The Tipping Point

How much do you tip your server? It depends on many factors. I’d like to share with you some of the factors that I think determine a server’s tip, but first let’s talk a restaurants profit margin so that you understand a bit more about the economics of the restaurant business which is related to tipping.

Many people don’t realize that most of the restaurants only make a nickle for every dollar that is taken in. So when you see a restaurant full of patrons and think “Wow, they’re taking wheel barrels of money to the bank”, that’s true! Except when 95% of it goes right back out of the bank to pay expenses like rent, cost of goods (suppliers), advertising and many other expenses including it’s largest expense that accounts for some 1/3 of all revenue taken in: LABOR.

Why not reduce labor by having less staff on? Well quality and service would suffer of course. There is a delicate balance of having the proper amount of staff on to maintain not only the quality of service and food for the customer but particularly for the wait staff. If too many servers are scheduled, their overall income for the shift suffers as they will wait on less customers and thus earn less tips.

Servers earn 45% of the minimum wage ($7.25) or a tip wage of $3.26 per hour. When you add in the tips that servers earn, most casual dining servers and bartenders are earning somewhere between $12 and #18 per hour. Should their tips plus wage not be enough in a shirt to earn the minimum wage, then the employer must make up the difference to bring the server’s wage up to $7.25 an hour.

Some have suggested to simply add 15% to 20% to every menu item and increase all servers pay by 15% to 20%. Not a bad idea and some day a restauranteur will have the courage to do this. I’m not ready to start charging $12 for a burger.

So how calculate what you tip? Most tip between 15% to 20%. Some simply double the NH Rooms and Meals tax (9% x 2 = 18%). That’s a simple way. Many people have different ways of calculating the tip. But I want to know WHY you tip more or less than the 15% to 20%.

Here is how I determine the tip… ready? ATTITUDE

That’s it, one word with a whole bunch of sub words that hold it up. Genuine, caring, attentive, smiling, engaging and a myriad of other words that make me feel good while I’m dining. Mistakes happen, it’s how you handle the mistake. Are they apologetic? Do they genuinely care about your experience? Is their personality real or are they piling it on phony bologna.

It really bothers me when people get angry at a server because ‘they are too busy’, or ‘their food took too long’ or ‘the food was cold’. This is NOT the servers fault. This is management’s fault and ultimately the owner of the restaurant fault. However, on the three examples above if the server is aloof in each of those incidents, then the server didn’t cease the opportunity to show care and concern about the situation. That’s all it takes is just a sign that the server actually cares about the experience I’m paying for.

So, how do you get a 30% or higher from me? Smile, be genuine, work hard, try your best, and when a mistake happens, apologize and do your best to make it right. Most of all, have a great positive attitude and you will be handsomely rewarded.