Do you leave a tip?

Here’s a tip: be good to your mother.The tip jar at my local café is a sorry sight. I’d guess it has $20 in loose change, most of it sitting there for months. Nobody seems to leave tips for staff, and the café, to its credit, does not pressure customers for gratuities despite excellent service.

I have noticed other cafes with measly tip jars. Some owners tell me people do not tip as much these days, and many do not tip at all.

Of course, it is impossible to know: tips are not recorded or tracked each year – other than the usual stories from restaurateurs and hotel owners telling people they should be leaving a tip of at least 10 per cent. And that we should all follow the Amercian example of paying more for strong service, and some customers being treated better than others, depending on their tipping habits.

What’s your view on tipping? Do you like or loathe tipping?Are you leaving a lower tip or no tip these days at cafes, restaurants, pubs or other service businesses? If so, why?Do you believe Australia should abolish tipping and resist the American trend?

A University of Melbourne study by PhD candidate John Frank Burgess attracted plenty of headlines last year after suggesting tipping in Australia would become more prevalent. We will supposedly tip more because an increasingly deregulated labour market will make customers feel obligated to help out staff on lower wages.

I disagree. My hunch is people will tip much less in the next few years, and some who used to will stop altogether.

A weak household sector and low consumer confidence does not inspire large tips. With wages growth slowing or going backwards in many OECD countries over the past three years, it seems obvious that tips will be cut.

How many people can afford to leave an extra $5, $10 or $20 when they dine, or a few dollars here and there when they buy a coffee or other drinks?

The other problem is declining service. It is hard to leave a decent tip when you have to call out to be served, and wait too long for a meal or drink. Or put up with rude staff who are annoyed with their employer for being short on numbers and overworking everyone.

You almost feel like tipping staff in department and speciality stores just for serving you these days, let alone for providing above-average service.

Cost, too, is an issue. I find it hard to tip taxi drivers when there are so many extra charges and fees, and some barely speak to you.

Or when it costs $9 for a basic drink at a fancy hotel and almost $4 for a tiny, lukewarm coffee. High prices for so many services have already factored in a tip in my view, although clearly not enough of it gets to staff in some businesses.

Moreover, the long-term trend towards a cashless society has implications for tipping. It is one thing to put a few dollars in the tip jar, knowing staff will (hopefully) divvy it up at day’s end. And another to put a tip straight into the business bank account through a credit card or EFTPOS, and hope the business shares that money with staff. How do customers know that payment gets to those who earned it?

Still, one has to feel for staff that rely on tips for extra income, and small businesses that have been accustomed to receiving tips. As more penalty rates are inevitably cut and wages for service staff fall, or are eroded by inflation in coming years, tips will be more crucial.

Perhaps customers will tip more if Australia continues towards a less regulated labour market, as suggested by the University of Melbourne research, out of a moral sense to help service staff.

But will that help or hinder service staff in the long run by encouraging companies to push for even lower wages, knowing tipping – unpredictable as it is – will slightly lift take-home pay?

Let’s hope Australia does not follow the US example of lower wages, high reliance on tips, and more industries putting their hand out for gratuities. It’s remarkable that some airline pilots and flight attendants in the US now ask for tips from passengers, such is the low rate of pay in discount airlines. From a safety perspective, it does not inspire one with confidence knowing the pilot is passing the hat around for a few extra dollars.

The upshot is small businesses that rely on tips to attract and reward better staff need to adjust to lower tipping in coming years. Better still, those that consistently provide higher service should build a small tip into their prices, and reward staff for outstanding service.

Expecting people to leave a bit extra on top of already high prices when service is declining and customers are feeling the pinch is a terrible idea for any business.

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