Should I Tip if the Service is Lousy?
Rude manner, botched orders, slow service, bad food -- find out when it's okay to stiff your server. Plus, should you pay your dentist in gifts instead of cash?
By Knight Kiplinger, Editor in Chief
From Kiplinger's Personal Finance magazine, March 2008
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Is it okay to leave a restaurant server a stingy tip for bad service?
Yes, indeed, if the bad service is really the server's fault -- rudeness, botched orders, a bored manner. But don't penalize a server for things beyond his or her control, such as a short-handed kitchen, not enough servers or bad food. And always bring poor service and other problems to the attention of the maitre d'.
Sticking it to the little guys
I work in purchasing at a very large, highly profitable firm that often ranks in surveys as one of America's most admired companies. Several times a year, orders come down from the chief financial officer to delay payment to our vendors and also rebuff their late-payment fees. This pushes our expenses forward to improve the bottom line of the previous quarter and meet Wall Street's expectations.
I am uncomfortable with this. Many of our vendors are small, struggling firms that are dependent on our large orders. We're causing them cash-flow problems. What should I do?
Your company's bullying of its small vendors is highly unethical. I hope you tell your suppliers that you don't agree with what you are being told to do. Your company probably has formal procedures for raising ethical concerns, so use them. You will be taking a risk as a whistleblower, but this issue needs to be addressed at the highest level. Good luck!
Barter for dental work?
My dentist suggested that instead of paying for some work he did, I could make a gift of a flat-screen TV of the same value. He said this bartering is perfectly legal. I'm skeptical.
You should be. It sounds as if your dentist is trying to evade income taxes. Courteously tell him this isn't proper and ask for a normal bill.
Have a money-and-ethics question you'd like answered in this column? write to editor in chief Knight Kiplinger at ethics@kiplinger.com.
Reader Comments (13)
Posted by: Jim at 02/20/2008 10:29:26 AM
I worked at a resturant for about 10 years through high school, college and then for a little while after college ... While I definately agree with being stingy if their service is extremely poor, I do have to defend them to a certain extent. There used to be people that would come in where I worked and (very rudely) ask why it was taking so long. Look around you. How many customers do you see? How many employees do you see? Do the math yourself. If a resturant is short staffed, the servers are already stressed and busy enough without having to deal with rude impatient questions about things that should be quite obvious. Many time people believe their "botched order" to be the server's fault when in fact, a lot of times it isn't ... Bring it to their attention and ask that it be fixed. If you do this nicely, 99% of the time your server will be perfectly willing to get it taken care of. And sometimes even compensate you with a discount, a desert or a certificate for your next visit. Beware though, if you are rude to your server, run them excessively, change your mind multiple times etc, odds are your server is going to stop caring about a tip. They just want you to get out so they can get their next table. It doesn't matter how good a tip you leave if you're a jerk the entire time you're in there. Ultimately, getting good service is a 2 way street.
Posted by: Alex at 02/20/2008 11:10:07 AM
The answer on the bartering for dental work question is wrong. There's nothing illegal or unethical about such deals. The IRS code even allows for such arrangements -- the dentist just has to report the fair market value of the goods received as income on his tax return. Such deals can be a win-win for both parties as the dentist will avoid the costs associated with billing and receiving payment and the risk on non-payment, and the customer will get a break on the price because his cost for the TV is probably a lot less than his dental bill.
Posted by: Duane at 02/20/2008 12:59:28 PM
I've worked in the food industry for over 30 years in every position from dishwasher to manager. The reality is all waitstaff are under paid and over taxed. Did you know the US government automatically assumes a tip is paid on all orders? Most restaurants collect taxes based upon an 8 -15% tip per order. If you don't tip you are pushing there wage below minimum wage. Some states have insanely low waitstaff wages. One state is as low as $2.50/hour. Tipping is now considered a given. Better to tip extra for excellent service. If you do you'll get better service every time.
Posted by: Steve at 02/20/2008 01:06:03 PM
While the server may not be at fault for staffing shortages, or botched orders, neither is the customer. The customer should not have to make multiple observations and deductions in order to assign blame for poor service. The customer is there to eat! When patrons leave smaller tips for poor service, the server gets the message. If the server believes the fault lies with someone else, then the server will certainly let them know because the poor tip just effected their earnings. If the problems continue, the server finds a new place of employment, and patrons no longer return. This is how the free market works.
Posted by: lbg977 at 02/20/2008 02:13:35 PM
Many web sites, news media and magazines guide you what to tip while traveling, none of them tell you of what to be aware of while tipping. As more and more people travel to touristy places, it is a good idea to keep abreast of changing tipping customs at those sites and reading the bills carefully. Recently, we happen to visit and stay in Miami and then took a cruise from there to Caribbean. To our surprise, what we realized that almost all the restaurants, hotels, cruises, and many other places have routinely started charging an 18% gratuity as a part of the bill. That is fine, but then at the end of the bill there is a separate item asking for tip or additional tip. Often we did not notice that our bill has already built in gratuity and we paid the tip. If there is a built in charge for gratuity there should not be a line item for tip. I believe this is a misleading practice and should be banned. The bottom line- read your bill carefully before you pay for it.
Posted by: James at 02/20/2008 03:23:42 PM
I disagree. Service in the United States has become something that must be paid for. And I for one, refuse to pay for poor service. Its a direct monetary relationship between the server and customer. You give me poor service, you get poor compensation. You give me good service, you get good compensation. The concept of tipping is archaic anyway. Countrie's that operate without tipping have better standards of service overall, in my opinion.
Posted by: H at 02/20/2008 03:47:27 PM
I work at a small company, and we are constantly wrangling with our debtors. Its amazing how many companies throw their weight around to avoid paying bills on time. This is a systemic problem for small businesses who cannot afford to wait for months to get their money. There oughta be a law....
Posted by: John at 02/20/2008 05:28:56 PM
Am responding directly to the post by James... Have you never been in Europe? Even the Europeans joke how bad their service is compared to the USA, overall. While I agree that tipping is a bit archaic, it does provide for measurably better service.
Posted by: Brian at 02/20/2008 08:20:09 PM
I also have worked in a few restaurants over the years, and I can tell you that the servers typically get paid better than the dishwashers, and the cooks, and even the chef and the managers. The only ones likely to be getting more money are the owners of the restaurant. I have known people with college degrees who made more money waiting tables than doing a job using their degree. When I used to work in non tipping positions at restaurants I didn't think much of the assumption that it was my imperitive to subsidise the income of a server who made more money than I did by tipping them. If you want to reward a worker who has a thankless job that frankly sucks, tip the dishwasher. Incidentally Steve Buschemi did a great job of refuting the automatic tip fallacy in the first scene of the movie "Reservior Dogs".
Posted by: Brett at 02/21/2008 02:56:00 AM
James wrote "The concept of tipping is archaic anyway. Countrie's that operate without tipping have better standards of service overall, in my opinion." To me this sounds like you're dining at Jiffy Lube with a pre-determined formula for meal satisfaction. Unless you enjoy dining at Jiffy Lube or that little family owned joint on the Tuscan coast where everyone has a vested interest in your enjoyment, you better tip 20%. Service is subjective, I suppose...But have simple compassion and not treating "YOUR" server as a robot makes a world of difference. He or She has your best interest at heart, generally speaking from my experience, and a lot of your dining experience depends upon your own attitude when you're heading out. In other words if you're looking for a bad experience you will have a bad experience...If you honestly feel that a server treated you like a sack of crap then you should tip nothing. If you can tell that person while looking him/her in the eye.
Posted by: AG at 02/22/2008 11:33:28 AM
This is the second time Knight is wrong on the ethics as far as dentist is concerned. A couple of months back it was a similar issue with a workman wanting cash payments. What is unethical is making judgments on other people and assuming they will not do the right thing. The reader asked if it is illegal. The answer is that it is not! Is it unethical? Only if the dentist does not report the fairvalue in his taxes and does not issue a receipt. As long as the dentist is issuing a receipt, it is legal and ethical. What the dentist does with his taxes is his business and if it is obvious with evidence of wrongfoing, the dentist should be reported to the IRS. But without any such evidence, it is wrong to assume that the dentist is up to something illegal or unethical. Whatever happened to trusting people doing the right thing and policing one ownself?
Posted by: TS at 07/08/2008 05:01:17 PM
Bartering is perfectly legal, both parties are agreeing on the price of the service/gift. You do have to state a fair estimate on your taxes but you also have to do the same if cash changed hands, there's no difference. Here in the Southwest, bartering is the way of the land. For our family business we regularly got paid in beef, elk meat, labor, services from another business, even a 1885 colt revolver once. Being asked to go out and buy something as a gift sounds a bit sketchy, however, but if the person already had the flat screen tv beforehand and a trade was negotiated, I don't see anything wrong with it.
Posted by: Josh at 08/18/2008 03:58:19 PM
The payment in the form of a "cash equivalent" is perfectly legal for the payee to pay the invoice. What is not ethical and actually illegal is the evasion of the payment declaration as income received by the service provider. As long as the payment is received and taxes paid in the future all is quite ethical. Check witt your accountant and legal advisor.