Have we reached the tipping point on tips?

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Complaints are growing about being asked to tip more — and more often. Will it be enough to change our ways?

Published Sep 28, 2024 • Last updated 2 hours ago • 6 minute read

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Tip suggestions were initially raised as a way to show appreciation to frontline staff during the COVID-19 pandemic, “but now, the pandemic is behind us, yet we still see those tipping requests for … up to 30 per cent in some cases,” says Maximilien Roy, Restaurant Canada’s vice-president for Quebec. Photo by John Mahoney /Montreal Gazette

Feeling weird about tip requests lately? You’re not alone.

Several recent surveys have documented customers feeling like they’re being asked to tip more — and more often — leading to what is sometimes called “tipping fatigue.”

That was acknowledged in part recently by the Quebec government, which proposed a bill to address what it described as transparency issues, but stopped short of regulating other aspects of the practice. According to experts, it’s clear that tipping culture is in a transition period. What’s less clear is where it’s headed.

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“I think what we’re seeing here is the pendulum moving to one side,” said Jordan LeBel, a professor of food marketing at Concordia University’s John Molson School of Business who has decades of experience in the restaurant industry. “And as with all things, if we give it long enough, at some point the pendulum is going to find an equilibrium. It’s gonna come back somewhere.”

Tip suggestions were initially raised as a way to show appreciation to frontline staff during the COVID-19 pandemic, “but now, the pandemic is behind us, yet we still see those tipping requests for … up to 30 per cent in some cases,” said Maximilien Roy, Restaurant Canada’s vice-president for Quebec.

The higher requests then became a way for employers to deal with a labour shortage, said Martin Vézina, the Association Restauration Québec’s vice-president of public affairs.

“When we talk to our members about it, what we’re told is that it’s often to respond to a request from the service workers,” he said. “Employers accepted to increase the rates because they didn’t want to lose their staff.”

LeBel added that coming out of the pandemic, employers both in the restaurant industry and other sectors “have felt cost pressures from every side: increasing cost of goods, increasing shipping, increasing cost of labour, difficulty in finding good labour,” he said.

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“I think they were a bit too quick in passing the buck off to consumers. Now wherever you go, they hand you the terminal … and you’re asked for minimum 15 per cent tip at places where you never used to tip because the service was sort of part of the concept.”

“People are tired of being asked for that sort of plus-plus-plus,” says Jordan LeBel, a professor at Concordia University’s John Molson School of Business. Photo by Pierre Obendrauf /Montreal Gazette

Aware of growing discomfort among customers, Quebec Justice Minister Simon Jolin-Barrette proposed Bill 72, which among other measures would require suggested tips on terminals at restaurants be based on the pre-tax total rather than the after-tax total.

Asked why the government didn’t go further to regulate tip requests, Jolin-Barrette responded: “We want to give the freedom to all Quebecers to give what they want when they’re tipping.”

A 2023 Angus Reid survey found that most Canadians — 59 per cent — would exchange the current tip system for a service-included model with higher wages for servers, which wasn’t the case in a 2016 survey, when just 40 per cent were in favour. The 2023 survey also shows that the large majority of those in favour of ending tipping — 86 per cent — believe the current system allows employers to underpay employees.

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In an effort to offer stability in an industry that isn’t known for it, the owners of Mile End restaurant Larrys implemented a tip-inclusive system back in 2021. The owners’ neighbouring restaurant, Lawrence, operates under the same model.

But according to Vézina, Quebecers are divided on the matter.

“Consumers still like tips, because it allows them to judge the service they received,” he said. “We don’t think people are ready to include tips in prices.

“Maybe in the future people, will change their habits, but for the moment … it’s hard for businesses to go toward a model without tips.”

Servers wouldn’t necessarily want a model without tips either, he said, since they would likely make a lot less money.

“In the restaurant industry, to have tips is literally to be paid by the job and not by the hour,” says Jimmy Carey, a server at a microbrewery on Montreal’s North Shore. Photo by Pierre Obendrauf /Montreal Gazette

Jimmy Carey, a server at a microbrewery on Montreal’s North Shore, said he lives off tips and that he would leave the industry if they were included in the price of meals. He sees the current structure as an incentive to provide the best service possible.

“Tips are a bit like commission in sales. If you sell more cars, you make more money,” he said. “If you give an hourly salary to a car salesperson, whether you sell cars or not, you get the same salary. I’ve had a lot of jobs in my life. There’s a saying that comes up a lot among construction workers: ‘We’re paid by the hour, not by the job.’ So what that means is however long it takes you to dig a hole, you’re paid $30 an hour. If you stretch the time, you’re still paid.

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“In the restaurant industry, to have tips is literally to be paid by the job and not by the hour. So depending on the job and the service you give, your pay will be better.”

For Lorrie Snyder, a server at a Montreal resto-bar, tips allow her to make enough money to work part time while studying full time.

“The tips are the main factor contributing to me working in the industry,” she said.

But Snyder added that she does think a tip-inclusive model could be viable for servers, depending on how it would work.

“If anything, it guarantees me to actually get a tip,” she said.

Snyder said she has noticed frustration among customers faced with higher tip requests — pointing to some terminals now beginning at 18 per cent — and she understands, “but it is the system that we have here.”

“I don’t have a problem with not tipping someone if the service was really terrible,” she said. “But if you’re at a sit-down restaurant and you know the waiters aren’t making minimum wage and then out of your principle of ‘I don’t like tipping’ you don’t tip, that’s something I have a problem with, because they’re not paid a minimum wage, a livable wage, and that’s why tipping is a thing.”

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Carey added that it’s well known profit margins are slim for restaurants — between two and four per cent, according to Restaurants Canada — which increasingly translates to front-of-house staff being asked to give a percentage of their tips to kitchen staff.

“Eventually you say: ‘I don’t mind giving them more, but is there a way we can try to get more?’” Carey said. “If people decide to leave 15 (per cent), that’s their right, but if we manage to get 18 on almost all the bills, I don’t mind giving one, two, three per cent more to kitchen staff if we’re getting it from customers.”

For Carey, getting more tips involves providing good service. The terminal where he works still starts at 15 per cent.

Roy said Restaurants Canada typically recommends members set suggested tips to 10, 15 or 20 per cent, with the option for a customized amount.

“We need to make sure that the customer always has the option of deciding what amount he or she thinks is worth for the service received,” he said.

What ends up on the terminal, however, is at the discretion of restaurants. Roy said employers and employees should be having conversations about the level of service provided and how much tip the restaurant is requesting.

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“At the end of the day, if the consumer is frustrated about what he sees on the terminal, it’s not good for anyone,” he said.

LeBel said that decades of research show consumers get irritated with added costs on bills in general — not just at restaurants.

“People are tired of being asked for that sort of plus-plus-plus,” he said.”Why are we not … using that to shape some of the decisions to be made?”

Looking to the future, LeBel said he thinks restaurateurs and restaurant associations need to band together to start conducting research and coming up with long-term solutions as opposed to the short-term fix of passing costs off to customers.

“Maybe something that looks at best practices elsewhere,” he said.

At the same time, customers should remember they get to decide what tip to leave based on the service they received.

“Customers have to start exercising their voice,” LeBel said.

kthomas@postmedia.com

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