The tipping point: Some restaurants are saying no to gratuity

There’s power in the tip, diners say. (Bita Honarvar/ Cox Newspapers)
There’s power in the tip, diners say. (Bita Honarvar/ Cox Newspapers)

Credit: Bita Honarvar

Credit: Bita Honarvar

Tipping. Everybody has an opinion about it, and nobody is completely happy with the practice.

Recently, plans to raise the minimum wage in California and New York to $15 have renewed the debate over eliminating gratuities. And some industry leaders are trying alternatives: Prominent New York restaurateurs Danny Meyer (Union Square Cafe, Gramercy Tavern, Blue Smoke) and Tom Colicchio (Craft) have drawn a lot of attention by banning tipping entirely in favor of a surcharge added onto the bill that is distributed equitably to the staff.

Chez Panisse, Alice Waters’ legendary Berkeley, Calif., restaurant, has been adding a 17 percent surcharge to its checks since the late 1980s. The money reportedly is distributed among the staff as an enhancement to wages and benefits.

To tip or not to tip?

Last month, critically acclaimed local chef Noah Blom instituted a “hospitality included” program at his two restaurants, Arc and Restaurant Marin. Instead of a surcharge, though, the extra cost is built into the menu.

In some cases, that means a 20 percent hike in prices. Servers and bartenders, in turn, get higher wages — up to $25 an hour.

Blöm said the menu sticker shock is scary for some customers. At Marin, a breakfast sandwich is $22, and refillable coffee is $7. “But it all comes to fruition when you get your bill: You sign, and you’re done,” he said.

Still, tip-free restaurants and bars across the country are rare. The National Restaurant Association sees no industry-wide trend.

“The move towards a nontipped environment is a new and somewhat small concept with only a handful of restaurants testing it nationwide,” said association spokeswoman Christin Fernandez. “As the industry of hospitality, we’ve found the practice of tipping has traditionally attracted millions of employees to our industry and still has strong support from American diners.”

Dann Bean, owner of Main Street Wine Co. in Huntington Beach, Calif., agreed.

“Our regular customers are especially generous to my employees and appreciate good, friendly service. I personally am a little turned off by business owners who have raised their prices to accommodate tips for their employees. I am a little old-fashioned and believe service will eventually suffer.”


New signs have emerged to show that America isn’t ready to do away with tipping yet.

This month, Joe’s Crab Shack said it was scaling back on its no-tipping test six months after it launched the program at 18 of its 130 locations nationwide.

“After listening to customer and employee feedback, we have decided to keep the no-tipping model in four Joe’s Crab Shack locations,” said Bob Merritt, CEO of Ignite Restaurant Group.

Orange County servers say they’d rather hold on to their tips, according to an informal study by UC Irvine Professor Emeritus Richard B. McKenzie.

McKenzie surveyed 40 servers working for moderately priced sit-down restaurants. He asked what hourly wage they would need to voluntarily forgo their current minimum wage and all tips.

“The hourly pay rate given ranged from $18 to $50, with a median hourly rate of $30. All the servers were quick to assert that if tipping were replaced by a fixed hourly rate of pay, service would suffer significantly, at least on average,” according to McKenzie’s study, published in March for the think tank National Center for Policy Analysis.

Blöm and his partner and wife, Marín Howarth, are unfazed by the no-tipping naysayers.

The “math works” for them as a boutique restaurant group.

“For us, ‘hospitality included’ is not an ‘experiment,’ but the future of our industry,” Howarth said.

Their servers, in fact, have embraced the no-tipping policy.

No one has quit, and some are actually working even harder because they’re working for Arc, not themselves, the couple said.

“The staff has responded well, and we haven’t seen a drop in work ethic,” Howarth said.


Those who travel outside the U.S. know that our rules about tipping are not recognized universally by any means. In Fiji, Japan and Iceland, among many other countries, it’s frowned upon — most Japanese consider it an insult. Even in countries that allow tipping, the American norm of 15 percent to 20 percent for a restaurant meal is considered excessive. (Restaurants in some countries, though, add a 10 percent to 15 percent “service charge” to the bill, a la Chez Panisse. It’s easy to miss if you’re unfamiliar with the practice.)

So we’re a nation of unparalleled generosity when it comes to services rendered. Let’s set aside the whys and wherefores for a moment to consider this: Not so long ago, our country was more like the rest of the world.

Historically, rewarding the servant was an act of noblesse oblige and social dominance practiced by the aristocracy. Think of Shakespeare’s high-born characters, always paying off their underlings with little sacks of silver to ensure obeisance and performance of their dirty work. In the 16th century, guests at English mansions had to provide a tip, called a vail, to each of the owners’ servants at the end of a stay. (In larger mansions with more servants, the practice could be quite costly.)

Widespread tipping for services has also been traced to England. The word itself, according to some sources, is an acronym for “To Insure Promptitude,” a phrase that could be found on jars near the entrances of British taverns beginning in the 1600s. (Snopes, a website that discredits myths and old stories, says there’s little evidence to back that theory.)

Others claim that the word came from the criminal underworld. John Hendel, in his 2010 Atlantic magazine article “The Case Against Tipping,” claims that in 17th century rogues’ circles, “tip” meant “the unnecessary and gratuitous gifting of something somewhat taboo … or illicit money exchanges.”

The first literary instance of “tip” as a verb, in George Farquhar’s 1706 play “The Beaux’ Stratagem,” implies a monetary reward to a lowly employee: “Then I, Sir, tips me the Verger with half a Crown.” (A verger was a caretaker at a church.)


It’s understandable that a practice designed to reinforce the class system would not make its way across the Atlantic, particularly in the years after the American Revolution. But after the Civil War and the rise of fine dining in larger cities, tipping slowly began to take hold.

At first the custom was practiced by worldly and moneyed travelers who had encountered it in Europe. Yet for decades, tipping was treated with general disdain in the United States.

In his popular 1916 book, “The Itching Palm: A Study of the Habit of Tipping in America,” William Rufus Scott decried the rise of “flunkyism,” which he defined as “a willingness to be servile for a consideration.” He proclaimed it “democracy’s greatest foe.” Scott invoked the passions of the Founding Fathers when he declared that “tipping, and the aristocratic idea it exemplifies, is what we left Europe to escape. … In a republic where all men were supposed to be equal, some cannot be superior until they grind other men into dust. Tipping comes into a democracy to provide that relation.”

Scott wasn’t a lone voice in the wilderness. In 1904, the Anti-Tipping Society of America was created in Georgia. Its 100,000 members had to pledge not to tip a soul for a full year. Tipping was banned in several American states. Washington was the first to pass a law in 1909, followed by Arkansas, Iowa, South Carolina, Tennessee and Georgia. Labor leader Samuel Gompers and William Howard Taft, the 27th U.S. president, were among the leaders of the anti-tipping movement.

But by the 1920s, tipping in its modern form existed throughout the country. By 1926, every anti-tipping law at the state level had been repealed. So how did something that was so universally despised become common practice in only a few years? One word: Prohibition.

According to Kerry Seagrave in “Tipping: An American Social History of Gratuities,” the ban on alcoholic beverages in 1919 severely affected the revenue of hotels and restaurants. The resulting financial pressure quickly changed proprietors’ and especially servers’ minds about the practice. In other words, tipping replaced lost cocktails.

In the 1960s, tipping became even more deeply ingrained in American culture when Congress passed a law that workers could receive a lower minimum wage (presently $2.13 an hour) if at least $30 of their monthly salary was earned in tips.

Most states allow employers to pay tipped workers less than the state minimum hourly rate (in 19 states it’s pegged at the federal minimum, which hasn’t changed since 1991), and the real value of this “tipped” minimum wage has declined about 60 percent since 1968. Many people are aware of this situation, which leads to another level of motivation for paying your server, one that turns its aristocratic origin on its head. “We tip because we feel guilty about having people wait on us,” writes Cornell University professor Michael Lynn, an expert in the psychology of tipping.

Benjamin Franklin captured the dilemma even more succinctly: “To overtip is to appear an ass: to undertip is to appear an even greater ass.”