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Monday, October 13, 2008

Checks and Balances in Tipping

Posted By on Mon, Oct 13, 2008 at 8:48 PM

click to enlarge tipping.jpg

This week's New York Times Magazine has an interesting story by Paul Wachter about tipping at restaurants, and focuses on one San Diego restaurant, the Linkery, where tipping is not allowed.

Rather, a service charge of 18% is added to the bill and shared by all the staff. The intent is to eliminate the wrangling among the wait staff over choice shifts and more promising tables and to address the pay disparity for the rest of the staff who didn't previously share in the tips. The Linkery explains this policy in some detail on its Web site.

The article also explores this twist:

"Economists have struggled to explain tipping. Why tip at all, since the bill is presented at the end of a meal and can’t retroactively improve service? And certainly there’s no reason to tip at a restaurant you will never revisit. 'Using a rational and selfish agent to explain tipping, one reaches the conclusion that the agent should never tip if he does not intend to visit the establishment again,' Ofer Azar, the economist, writes. 'Yet this prediction is sharply violated in practice: most people tip even when they do not intend to ever come back.'”

This resonated with me, because I tend to tip at least 20%, even when service is embarrassingly bad. I appreciate the school of thought that says I should not, that it rewards poor service and keeps someone in the job who might do better in another line of work.

But I think it really has something to do with knowing there are expectations on me as a restaurant customer as well. So even if the waiter is doing a poor job, I'm going to keep up my end of the deal and pay people. Economists, managers, trainers, etc. could easily explain why this is a backward approach, and I credit that is it, but even on the rare occasions when service seems flat-out mean-spirited, I find myself doubling the bill's total and moving the decimal point. I might never return, but no one can claim I stiffed them.

If anyone has more rational rules for themselves in these situations, or perhaps can explain this compulsion to short circuit what should be the checks and balances in the tipping system, I'd love to see them in comments below.


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