What Is Your Tipping Policy?

Most people have some fairly steadfast rules regarding the amount of tip they’re willing to leave.  It’s customary to tip for good customer service here in Canada, although it seems like we need some clarity around what level of service we expect versus the amount we’re willing to tip.

I’ve heard that some people have a tipping policy to tip according to the level of service they receive; 15-20% for excellent service, 10-15% for good service and 0-10% for terrible service.  What kills me is that people will actually stiff the server and leave nothing for what they consider to be bad service.  What do they hope to accomplish by doing this?

Tipping Etiquette

If you’re going out for lunch or dinner you should be prepared to tack on an extra 15-20% to the final bill.  In fact, you should be paying this much for any number of services, from a haircut or visit to the spa, to taxi or concierge service.  Anything less is just being cheap, no matter how you justify it to yourself based on the level of service.

In the restaurant industry, servers are required to pay income tax on their tips.  But since it’s difficult to audit tips, Revenue Canada wants you to claim 10% of your total sales for the year.  When you consider that the average tip is probably close to 10%, and then you factor in the host, cooks, dishwasher and busboy getting a portion of each tip, the server is probably not making as much as he’s required to claim.

That’s no excuse for poor service, but it’s one of the reasons why I always tip 15-20% regardless of the service I receive.  Maybe my expectations are low to begin with, but the service at most restaurants these days is fairly mediocre.  Sometimes the level of service is so bad, it’s actually quite comical.  But when you go out to the Olive Garden, are you really expecting Cirque du Soleil?

A Matter Of Principle?

I accept that I need to add a tip to my restaurant bill, regardless of the service.  I just wish it was built into the overall price.  Maybe that would take away from the subjective nature of having to decide on the tip amount based on how many times my coffee was re-filled.

Some people I’ve talked to seem to take pride in the fact that they didn’t leave a tip after a bad experience at a restaurant.  They must think they are teaching the server a valuable lesson and that somehow they’ll get the message and change their behaviour.

Unfortunately, based on my experience in the restaurant industry, nearly every server will just think you’re a cheap jerk for stiffing them on the tip.  The server’s not taking anything away from your not-so-subtle message other than being pissed off that he wasted an hour of his time looking after you.

I know that for most people, their tipping etiquette is a matter of principle.  How dare we be forced to tip 15-20% for poor service?  But instead of leaving a small tip or no tip at all, just pay the going rate and then consider these options:

  • Ask to speak to the manager before paying the bill.  Often times just voicing your concerns about the quality of service will get you a discount off your bill.
  • Pay your bill (including tip) and then speak to the manager afterwards, either while you’re still in the restaurant or maybe through an online survey.  You’ll likely receive some type of incentive to return, saving you money on your next meal.
  • Vote with your feet and don’t come back to that restaurant again, while telling everyone you know about the lousy service you received.

The bottom line is that if you receive bad service it likely has more to do with the business and lack of training than it is about the individual.  Instead of punishing the individual with your lack of a tip, engage the business owner or manager and help them fix the problem, or if you’re really upset than help spread the word about their poor customer service.

What is your tipping policy?  Do you try and send a message with your tip after receiving good or bad service? How about holiday tipping, should it be higher?

Written by Robb Engen

Robb Engen writes about Canadian personal finance at Boomer & Echo. Together with his mom, (she’s the Boomer, he’s the Echo) they offer their own unique perspectives on saving, investing and personal finance.

19 Responses to What Is Your Tipping Policy?

  1. I think it is absurd to tip for bad service. You can absolutely tell the difference between a rude server or one that doesn’t give a sh!t and one with a lack of training. Tipping is a way of compensating someone for going above and beyond for the customer, it is too bad that society tells us just to blindly tip everyone so that we are even tipping people at drive thru windows and coffee shops.

    I don’t understand this post’s argument to tip for bad service at all, I think that the bad server would change their ways pretty quick if they did not get a tip for an entire month. Either that, or they seek new employment, giving someone more deserving a shot at my tip. By your logic, we will just tip them anyways and compound the problem.

    • +1.

      I don’t tip for crappy service. If a tip is to reward good service then it should be discretionary. Tipping irrespective of service quality to me is akin to a service charge. I used to live in England and a lot of restaurants automatically add a 20% ‘service charge’ to the bill to cover servers. However, its still discretionary and there were instances of such awful service that I did not pay that 20%. And if service was amazing I might add a bit more on top to ‘tip’ the server.

  2. Having worked as a server in the past, I have to emphasize that you should absolutely speak to the manager regarding poor service. It could be any number of factors affecting food and drink times, and chances are they already know they’re behind pace on some of these things. They will make it right, whether it be by discounting your meal or giving you perks for the next time you come in. If you don’t talk to them, they don’t know, and the server has a lower amount to tip out at the end of the night. Talk to a manager – they might not even know there’s a problem.

    Personally, I tip a minimum of 15% for good service. If someone goes above and beyond their job description, I’ll tip 20-25%. I only tip 10% if I’m really disappointed in the service (and after I’ve spoken with someone about it).

  3. I’m not opposed to tipping but the level of expectation for tips has gotten out of control in my opinion. Tips are supposed to be gratuities for services rendered and when circumstances are such that someone is just flying through the motions then I do not believe that a tip is justified. Consider a $50 meal at a restaurant for 2 people. The customary tip is 10-15% which could be about $7.50. Now an average meal may take about an hour to eat and how much time during that hour will that person devote to your table and preparation of the meal? 5 minutes, 10 minutes, 20 minutes? Either way, they are getting an extra $7.50 for that hour that you are at the restaurant and that is ON TOP OF their normal wage. For some places where wages are reduced by tip amounts or because of the possibility of giving tips this makes sense but for someone who is earning at least minimum wage and serving say 3 tables at a time (I randomly came up with that number and have no idea how many tables a server would normally serve at a time but I think that 3 is a low estimate), they could be making over $30 an hour.

    I think it’s ridiculous to be paid that much money to serve food to people. Now I realize that there are many people who complain and are a real pain to deal with but should most people be forced by society to contribute to someones wage who earns more than 3 times the minimum wage?

    Another issue I have with tipping is where do you draw the line. Sure it’s standard custom to tip your server and your taxi driver and your hair dresser, but what about the person who helps you at Canadian Tire, or the sales associate at the clothing store, or the clerk at the movie store who recommends a movie. These people are providing a service just as the others but no one ever thinks twice about giving these people a tip.

    Sorry for the half rant, this is an issue that has always irked me with society. As I said however, it’s not that I’m against tipping, and in fact if someone goes above and beyond their normal job duties I am only happy to compensate them. I just loathe paying someone that much extra money when they are visibly disinterested in their work and do not pay the least bit of attention to whether I am receiving a proper level of service.

    • I thought i don’t understand tips policy because i am not originaly from Canada…I absolutly agree with Colin about people working in other industries. I work for medium private company and all our customers thankful for how i do my best to make impossible possible for them. They always tell me about it, But nobody thinks they need to tip me or i never thought i need to ask customers for it… Where this tips policy came from? Maybe if i know history of it i’ll reconsider my opinion… Meantime i give tips then i fill a bit of attention from person. I don’t want to give a tips to person who only took my order and brought a bill, or hair dresser who has several people in a line and pay no attention to your needs and so on… i do tip but than i feel to do so…

  4. You’re right there is no reason to accept bad service. I have no trouble tipping for what is reasonable, but I think tipping has become the norm. I have started to see tip jars (cups) at fast food restaurants.

  5. I guess tips are not really based on the merit system. But I know people tend to use tip based on how good of service they receive. I can relate to these people too because it is difficult to give a big tip when you know you have received a bad service and stress. What is the biggest tip you have given in a restaurant. Many years ago, I once gave $60 tip after $300 meal for 4. I still can’t believe I spent $360 on a dinner.

  6. I agree with Colin whole-heartedly. Couldn’t have said it any better.

    I peak my tips at 10% in most cases as I usually eat in busy restaurants where the servers must have at least 3-4 tables at a time. I can’t justify giving them that much money for taking an order and then delivering it while periodically checking for refills.

    That being said, I will tip less to rude service or to a server who is never around. I also would tip more for excellent service or if the waitress is especially cute ;-) I VERY rarely leave no tip at all. I also try to eat out as little as possible as I am cheap and can buy a lot of groceries for the amount of 1 meal out for the family.

  7. Wow, this subject has been written about a lot lately (must be the 3rd or 4th time I’ve read a blog post on it in the past couple of months)

    I can’t say I agree with the give the full tip all the time mentality. Since when has the tip lost its discretionary nature? What’s with all the peer pressure?

    Servers in Canada at least get paid minimum wage, unlike in some other parts of the world!

    It’s rare that I lower my tip from the 13-15% range, but I don’t think I should feel guilty for doing so if the service was bad!

    Leave a note along with the poor tip to make sure the message gets across that the service was bad if you don’t think the lowered tip accomplishes that on its own!

    This topic frustrates me!

  8. T.I.P.S = To Insure Prompt Service
    Also hopefully pleasant service and good food.
    The idea that we are “obliged” to tip is rediculous.
    15% for lousy service or lousy food??? Come on!
    Lousy food merits a comment to the staff that you are not going to eat it or pay for it.
    Lousy service merits a lousy tip or no tip and a comment to them as to why. If they are that bad you had probably better have everything ready so you can run (after paying the bill).
    I am in sales. None of my clients tip me for giving them good and timely service (I am not on commission either).
    If I rent a hotel room I expect it to be clean and comfortable. That should be the hotel policy, not a whim of the service staff. Can’t get good help for your establishemnt? Maybe pay them more and tell them what you expect of them and if they go above and beyond the call of duty (not DSK style) then hotel management should reward them for helping to maintain the establishment’s customer rating.
    A smile and a “can I help you” is much better than a “what do you want”

  9. First it started at 10% then 15% and now 18% to 20%. And in some restaurants it’s no longer discretionary and is added to the bill. It’s why we as a couple have drastically cut back on eating out. Something is wrong when a waiter can bank their wages and live off their tips. No one tips me for doing my service job!

  10. I am a 18 to 20% guy….but what I find more interesting is the amount of places that ask for tips now!

    If you want more money to pour my coffee then charge me!

  11. Although I have absolutely no problem tipping handsomely, I do have a problem if the service / food sucks.

    Tipping used to be a ‘bonus’ not an expectation… and while I realize it’s become the norm these days…I also feel its gotten out of hand.

    We are in essence paying the restaurants staff wages… and that wasn’t the way it was supposed to pan out!

    Jayne

  12. First, My Restaurant Policy:

    I personally see most dining experiences as an opportunity for assessment of food AND service.
    Ruling out where to be a regular and where not to. I Budget for regular dining and experiment with some place new once per week.

    If you are a regular you should try tipping 20-30%.
    This translates to VIP service in terms of priority seating, comped drinks, appetizers, and permanent discounts. The 20-30% tip translates to big returns in terms of a far better experience for the value in the long run.

    If you have not built a proper tipping percentage into your budget, then it’s your loss.

    If you have poor service, use some basic communication skill and speak to server/manager etc.

    Business/Industry people understand what goes around comes around. Investing in relationships and building reputation and rapport when going out to dine.

    Cheap people are just cheap and will always pay the sticker price. I suggest “Cheapo’s” stick to fast food or take out since they are so transactional in their thinking and probably don’t take any interest in their host servers/managers etc.

    If a restaurant is not a good fit that’s just life.
    If a server has a personality issue then address it professionally. And remember “NO TIP” sends a better message than scaling your tip down(Just means your cheap). So do it big or not at all.

    Love it or hate it! :)

  13. I work part time as a server and I have to say people are incredibly cheap. If I have given bad service because I am super busy then I don’t expect much, if anything..fair enough. But even when I am on the ball and am being super attentive I am getting on average 10% or less. The ones who tip the lowest are usually the ones who let their kids leave a huge mess on the floor or for a table of 10, have you one by one fill drinks instead of asking you at the same time, meaning you are even less attentive to your other tables. We try and be reasonable and understand that for some people this dining out may be their one luxury in this bad economy and can’t afford to tip much but when the entire shift is like that…it comes down to people being cheap. And please bear in mind, we have to tip out so if you don’t leave a tip I actually end up paying for a part of your meal so I end up with less money.

    • I would like to remind people that in Ontario, servers get “minimum wage” but a server’s legal minimum wage is $8.90/h, not $10.25/h. That situation is very common. So although we are not “obliged” to tip, the government expects us to by not paying servers proper wages. You may not agree but it’s not fair to penalize the servers. Yes they might be able to find more work but someone needs to do it or you’ll be cooking your own meals or going to take out joints.

    • I am from Australia, where tipping does not occur. You said ” have you one by one fill drinks instead of asking you at the same time”, do you receive no training in Canada ? It is very very poor service (in Australia) for a customer to ever have to ask for a refill. The waitperson should be observing this and asking immediately if required or automatically filling the water without asking.

  14. Well I simply cannot agree with a 15% or even 20% tipping policy! Here is why; say you buy just a sandwich and soda for 10-15$, then I would leave about 2-3$ (20%) tip. Say I go to a fancy restaurant with my wife and the bill comes to 120$, including a 40$ bottle of wine. I would typically leave about 10% (on total before taxes), sometimes more (if I was very pleased with the service) and sometimes less (if displeased). I am a retired Professional Engineer having worked more than 35 years after completing a graduate degree and even at the top of my career had every trouble making 50$/hour (as a senior associate of a large consulting engineering firm). Even at a zero wage from the employer, a server working a 1.5 hour sitting of only 3 customers (tables), spending 120$ would make 54$ in tips or 36$/hour at 15% tip (plus any employer wages). I consider this excessive given that the average national wage (all industries combined) is about 23$/hour! I am certainly not here to subsidize or compensate my server given his particular financial situation and I leave this up to governments (via student bursaries, loans, unemployment etc.), government that taxes me heavily on my revenues whereas often tips go undeclared and untaxed. Also I do not see why I would tip somebody 15% or 20% on a 250$ bottle of wine as the service or effort required is not going to be substantially different. I consider this tipping policy an industry/employer fabrication to entice people to join their ranks (case in point: cruise ships) and many times I have suffered from very poor service given the long waits because the kitchen was lagging. Yes this is indirectly the server’s responsibility as he is the restaurants representative/intermediary and will have to suffer his employer’s inadequacies. Lastly and not least in the present economic situation we try to support the restaurant industry by visiting their restaurants (which is not the case any more for many). Yes we enjoy the visit and in return the restaurant owner/server profit (win/win situation), but we will not make up the 20% plus in industry activity decline by paying excessive tips and occasionally even suffering bad overall service because of cutbacks. And that is the way I see it.

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