To Tip Or Not To Tip? A Debate on Tipping Culture in Canada

Episode Summary

Tipping culture is a significant part of the restaurant experience — especially in North America. However, tipping isn’t universal — some places charge service fees while others disallow tips entirely. And really, do customers enjoy tipping? Is it an effective and fair wage structure? Let’s find out.

In this intriguing episode of Half Banked, we delve into tipping culture. We also look at the burgeoning trend of tip creep, a controversial phenomenon that's causing ripples in the North American restaurant industry. We interview Marc Cohen, a Montreal-based restaurant owner, and Sam, an Ontario-based server. These two are on the frontlines of the service industry. Their unique perspectives reveal the intricate workings of the tipping culture as they grapple with the rising pressure on patrons to tip.

Tune in for a dive into tipping culture — and find out how both sides, server and restaurant owner, see it.

Here are three reasons why you should listen to this episode:

1. Learn how to navigate the rising trend of tip creep and understand its impact on both businesses and consumers

2. Discover unfiltered insights from both the server and business owner's perspective about the increasing pressure to tip.

3. Understand the options aside from tipping culture and how they could reshape the North American hospitality industry.

Resources

• Visit the official site of Lawrence, Larry’s, and Boucherie Lawrence.
• Follow Marc Cohen on Instagram

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Transcript

Mark Cohen: We're a restaurant that's busy sometimes and not busy other times, and the staff have to be there either way. If there's a snowstorm and like, the restaurant's empty, that's not the staff's fault. They shouldn't then not make any money.

We, as the employer, we're the ones that have to sort of take that gamble and make an average wage that will be based on, like, busy days and slow days.

Bethan Moorcroft: I'm Bethan Moorcroft

Cadeem Lalor: And I'm Cadeem Lalor.

Bethan: And this is the Half Banked Podcast. 18%, 20%, 25% you might be used to seeing these prompts at a restaurant or bar, but what about getting them when you're buying chocolate or checking in at the airport?

Cadeem: Tip creep and tipflation. These are both things you may have witnessed since the onset of the pandemic. Tipflation is the rise in the amount that a business will prompt you to tip. Tip creep is the rise in promise to tip. Maybe you've noticed both of these, or maybe you're so used to them that they don't phase you anymore.

Bethan: I mean, I've definitely noticed it the other day, actually. I went to buy a bag of crisps, or chips, as you call them, and I went to pay on my debit card and it asked me for a tip, and it just made me think, what am I tipping for in that situation?

Now, I'm not saying all tipping is bad. People absolutely need to make a living, and when you get excellent service, I believe that it should be rewarded.

Cadeem: We were chatting about this in the office the other day, and it started a water cooler debate about when to tip and how much, and that discussion inspired this episode.

Bethan: Many of our coworkers seem to agree that too many places are asking for tips these days. And according to a 2023 Angus Reed poll, four out of five Canadians agree with that.

Cadeem: Meanwhile, only 13% believe customer service has improved as tips have increased. This has led to a 59% increase in the number of Canadians who say they prefer a service included model, which would include the tip in the price.

Bethan: So why are more businesses charging tips? And what do business owners and servers think of the increased pressure on people to tip? And what can you do to better judge whether you need to give in?

On this episode of Half Banked, we're talking to a Montreal restaurant owner and an Ontario-based server to get two sides of the debate and help break down all the things you need to think about when you get asked to tip.

Cadeem: First, we're talking to Sam Brodati , a server who currently works in a luxury hotel in Southern Ontario. We'll also talk to Mark Cohen, chef and co owner of the Montreal restaurants Lawrence & Larry’s, and butcher shop, Boucherie Lawrence. First we have Sam Brodati. Sam, thanks for joining us.

Sam: Thanks for having me.

Bethan: So Sam, tell us a little bit about yourself and your experience serving.

Sam: So I'm 31. I've sort of been in and out of restaurants a couple times throughout my career. I've been worked at three different restaurants in total, pretty different places from each other. And in terms of the tip culture at them, the first one that I worked at was a cafe in Bistro. Really small place, totaled ten tables in downtown Toronto.

Tips weren't great there. It was just a cafe. So the average bill was $25-30 that people stayed for lunch kind of thing. So a $10 tip was a lot. Second place that I worked at was an Italian restaurant, again, a one-off kind of place in Hamilton. Definitely more high end, and tips were better there. The servers kept our own tips with a little bit of cash out for the back team.

And the place that I'm at right now is a luxury hotel with obviously much higher average bill, and it's a tip pool. So we split all the tips based on your point value and what position you are and how many hours you work and that sort of stuff. But you don't keep your own tips.

Cadeem: Just wondering, so when looking at your experience being a server, would you rather a salaried position, basically, with no guaranteed tips, minimum below wage, or would you prefer minimum below wage with the promise of tips?

Sam: I think it depends on the type of service that you're doing and the type of place that you're at. I'm quite happy to receive a smaller than average salary with the addition of tips on top. I do recognize that I'm at a place where the tips are sizable. When I was at the cafe and making $20 a day in tips sort of thing, I'm sure that I would have taken an extra couple of dollars on my salary or my hourly wage at that point.

So I recognize that it might not be universal this way, but I've always felt that as long as the hourly wage is enough to sort of have a baseline of income coming in, that can cover the majority of my bills or necessities, the tips are really nice.

It works for my personality, I guess, that you don't necessarily know what you're going to get and when you get a high tip or more than you're expecting, it's sort of instant gratification, a nice reward for hard work. Or if you leave a table feeling like you did a really specifically good job with that table, the tip is confirmation that they feel the same way, and that feels pretty good.

Bethan: One thing I wanted to ask you, actually, Sam, so you've experienced this from a service standpoint. When you're at a restaurant yourself, you're eating out with friends, family, et cetera. What's your kind of expectation before putting down a tip? How do you sort of carry that through to being served upon?

Sam: Yeah, I mean, I believe in tip karma, so definitely I would say that sort of my baseline is 20%, sort of maybe a bit higher than what some people would consider the average tip, having sort of the inside view of what the job is.

Like, I'm both more appreciative of the work that they do and more forgiving when I know that there are issues at the table or that isn't necessarily the server's fault. So I can definitely recognize if something comes out of the kitchen the wrong way, or if they're totally slammed and busy and they forget a drink or something like that. I can sympathize with that quite easily.

But I'm also more critical when it's something that I know is the server's fault if they don't appear particularly busy and maybe they choose not to write things down and they forget something. Or if somebody mentions no tomatoes in my salad and it comes with tomatoes, that kind of stuff, when I know it's something that was in their control, I can be a little bit harsher and more willing to drop down. Like, I have no problem giving a 10% tip or not tipping if the service really gets to that level.

Based on the society that we live in and the tip of culture here, I wouldn't say that to expect not to tip, to sort of go in expecting zero tip or making them earn any kind of tip. To be fair, when I'm serving people, if I don't get tipped or I get quite a low tip, to me, that's a message that they sent to me. The tip directly reflects my quality of service that I gave them. If something goes terribly wrong with the table, whether I know it or not, if you choose not to tip, that's fair, but that's what you're telling me.

So if you come in and really think I need to earn any sort of tip from you, and I do a really good job, and you think, okay, I'll tip you 10%, you earned it sort of thing, to me, you're sending the message that something went wrong here and it wasn't up to your standard.

Cadeem: I think what I'm getting from you as well, typically, even if a service is not that good, you kind of view a bit of tip as reasonable. You said drop it down to 10%. I guess maybe if service is worse, maybe even down to five, but there still is you still would as being a customer, still tip or maybe service that isn't excellent. Is that right?

Sam: Yeah, that's correct. Generally I'll tip. It's pretty rare for me to not tip at all. I also recognize that a lot of places you're not just tipping the server right. For example, the place that I work at, it's pool tips so that some of your tip might be going to the kitchen if you really enjoyed the food but didn't like the service. If you choose not to tip, you could be affecting everybody.

Cadeem: And also, I want to ask you on the topic of a tip, is, have you seen the issue of tip prompts basically in other industries? Maybe you're just literally getting a bag of chips, candy bar, things like that, kind of a cashier standing there who just kind of scans your item and then a tip prompt as well and that can be for takeout and other items. What are your thoughts on the rise of tip prompts in other industries?

Sam: I guess trying to decide right now whether this is considered a double standard. Tips should be reflective of the service that you get regardless of the situation that you're in. It's most common for us to be pressured to tip or expected to tip at restaurants and that sort of situation, right. I will tip when I'm getting takeout from places.

If it's somewhere I go often or the service is really friendly or something like that. Maybe not 15%, but I'll put to $5. That sort of kind of tip on there. If it's at a convenience store or something like that where they barely say hi and then they scan the stuff. You could ask me to tip all you want. I have no problem with the prompts to tip, but I feel very comfortable saying no in that situation. 

Cadeem: And I was also wondering because you've mentioned that you have pooled tips. You mentioned worked in places where there's pooled, previous workplace I think, was just you kept your tips, believe that was a cafe. So is there one that you prefer?

Sam: Well, I think I prefer the pooled tips even though it does obviously reduce the amount that I get compared to what I see on my bills at the end of the day.

First of all, it makes it more consistent payment. The amount of tips that I get in a week on average is sort of steadier than it was at the Italian restaurant that I used to work at. There were nights that I would make quite a bit of money, but there were also nights where it was pretty dead and I would make more or less no money or whatever, just my $10 an hour or whatever I was making at the time for a few hours. It's not quite the same thing.

Place that I'm at now, we're busy enough that there's always something going on. Occasionally my section is pretty dead and if I were to only make the amount of tips that I get in my section, it wouldn't really be worth the night of work kind of thing, but I know I'm going to get some from everything that's happening in the restaurant.

Alternatively, the biggest change with the pool tips is the workplace environment. I would say when everybody is sharing on the tips, it really becomes a team effort and you're just as invested in other people's sections going as well as you are in your own. When you're making your own tips, then obviously you still want people to have a good experience at the restaurant and all that sort of stuff, but you're much more focused on your table specifically.

It's your direct influence then, on how much money you're going to make that day. So it's kind of nice to feel like we're all on a team together every single night at the restaurant and everybody's trying to make all the guests' experience as smooth as possible.

Bethan: So with pooled tips, as you said, you have a bit of a better idea, kind of what's going to come in each week and a bit more of a reliable income. Can you share any kind of financial tips for other servers who are very much reliant on that extra top up? Based upon your experience, were there any things that you've done or any tips that you can share for others in the industry?

Sam: I save my tips for a month and then I deposit it all in the bank and then sort of use that. As for my monthly expenses, the longer time period that you accrue tips for, the more it averages out.

So if you sort of go weekly, you might have a couple of bad weeks in there. And if you're spending all your tip money at the end of the week, you could get into some financial trouble or find that you're not making as much as you think you are.

If you're not keeping track of what you're spending by stretching it out over a longer period of time, you have some good weeks, some bad weeks to kind of leave it up to the average of how it turns out. And you have a bit seems like a bit steadier of income.

It's also pretty important, obviously, to reconcile how much you're making on your salary or your hourly wage with how much you expect to get in tips. And that way you know what percentage of your tips you sort of need to save or need to consider necessary money, as opposed to spending or saving money, which is kind of comes on top of all your bills.

Bethan: That's really helpful. Thank you. Another thing that I'm very curious about, as you may be able to tell from the accent: not from Canada. I moved over here from the UK a few years ago. And the tipping culture here is very different to back at home and also in a lot of European countries where kind of service charges are included in the final bill.

So you don't actually have to leave a tip. It's not expected of you. If you do leave a tip, then in that situation, it's kind of an extra thank you for your excellent service, and people will often kind of leave it in cash or slip it across the table sort of thing.

What are your thoughts on that kind of service included model? Just making that the standard here. Do you think it could work in North America or is this kind of tip culture too ingrained?

Sam: I think it's objectively a better system. I think it would be pretty difficult to sort of implement here and have people still kind of ever tip if they feel like they've already been charged a tip on top of that.

For my personal personality or for myself, I think that I prefer the way that it is now, selfishly being the one receiving the tips. I think I’d probably make a bit more money when you provide quality service and get a big boost of a tip. I don't know how inclined I would be to add a tip unless it was really extraordinary service if I see on my bill that I'm already getting charged and that kind of covers it in my mind.

Which is the point of it, and works well from the customer perspective, kind of takes the guesswork out of it. No one needs to feel pressured or anything like that.

But I feel the tips are a personal reflection of the work that I gave them. So to have a table that I think I did really well with and had a lot of fun with and I feel like I really improved their experience that night. I kind of want to see the difference in their tip compared to somebody that had a mediocre time or just wasn't in the mood to interact with their server or whatever it was. And I'm kind of expecting an average tip from them.

The tip means something, right? So instead of just being like an extra tax on the bill, I kind of enjoy the fact that there is some variance to them.

Cadeem: I will say too, because when I learned about that system I was thinking that for someone like you who's kind of motivated to make sure the service is good, that can be your saving method. And you've been in this industry for a while too.

So do you find that just generally that this is an industry that basically is a reliable, makes reliable living? Especially I guess being in southern Ontario where it is relatively expensive?

Sam: Yeah, I think so. For servers, it all depends on your financial habits, how disciplined you are. But I don't see it having good days and bad days, or good weeks and bad weeks. I don't really see it as being too different from say, an entrepreneur or someone who's self employed or anyone who doesn't have the standard paycheck coming in.

Some places are going to be better than others and it sucks. I've been there when at the Italian restaurant, for example, there were some slow periods and it's disappointing to go into work and not be making the money that you're sort of expecting.

But it's definitely not the only industry where you sort of go through ebbs and flows of cash and the amount that you're bringing in, it depends on the place you're at. When I was at the cafe and I was making quite a little amount of money in tips. I don't know if that would have been sustainable necessarily as a full time job, especially with prices like in Toronto nowadays.

But in general, the stronger server you are and the more you invest in your serving skills, your knowledge of menus, knowledge of drinks, your interpersonal skills, the more that's going to be reflected in the type of work that you can get, which the type of restaurant that you can work in, and the more you're going to be rewarded for that.

So I think there are high highs and low lows in the industry, but it is all sort of motivation to get to the highs, basically, and put yourself in a position to make the money that you're looking for.

Bethan: Yeah, what we really want to achieve through this conversation is to figure out what people need to think about when they're going to tip. They receive the tip prompt, they're thinking about how much money they leave, why they're tipping, how they're tipping, et cetera.

What message do you have as someone in the service industry for people who kind of huff and puff a bit about tip culture and they're reluctant, what would you encourage them to think about when making that decision?

Sam: The way tip culture is here in North America or at least southern Ontario, there's a certain expectation of how much you're going to tip and your variance on that is reflective of what you feel like your experience there was. I don't think anyone should feel pressured to tip, but if you choose not to tip, you're making a statement about what your experience there was like with that server.

Bethan: Sam, that's great. Thank you. Lots of great things to think about there. So we really appreciate that and thank you very much for joining us on the podcast.

Sam: Thanks so much for having me on. Good job, guys. Thanks.

Cadeem: So our next guest is Mark, a Montreal restaurant owner. Hi, thank you for joining us, Mark. Welcome.

Mark Cohen: Yeah, thanks for having me.

Bethan: Tell us a bit about your experience then, as a restaurant owner and sort of your approach to staff wages and tipping and kind of what you do in your restaurants.

Mark: Yeah, it's complicated. So we decided to go with the no tipping model during the pandemic, which I guess is a time that a lot of people changed how they do things. We were operating Larry's, one of the restaurants, like through the pandemic and doing takeout, and obviously you don't need many front of house staff to do a takeout operation.

So there were days when we had just one person in the front, like answering the phone and taking orders and then still a full team in the kitchen preparing the food because it was still quite busy. People were still tipping and sometimes tipping even more because they felt like it was an industry that needed supporting.

So I think if we hadn't have sort of reworked how we do that, that one person who was working in front of house would be a millionaire in a week, and then everyone else in the kitchen is still earning their like 16, $17 an hour or whatever. So that didn't make any sense.

I think actually what we did is we raised all the kitchen wages because we had like wage subsidies and stuff, so we made sure the kitchen were earning more and then the front of house tips were split. Once you start paying people more, it's a bit difficult to go back.

So after the pandemic, when the pandemic was winding down, we were kind of like, okay, we need to rethink this because we don't want to put everyone back to their old wage. So, yeah, it was something that I guess we had been thinking a bit about for trying to figure out a way to address that front of house back of house wage discrepancy. So there has to be another way to do it.

And yeah, that was to just get rid of tipping altogether. We sort of added 20% to all of our prices and then paid the kitchen much more than I did before and sort of negotiated hourly rates with all the front of house stuff. It should be said that during the pandemic we had very few front of house stuff. It was a time when lots of people sort of left the industry or just weren't working and weren't sure if they were going to come back.

So it was a much easier negotiation than if we had been sort of running at full capacity and then had to have that conversation with 50 people. Everyone was on board with it, with the reasoning behind why we wanted to move to that system.

There's not really any getting away from the fact that most of the front of house earn less money now than they would have before. It's a negative sum game, really, because we actually forego this. Like the government offers like a tip tax credit where basically all the contributions that you pay on wages, like you pay a certain amount, a percentage on all the wages that you pay. And the government recognizes that you, as the business owner, didn't necessarily want to pay the front of house as much as they were making because most of that is tips that are not coming from you. So they refund a large portion of those contributions.

So every year we were getting like a check for $80,000 from the government, which always came at a pretty needy time for us and there's just no way around that. We just kiss that goodbye. So there's actually less money to go around than there was before, but it's much more evenly distributed.

Cadeem: And then being a business owner yourself, I was wondering if you're possibly able to offer your opinion on basically bigger prompts for takeout. I see a trend of fast food places and restaurants asking for higher prompts, like 18%, 20% for takeout. Do you have an opinion on that you'd like to share with us?

Mark: I don't know. It's sometimes confusing when you're asked to tip on something that you're not used to tipping on. Right. You don't know how much that person is getting paid. Are they getting paid an hourly rate that's relying on people tipping 18%? In which case, sure, like, I'll tip 18% on takeout.

But if they're just like, making it so the credit card machine offers that with the hope that people add extra, then you don't really want to pay, like, an extra 18%. But obviously you can't ask that. But, yeah, it's a bit confusing. Like, you just don't know what people's baselines are.

So, yeah, I think during the pandemic, people were tipping extra for people that were sort of on the front line and potentially being exposed to COVID, and that sort of has carried on up. It's a bit of a hangover from that.

Cadeem: I'm wondering, Mark, if you've basically what's the most extreme example of a tip creep, as they call it, being asked at more places that you've encountered personally? So what's the most unusual place that you've been prompted for a tip at?

Mark: I mean, I find it weird, like, when you go to a bakery, buy a loaf of bread, and then there's a tip option on the machine because I don't know, it's just not how I'm used to that service working. I'm assuming that people are earning a normal wage for working in a store, but then, yeah, when you're presented with the option, you don't want to say no, you don't want to be mean, and it's like, not that much money, but it's also.

Cadeem: The principle.

Mark: Yeah. It's just unclear to me whether, okay, are we all doing that now? Like, those people earning less money, and then we're supposed to tip? Are we tipping for service? Yeah, I just find it gets confusing.

Bethan: Do you think as well that that could have maybe a detrimental impact on a service industry, like the restaurant industry? Because people may have we have all these tip words but tip fatigue.

If they don't want to tip in the bakery, they don't want to tip it for coffee, maybe then they go to the restaurant and they think, oh, I don't want to tip again, whereas actually you are tipping for a service. There, someone's bringing food to you, hopefully giving you a good experience. Do you think it could kind of feed over into negative experience at restaurants?

Mark: It could do, yeah. Some people are sick of tipping. For us, it's nice that that's just out of the question now. I think that's part of what's uncomfortable about tipping is there are all these factors that are beyond the employees control that are defining how much money they take home at the end of the day.

So, yeah, if somebody has tip fatigue or if they're in a bad mood or if their food took longer than they wanted it to. The thing that defines how much people leave as a tip more than anything else is just if you are the kind of person that leaves a good tip or not, the rest of it doesn't matter that much.

And yeah, you have no control over that as a server. You have no control over if the food took a long time that's the kitchen. So it just doesn't really make any sense to me. There's also this sort of awkward moment when you bring the card reader to the table and you punch in the amount and then you're sort of like standing there waiting to see how much you're going to get paid. I don't know. I think it's uncomfortable for servers and it's not how any other industry works really.

Bethan: Yeah, sure. So, yeah, I was just wondering when you made the decision to kind of move to no tip, obviously that meant that some of the front of house staff were perhaps paid less than they were before. So how did staff kind of receive that decision and how have they taken it?

Mark: So, yeah, the only way to get everyone on board was to look at how much people were earning before the pandemic their sort of like average hourly rate and offer them a fixed hourly rate that was approximate to what they were making before. Because we had a skeleton staff at that point, that meant sort of having a few fairly high earners.

But then, like a lot of restaurants where we had to hire like a bunch of new people as the pandemic died down and things were opening up. So then we were offering wages that I guess were less than like most of the people that were there before were earning more than the new hires.

Which also kind of makes sense because they've been there longer and generally more senior people earn more money, which is not something that was really applicable in the restaurant industry before. Like if you were a busser or it was your first serving job or you had been doing it for 20 years and know tons about wine, you're all earning like minimum wage plus tips. Your pay didn't reflect your experience.

So now we're onto a model where, yeah, we have some people that are on quite high hourly rates, and they're people that have been here a long time or have a lot of experience or have specialized knowledge in wine. And they're sort of surrounded by students looking for a part time job for the summer or people who are just looking to get into the industry who will earn considerably less.

Bethan: Yeah, you said to achieve that you raised the prices of everything by 20%, I think?

Mark: Yeah.

Bethan: How did customers receive that? Do you find that anything's changed?

Mark: Not really. I think we raised our prices by 20% around the same time that every restaurant raised their prices 20%, just because of inflation. We realized a few months ago that actually our prices are kind of the same as everyone else's prices, but we're paying everyone much more money, so we need to raise our prices again. So we just did another price increase.

So now yeah, now they look a bit more expensive, but it depends what you compare it to. Like, the prices of Lawrence, if you compare them to other well known fine dining restaurants in Montreal, then they're not really higher.

Lawrence now operates with a very small stuff, like, I cook on my own in the kitchen, which is by choice, but it also facilitates lower prices. Like, I don't have a whole crew of people in the kitchen. They're like two people in the front, me in the kitchen and a dishwasher. So we're like four people. So that means prices don't have to be super high at Larry's. Yeah, they're a bit higher than other sort of similar places. So you just have to make sure that it is clear to the customer when they're looking at the menu that the tips are included.

So I think initially we didn't do a great job of that. It's written on the menu, but people manage to not see things. So, like, 90% of the time, when you come with the bill and with the card reader, people are very confused that there's no tip option. Now the prices are a bit higher and we've made it much more prominent on the menu, so most people know and factor it in.

Cadeem: I was wondering as well, since Lawrence & Larry's are both pre established hotspots in Montreal, do you think that this sort of policy could work in kind of a less well established restaurant, too?

Mark: Yeah, I don't see why not. So far, no one else has taken it on. There was a lot of interest in it when we first did it and requests for interviews like this. Colleagues in the industry wanting to meet to talk about it because they were thinking about doing it, they really wanted to do it. So far, no one else has done it, which I think is probably largely because of that tip tax credit we were talking about, which you just have to swallow.

So it really depends on the situation. I think it might even be easier in less fine dining restaurants, because in fine dining restaurants, the servers are used to making a lot of money. Like, when you're getting 20% on a very high bill, then that's a lot of money. And if it's a more casual place, then your tips aren't that high to begin with. So it's probably a little bit easier to come up with an hourly rate that mirrors the tip wage.

The only regulation thing that I think would facilitate a move to more places doing going without tips would be some sort of replacement of that tip tax credit. I think that's the barrier. That's the only thing that you're really losing out on by changing.

Bethan: Yeah, I think it goes back to what you're used to in the culture as well. Kind of what you said at the start of this chat from the UK. You'd think maybe 10% or 15% is what you'd want to put down. And then I do find here that I'll go to pay for something and if the lowest is 20%, my brain does check.

But we've been talking about it a lot in the office, kind of in preparation for this episode, and we want to tip. We want to tip for good service. It's just kind of the increase has got people talking about it in terms of the increase in how much you tip, but also where we're seeing these prompts, one person actually said that they were prompted at the vet. Now, I'm not entirely sure why they were there, but that was an interesting one.

I mean, what do you think, as someone who you've worked in an industry that has typically used tips and relied on tips, have you prompted for that as a service like the vet? What do you think about that?

Mark: I mean, I was out of the vet yesterday, actually, and I find the whole experience is just like trying to reject as many advances for paying for things as possible. Okay, just saying no to that.

But yeah, I don't know. Is that then the operator of the vet is paying their staff less than they were before? Or is that a vet having a hard time hiring staff because there is still a sort of labor shortage and then they're able to say, well, it's like this much an hour plus tips. I guess it makes it a more attractive job.

They're the only two options I can think of. But, yeah, I wouldn't say for the vets. Yeah, I would draw a line of that, for sure.

Bethan: It's interesting because what I'm getting from this is that you don't know the story at the other end. So I think before you immediately hit no tip, or even before you just automatically hit 18% — or whatever your baseline is, 20%, 15 — it's hard because you don't know how well that server or that driver or whoever is being paid, and you don't know how that's going to top them up, what that means to them.

So you kind of have to think about that when you're making your decision as well, which I'm not sure people really do. I don't know.

Mark: No, they definitely don't. But yeah, again, that's one of the nice things about just removing it completely is like, you don't have to think about that as the customer. You don't have that moment at the end of your meal where you're like, what did I think of the service today? Was it worth 20% extra? Were there any issues with it. I wonder how much this person's making.

Somebody knows the condition that all the staff are working under and that's the employer. I feel like they should be the ones to make that decision of how much that or, like, you're having a negotiation with somebody, they can tell you, this is how much I need to earn.

Or you can tell them, this is how much I can afford to pay. You don't need a third person who is completely in the dark about the industry. This specific person, their skill set, inflation, cost of ingredients. And I don't think they should need to think about that.

That shouldn't be part of when you go to a store and buy a shirt, you don't have to think about whether that person selling you the shirt, how much they're earning, how much should they earn, how much is this transaction worth. To me, it's just like, this is how much the shirt costs. They've figured out all the costs associated with it.

One of those is labor. Either I'll buy the shirt or I won't buy the shirt. You can't say, like, I'll buy the shirt, but actually that last 20% of the price of the shirt, I only really want to pay like, 10% of that. You either buy it or you don't buy it.

So you look at the menu and you can come to this restaurant. Those are the prices, everything's included. Can decide to come or you can decide to not come, but either way, the staff needs to get paid.

The other thing is just like, wage stability. Some of the front of house are earning less than they were before, but they know how much they're going to make. We're a restaurant that's busy sometimes and not busy other times, and the staff have to be there either way. If there's a snowstorm and, like, the restaurant's empty, that's not the staff's fault. Like, they shouldn't then not make any money.

We, as the employer, like, we're the ones that have to sort of take that gamble and make an average wage that will be based on busy days and slow days.

Cadeem: So just when we've been talking about the issue of exceeding these tip prompts and you're trying to look at what the possible costs are, so I think some things you've touched on the main ones. You're looking at possible issues of staffing costs.

And do you also think that issue of this something else you mentioned for the Uber thing is looking at maybe the cost of things such as ingredients or simple inflation? Do you think that seeing the rise of the tip prompts could be due to trying to compensate for higher costs?

Mark: Yeah, I think so. It's non-transparent pricing, really. It's a way to raise prices without it being visible. Yeah.

Cadeem: All right, thank you very much. I think this is a great discussion. Thank you so much for your time, Mark.

Mark: Thanks for having me.

Bethan: All right, so that was a lot to take in. Lots of good stuff there. I mean, Cadeem, what did you take away from that conversation with Sam?

Cadeem: We'll say a decent amount, but I think what actually stood out to me most was a budgeting strategy, like not ever working in server myself, looking at his salary or his tips kind of monthly, because it creates a more consistent, basically, basis for saving and investing and so forth.

I kind of never thought of that. I guess because of the nature of it, you just never know. One week could be a bad week. But I think he says roughly months tend to balance out a little better and can create more stability.

Bethan: Yeah, I thought that was interesting. The other thing that really stood out to me, I think, was his focus on the experience, which I like, because when I tip at a restaurant, it's because, or I want it to be because the service was excellent and I want to say thank you. It’s an extra.

I think that ties into this wider conversation of why people are kind of a bit mad about tipping at the moment, which is when you get that automatic prompt when you're buying a bottle of water at the corner shop. Where was that excellent service? How did that change my life for the better? I picked it up from the fridge, I took it to the cashier, I paid $2. And do I need to add another 18% on top of that?

I don't think so, but I don't know. Tipping seems to have kind of moved in that direction in certain ways. But speaking to Sam, who is actually a server and is very focused on providing that excellent service, that's what I believe it's about. I don't know about you, Cadeem, but I feel quite strongly about that.

Cadeem: No, absolutely. I think, honestly, this episode kind of motivated me to take that in more, like looking at why am I tipping as opposed to just giving in to the prompts. Something coming from a server kind of gives me more confidence to reject those prompts when I don't see them as adding value and I don't see them as being worthy.

Bethan: Yeah, I mean, an interesting thing happened to me once. This was sort of not during COVID but in that post COVID period. I went to a brewery here in Toronto, and they couldn't sit my party inside, but they said, we'll give you, serve your pint at the bar, and then you can take that outside. And we've got picnic tables bearing in mind that it was winter, so we're all wrapped up in our winter coats, et cetera.

And several members of my party at that point didn't tip because they felt that it was just a quick drink, quick stop. We sat outside. Yeah. I don't know their thoughts behind why they did or didn't tip. I did tip I think we hit the sort of 15% on the first prompt. And after that, unfortunately, we were approached by a server in the bar who essentially said, you didn't tip, you didn't tip, you didn't tip. And your tip was measly.

Cadeem: Wow, they actually…?

Bethan: Yeah, they did. And we were all shocked. We were shocked. And it's not a group of people that don't tip. We all tip when we go out for restaurants. But there was, I think there it's kind of like the service wasn't made. Now we've had this discussion and I've thought about it a bit more. It kind of proves that you don't know what's going on behind the scenes.

So I don't know how much that server was being paid. I don't know how much they relied on a tip, even if it's just for a quick drink to help them make their rent each month. So, yeah, we really don't know the full picture.

So I know we talked about it when we were chatting with Sam and Mark, but I think these conversations have made me think about what's in a tip and kind of why you should do it. So, yeah, it's definitely something to consider. But that kind of scared me.

Cadeem: Yeah, no, that definitely sounds rattling because I guess even sometimes, if it's justified, I guess when you get called out on it like that, it can definitely throw you off. And I feel like that doesn't actually motivate you to and then now it's like, should we still be feeling as guilty?

Should it still be a consumer's responsibility in that sense? If there's an issue of how the pay is distributed, should the onus be put on the consumer for that? Because I think even Mark as a business owner…

Bethan: Yeah, it's this idea of kind of offloading responsibility onto us.

Cadeem: I also want to look at, because I think Mark had touched on the government credit that is business guests, which I believe is a provincial one. And so for a business over the year, you said about $80,000, and you look at that and that's kind of like government incentive, in a sense, to have a tipping system.

Bethan: So do you think you could live the server life?

Cadeem: No, I personally don't. I mean, I definitely I think I always respect the servers, in a sense, like doing tech support for a bit. You get like the customer service side and understand how much that can be tough dealing with people at times.

So I definitely get that piece. But I think at least doing tech support, I had like a steady paycheck, which was definitely one bit of stress off. And that's the thing, I get that. I got that paycheck whether days were busy or not. I think it's just needing to kind of rely on how people are coming into the business directly affecting your monthly budget. I think it's definitely a bit too stressful for me.

Bethan: I think I would very much vet the employer if I was in a position where I was able to do that if I desperately needed work, then perhaps you just go for it. But if you could look at how they were providing tips and if you thought that was fair and kind of what your wage is going to look like and kind of figure out some sort of budget based on expectations, then yes, sure.

But if you're going in blind and you're not sure if one week you're going to get $50 in tips and the next week you'll get 400, then that's a little tricky to manage. I think 100%. But if I take that back to my story about at the brewery and the 15% tip, I do feel like that server was stressed.

But there was obviously other issues at play there and that kind of ties in. What we're talking about, that perhaps they don't get paid enough. Or there are certain things where they're super fed up, they're in debt, they can't afford their gas to get to work, they can't afford their rent, then they don't get tips and their wage is super low. I would be pretty mad about that too.

Cadeem: And again, that's a question of but should that be on the consumer or should the business just be paying them more? Exactly. Because even Mark had mentioned, I think, charge customers more to get around inflated costs. So, yeah, again, it shouldn’t be the consumer's problem.

Bethan: If you like this episode, be sure to subscribe rate and review us on Apple, Spotify or wherever you're listening to this podcast.

Cadeem: Special thanks to executive producer Samantha Eamon and producers Kevin Hamilton, Shane Murphy, James Madison and technical producers Muhammad Tabish. This episode was edited by Lead Podcasting. Until next time.