Smart SpendingSmart Spending

Sometimes a $0 tip is appropriate

A writer who used to believe that every waiter deserved at least a minimal tip explains why he's changed his tune.

By Karen Datko Feb 18, 2010 10:35AM

This post comes from Trent Hamm at partner blog The Simple Dollar.


I don’t believe in the idea of a “minimum tip.”


There, I said it. It’s a big change from my previous belief on tipping.


A few weeks ago, my family and I ate at a restaurant where the service was extremely poor. We sat for 25 minutes waiting for our server (my wife was literally putting on her coat).


After we ordered, we spied our server sitting at a table with other restaurant employees (where the server had also been while we were waiting). We did not get our drinks until after our meal arrived and we had requested them again (to our server’s annoyance).


When the plates were being served, mine was bumped on the edge of the table, knocking a portion of my food off the plate onto the floor.


Not only was my plate left there with some of the food missing, the server didn’t bother to clean up any of the dumped food. At one point, my wife attempted to get the server’s attention, and the server looked at her, pretended that she didn’t see my wife and continued to sit at the table with her friends.


Needless to say, we were not impressed. I gave a zero tip.

Afterward, one of my friends chided me for not at least giving a 10% to 15% tip. “That money is part of her salary,” he argued. My argument? You deserve to get paid if you actually do your job.

For many years, I believed that you should give at least a minimal tip to the service staff at restaurants because, in many cases, that tip is part of their expected wage from the restaurant. However, a few things soured me on this.

  • It seems really unfair to give a 15% tip to someone who isn’t even providing minimal service and then giving a 20% or 25% tip to someone busting it and doing five times the work to make your meal enjoyable. I don’t think it’s reasonable to hand out 40% to 50% tips to people who are really striving to do a good job so you can amply reward them in comparison with people not doing their job at all.
  • Some businesses collect the tips from the wait staff, skim some percentage off the top, then redistribute the tips to all employees. A small tip to an individual person doesn’t matter in this situation, as it will all be redistributed equally to everyone there. In fact, when I have received great service, I actually ask my server what the restaurant’s tipping policy is -- who gets to keep the tip? (In this situation, I’ll usually tip at the very low end of normal, then hand a small amount of cash directly to the server if the service was good.)
  • A “standardized” tipping policy ignores how the real world works. If you tip identically no matter how good the service, the people who provide poor service will believe such service is acceptable and the people who provide good service have no incentive (beyond internal drive) to keep up the great work. A standard policy rewards the bad and good equally -- and that’s a situation that doesn’t benefit either side.

In fact, I’d argue that over the long term, a standardized tipping policy makes overall service in restaurants worse over time. It tells the self-motivated people who are really good at their job that they won’t be rewarded for their self-motivation, so they’ll seek a new channel for it. Meanwhile, the people who do a poor job are quite happy to collect nice tips for their minimal effort and will stay put.


My current tipping policy is pretty simple. When I go into a restaurant, I don’t plan on giving any tip at all. Waiters earn the tip through good service. If I don’t notice the service at all, that means it was good and I tip a solid amount -- 15% to 20%. If I notice outstanding service, I go higher -- I tipped almost 40% recently. If the service is poor enough that it begins to detract from the experience, I’m simply not going to tip well at all -- 5% to 10%. If the service is poor enough that it makes the meal miserable, I will not give a penny. Obviously, I’ll make some exceptions to this, particularly if the server is new.


Honestly, I don’t care whether the tip is part of the person’s wage or not. In fact, if it is a part of that person’s wage, I view that as a strong argument for my tipping policy, as it rewards extra effort and doesn’t reward poor effort at all.


Just like real life.


What’s your tipping policy? Why?


Related reading at The Simple Dollar:

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.