Posted On: Tuesday - April 18th 2023 7:20PM MST
In Topics: Salesmen Economics Inflation Customer Care
(Thanks to Adam Smith for the appropriate image!)
This series of posts, as it will work out to few related posts, was suggested by commenter E.H. Hail, he of the Hail to You blog - yes, the very same. His discussion, along with that of other commenters*, has pretty much delineated most of the points we'll cover.
Unless you are in some seriously foreign country, and I'm not ruling that out here, you're familiar with the custom of voluntarily tipping above the given price for some services. Which services those are for which employees generally expect tip varies widely, but if anything the roster of them has been expanding. I ought to explain just a little for those possible very-foreign readers because, tipping really isn't done generally in some countries, one of the big ones being China. This should not cause anyone consternation unless there is confusion due to this "China" being in New York City. Our humorous story on that appears here: Tips for Chinatown.
Anyway, most readers may want to skip: The idea is to give a particular service employee** - usually we think of waiter and waitresses - a small but not embarrassingly insignificant fee that we as customers decide is appropriate for good or at least not poor service. It can be a good incentive, and to me is very free-marketey. This fee is thought of as a percentage of the service paid for, usually in the 10-15% range, but the norm for different types of services varies. (For some, like service by a cashier at a store, I have never been used to tipping for and don't plan on it. Others have and do, I suppose.)
Mr. Hail suggested looking into inflation in tipping, knowing that Inflation is one of Peak Stupidity's topic keys and sub-fixations. Yes, well, this is interesting. However, I would expect survey data from neither tippers nor tippees to be of any use. The subject is subjective in that customers may think more of their generosity than is actually the case, and service employees may or may not have good attitudes about the whole thing leading to erroneous or purposefully false answers. As for long-term customer and long-term service employees, memories can be prone to error too.
One thing to put out here at the beginning is that whatever inflation may be, equal percentage tips are obviously keeping up with inflation in the service price. That doesn't mean that some waitress can afford what she could at a similar job 20 years ago, before inflation cranked back up. Tipping at 15% now vs then on meals that cost twice as much is keeping up by the customer.
I did do a couple of searches on tipping, and the blurbs of multiple articles discussed customers bitching about "standard" tips being too high due to inflation having caused the meal prices to be too high. Well, customers, how far do you think that waitress' tip on that Applebees $15 salad that was $8 in 2003 goes now compared to 20 years ago? It may hurt based on your memory of the worth of a dollar, but it's not more in real dollars for that waitress. Yes, creating currency out of thin air lowers the value of that currency. Who knew?! Don't live like you're middle class if you're simply not anymore. Instead of bitching to me, bitch to the FED or its customers.
However, as Mr. Hail mentioned first, there is now newer pressure to increase one's tipping RATE. That pressure comes for modern electronics, in the guise of making things "easier" for us. Easier? Truly, for those who understand that Cash is King and don't relish giving governments more money, it makes things just a bit harder That aside, I think this is not about ease but about pressure. Those electronic tablets that waitresses might bring around or that appear in one's face at the cashier's counter put one on the spot. The thing is right in your face, and the waitress/cashier can see just where you touched the screen. What if the waitress really was worthless and bitchy? It happens on occasion. Punching a low number - if it even allows one to - on the screen is like telling her that to her face. It was better the old way (as about everything was!).
I saw this recently when dropping by to take a pizza pie out from the restaurant. "Pick one here." Now, I had to explain that I'm not used to tipping cashiers, because it doesn't make so much sense... TO THE CASHIER. That's no fun.
That is a segue into another thing that one could say is a type of inflation in tipping. That is, it seems tips are "encouraged", to say the least, for services for which tipping didn't used to be the practice. Those big jars on counters at various stores didn't used to be there.
Mr. Hail brought up a 3rd factor, which is the increase in tip amount with the electronics in use (doesn't apply to cash tipping) due to calculations that multiply tip % by the bottom line. Here's his point and example, verbatim:
I noticed, this weekend, that the Tipping Recommendation screen at these places often calculate tip-percentages based on after-tax, after any service-fee prices. That itself is a subtle form of Tipping Inflation. "Tipping" was traditionally done on the base-price, before tax or any other fees.Good point, Mr. Hail. I wonder if perhaps a credit card fee, if used***, would be part of that final amount upon which the tip is based. Ker-ching!
Here is a common scenario:
A product or service is listed at $20. That price seems like a good price to you, and you're not thinking too much about it. Taxes add 10%. A mandatory service-fee adds a flat $3 fee to the total.
There you are, the customer, having seen the $20 base-price, not thinking too hard about numbers, and of cheerful goodwill to all. A screen prompts you to "tip." It gives you a 15% option and higher options. How much is the "15%"? It would seem like it'd be $3.00 ($20*.15). Actually it is suggesting you add $3.75, a 15% on the grand total after tax and fees ($20+$2+$3=25; $25*.15). Not looking too closely, you press the 15% button.
The final grand-grand total you pay, on the $20-listed thing, is $27.75. That after choosing the "15% tip" button while someone glares at you. The $3.60 actually-extracted "tip" is --19%-- when compared to be the base-price (the $3.75 extracted-tip over the $20 listed-base-price = 18.75%), not the --15%-- you thought you were paying.
One more theory of inflation in tipping from Mr. Hail:
Theory: Virtue-Signaling is an arms race, and that arms race in part defines Wokeness or the social power of Wokeness. As the custom of tipping is also a kind of virtue-signal, the advance of Wokeness may also have --directly-- affected "tipping" rates, boosting a around-10% "round-up"-type tipping custom of earlier years to this aggressive 25%, 30%, or even higher rate you hear people talk about now.I guess that depends on the situation, dinner with the family vs a date, or a salesman's dinner vs a bunch of engineers having lunch.
Now, I've been plenty generous at times, and this post is not about generosity, just the changes in the way things are done that bring in more tip money.
Next on tipping: Cash is King (of course) and also tipping as corruption (large scale and small scale)
* This discussion started here with more here, under the Waylon and Willie music post.
** Though it can get more complicated with tip sharing, something that involves the IRS and other factors.
*** This is becoming a more widespread practice from what I've seen, and I'm not against it either. It encourages the use of cash.
Comments:
Adam Smith
Thursday - April 20th 2023 6:46AM MST
PS: Good morning, everyone,
Nice job on the skin whitening, Achmed.
Bill, I'm under the impression that San Diego is an expensive place to live. Smart Asset (whoever they may be?) says that one person, with no children needs at least $79,000 to live comfortably in San Diego.
https://www.cbs8.com/video/news/local/paradise-at-a-price/new-study-explores-what-salary-you-need-to-live-comfortably-in-san-diego/509-638dcc15-efdb-49e9-bc08-3b528e4279af
They said that San Diego was the second most expensive city to live in, San Francisco being the most expensive requiring a salary of $84,000 to live comfortably.
As long as we are talking about inflation, when Smart Asset conducted the same survey last year they determined that you needed at least $65,000 to "live comfortably" in San Diego. That's a 21% increase in the cost of living in San Diego in just one year!
Cheers!
☮
Nice job on the skin whitening, Achmed.
Bill, I'm under the impression that San Diego is an expensive place to live. Smart Asset (whoever they may be?) says that one person, with no children needs at least $79,000 to live comfortably in San Diego.
https://www.cbs8.com/video/news/local/paradise-at-a-price/new-study-explores-what-salary-you-need-to-live-comfortably-in-san-diego/509-638dcc15-efdb-49e9-bc08-3b528e4279af
They said that San Diego was the second most expensive city to live in, San Francisco being the most expensive requiring a salary of $84,000 to live comfortably.
As long as we are talking about inflation, when Smart Asset conducted the same survey last year they determined that you needed at least $65,000 to "live comfortably" in San Diego. That's a 21% increase in the cost of living in San Diego in just one year!
Cheers!
☮
The Alarmist
Thursday - April 20th 2023 5:07AM MST
PS
@BillH, you eat at home. The way inflation is going, that old staple of our grandparents, dog food, will soon be out of reach.
If the wait-staff are getting $18 per hour, maybe they should be paying for you to eat there.
@BillH, you eat at home. The way inflation is going, that old staple of our grandparents, dog food, will soon be out of reach.
If the wait-staff are getting $18 per hour, maybe they should be paying for you to eat there.
Bill H
Wednesday - April 19th 2023 5:38PM MST
PS What do you tip when the waitstaff is making $18/hour, which calculates to $3118/mth and you are living on $1985/mth retirement income?
San Diego's minimum wage is now $18/hr, and it includes employees who are normally tipped, such as waitstaff. A waiter at a dining establishment who receives 20% of the tab for tips can easily make $80-90,000 per year.
San Diego's minimum wage is now $18/hr, and it includes employees who are normally tipped, such as waitstaff. A waiter at a dining establishment who receives 20% of the tab for tips can easily make $80-90,000 per year.
The Alarmist
Wednesday - April 19th 2023 11:59AM MST
PS
Totally Legit Joe and The Congress Criminals (both parties) keep up with inflation by laundering the taxes they demand from you to protect their democracy from us.
Totally Legit Joe and The Congress Criminals (both parties) keep up with inflation by laundering the taxes they demand from you to protect their democracy from us.
MBlanc46
Wednesday - April 19th 2023 10:07AM MST
PS The rate is the rate. I’m sorry that servers are being pinched by inflation. I’m being pinched by inflation. We’re all being pinched by inflation. I’m not going to help the server keep up with inflation. No one is helping me keep up with inflation. Talk to Totally Legit Joe and the criminals in Congress about helping you keep up with inflation. That said, I try to be a decent tipper. 20% rounded up to the next dollar on smaller checks and 20% rounded up to the next five for larger checks. (And checks sure are getting larger.) If the service is so bad that the server needs to receive a message, I’d leave nothing. I don’t recall ever having done that.
Moderator
Wednesday - April 19th 2023 6:01AM MST
PS: Thank you very much, Adam. Done, using the first one. I lightened up the hand for the non-woke audience here at PS. (It looks like he may still have some dirt under his fingernails from gardening, is all...
Adam Smith
Tuesday - April 18th 2023 9:31PM MST
PS: How 'bout these?
https://i.ibb.co/LZMVVB4/tip.jpg
https://i.ibb.co/5My1wbs/tip01.jpg
☮
https://i.ibb.co/LZMVVB4/tip.jpg
https://i.ibb.co/5My1wbs/tip01.jpg
☮
Starve the beast. If you’re going to tip, leave cash. Inquire of those you’re doing business with whether they have a “cash discount”.