tip as a small present of money given directly to someone for performing a service or task.   In most countries, tipping is not mandatory but is common that people will do this when they receive exceptional service.  In the United States today, we’ve almost made tipping an expectation.   It used to be in the 1980’s that about 10% was the norm for a tip and today it is almost expected that it is in the 20% range.    A ‘tip’ is truly supposed to be bigger when you received superior service and smaller when you receive inferior service.    Most waiters and waitresses just expect the tip no matter what their level of service is at the meal.

The thing that really got under my skin over the holidays is that most restaurants will put something on the menu that says gratuity will be added for parties of more than a certain amount.   This means parties of 8, 10, 12, or some larger amount of patrons so you don’t have a big group of people who stiff the servers at the end of the evening.  Somehow restaurants have now set that rate at 18% or 20%, and they are so kind to add an insulting line of ‘additional tip’ just in case we are too dumb to realize a tip was left already.  Or maybe that we are too drunk and will just put a number because we feel guilty that the line is left blank.    My family ate at a local restaurant in the Perimeter in Atlanta over the holidays that now put big parties at 5 or more.  Yes, 5 or more.  This essentially means that unless you are a party of 4 or less, you are guaranteed to pay 18% gratuity even if the service is horrible.    This all flies in the face of tipping as the service we got that day was less than stellar, but I had no choice but to pay the bill.

Even takeout Chinese restaurants leave you a tip line when you pick up your order.    If the guilt impulse hits you when you go for that pick up, you’ll likely write $2 or $3 just because you don’t want to feel like a cheapskate.   It’s just too much for me that everybody has a tip angle today.  You might as well get a bell and a Salvation Army bucket.

I think no matter what the guidelines say about what’s proper, you should leave the small present of money for your server based upon how good you think the service was at the meal.  If it was great, you could leave more than 20% and if it was terrible than you need to leave a tip to let your server know that the experience was less than acceptable.

Written by:

Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®

Co-CEO and Founder of oXYGen Financial, Inc

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About the author  ⁄ Ted Jenkin @ Your Smart Money Moves

Ted Jenkin @ Your Smart Money Moves

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3 Comments

  • Chase
    January 12, 2012

    This is a hot button issue so I’ll try to be brief (we’ll see if I succeed):

    Tipping is required in the US because states allow restaurants to lower minimum wage for tipped employees to $2.13/hr. This rate has not changed in the 10+ years I’ve been in food service. It grossly undervalues the employee and puts the responsibility of the guest to pay their wage. It is ridiculous that companies can do that – but in foreign countries the prices are inflated in order for the companies to pay their staff a wage that will allow them to make a living without tips. If tipping wasn’t customary in the US then your bill would automatically be higher, whether it be a service charge or just inflated food costs. It’s a push and pull and I honestly can’t say what I’d prefer – I make more money in tips than a restaurant could probably afford hourly – but I do hate needing the charity of others in order to pay my mortgage and keep my lights on.

    I’ve got over a decade of experience so I fancy myself as a waiter who should average 20% as I pride myself on giving stellar service. Sure, sometimes I miss and have my off days, but more than not I go above and beyond what normal people would expect when they pay 20%. However the days I’m off I get less than that (at times nothing) yet the days I give the best service of my life the number rarely goes above 20%. Guests often overlook rewarding great service but never forget to punish poor service, even if it’s minimal or not the servers fault. I think when discussing the guilt regarding what tip you left it’s important to point out that as much as you lower the tip for bad service you should equal be rewarding good service.

    Lastly – you should never feel compelled to tip, even if it’s added to your bill. I struggle over it as a restaurant employee because I feel I should OVER tip because I understand or want good karma. While I won’t leave without some tip I don’t leave a normal tip if the service isn’t good. I’m infinitely patient and understanding so it takes a lot for me to lower a tip, but at the same rate you have to blow me away to get a significant amount more. In the case of tip being added to your check – if you disagree with the amount politely ask for the manager and explain to him that you didn’t feel the server deserved a tip of that amount. Any manager/restaurant worth their salt will remove the tip to show their appreciation of your patronage and assure a return visit – and this also allows them to discuss the situation with the server and hopefully coach them in to a better employee that will then be better for it (or help the restaurant as a whole and get rid of someone who is sub-par).

    I feel like I’ve heard every side of the tipping argument and have sympathies all around – but it’s a government sanctioned practice. If you don’t like tipping you have two choices – don’t tip or harshly judge when tipping and the server suffers (and nothing changes), or work to change the standard through your local representatives for a fairer pay scale for tipped employees. I know which will happen as it takes far too much effort to change something like this and it would affect the bottom line of large and small companies who would fight against it, but I like to dream that some day it might be a little better for everyone involved – guest and server.