The Tipping Point: Are We Ready to Move Beyond the Tipping Model?

Barista

Pint in hand, I joined my friends at their table at the Lescar, one of Sheffield’s many traditional pubs. Unsure of the business transaction I just concluded, I posed a question to the table. “What’s a good tip here?” After sharing a good laugh at the clueless American, one friend said, “Anything!” “So a quid [a dollar fifty] is a decent tip?” I asked. Eyes got round as one friend said, “Mate. You just made his week.”

The experience turned out to be educational for both parties. The idea that service industry workers could make a steady salary and live off their base pay was novel to me. For my English friends, the concept that customers should provide a large portion, if not the majority, of a server’s take-home wages was as foreign as American football.

As American coffee professionals have embraced European cup sizes and roasting styles, perhaps it should come as no surprise that some leading coffee thinkers are now questioning the way baristas earn income.

Should baristas the United States be able to earn their living through standard wages alone, or is the reliance on customer generosity a practice to keep around?

Does Tipping Inspire Better Service?

Alex Bernson, former editor of the popular website Barista Hustle, says, “In a nutshell, I don’t think your ability to pay rent should be dependent on a stranger’s review of your job performance.” Although Bernson concedes most baristas like leaving a shift with extra cash in their pocket, he says, “It’s an unreliable source of income.” Given the unreliability of tips, Bernson believes baristas should be paid a set, liveable wage by their employers.

The conventional wisdom behind tipping is that it incentivizes better service through the promise of financial reward. Customers tip when they receive service that meets their criteria, giving even more for an exceptional experience. Some have even posited that tipping inspires some sort of more personal connection between barista and customer.

Bernson, however, doubts that logic. “I think there are other ways to incentivize good service,” he says.

Although Bernson concedes most baristas like leaving a shift with extra cash in their pocket, he says, “It’s an unreliable source of income.”

Robbie Melton, manager of coffee quality at Nashville’s Barista Parlor, agrees. Tipping “is not really my motivator for working harder,” says Melton. “It’s the customer’s experience.”

In our pandemic era, holding tips over baristas’ heads to leverage a better customer experience may actually have the opposite effect as staff grow tired of feeling as if their professional value is fully dependent on how a customer feels (and tips) on any particular day. It’s this type of resentment that’s helping to drive the Great Resignation among all corners of foodservice.

The Dark Side of Tipping

Since 2010, a slew of studies have been conducted that point toward the same general conclusion: tipping culture has a racism problem. One glaring analysis from Eater showed that in restaurant settings:

  • White servers average $7.06 per hour in tips
  • Latino servers average $6.08 per hour
  • Black servers average $5.57 per hour
  • Asian servers average $4.77 per hour

Tips are also ripe for employer error or malfeasance, with unclear or deceptive distribution policies leading to many-a-posts on open forums about wage theft. These kinds of complaints pop in coffee industry groups from time to time as well.

Is America Ready for a Different System?

Melton is skeptical that America is ready to leave the tipping system behind. “When I see these conversations, I agree with the overall premise. But I do think that it’s so ingrained in our culture I don’t know if it would be possible to eliminate it,” he says. “If my total income could be achieved in a more consistent and reliable fashion that would be more favorable. But if I can get paid six to eight dollars more an hour, I’ll take it.”

Bernson, however, is optimistic that things could change. Eliminating tipping has been gaining traction in the service industry for several years. Restaurants as esteemed as New York’s Per Se and Napa Valley’s the French Laundry, both owned by Thomas Keller, refuse to take tips, opting to build their labor costs into the price of their food (though not without having to wade through legal disputes about how the now-built-in gratuity is distributed).

Many cocktail bars likewise have switched to charging a flat service charge rather than leaving gratuity up to the generosity of the customer. Some restaurants, often in response to minimum-wage hikes, have dropped tipping outright.

“American coffee service hasn’t changed in fifteen years, twenty years. I don’t think tipping will change with that model,” says Bernson. “Hand-in-hand with eliminating tipping is giving better service.”

Rather than conducting all customer interactions at the counter with a POS system, Bernson advocates for coffee shops offering table service, complete with hosts, bussers, and food runners.

Compared to the fast-food service model employed at most coffee shops, this system gives each customer more face time, more opportunities to make a purchase, and eliminates the abrasive custom of calling out drink orders. “People think that they’re paying for service by tipping,” says Bernson. By offering better hospitality without accepting tips, cafés can improve the customer’s experience and surpass their expectations. Bernson also sees a business incentive. “Guests would buy more if they didn’t feel they needed to tip a dollar each time,” he says.

4 Ways to Nix the Tip

Café owners, well acquainted with the small margins or the service industry, might wonder where the money to pay their baristas full salaries will come from. Berson makes four suggestions:

  1. A fixed service charge on top of the regular sale that acts as a standard tipped rate (15%, for example)
  2. Performance bonuses based on sales goals, both at the individual and group level
  3. Profit sharing, a great way to incentivize long-term retention
  4. Bonuses based on percentage of sales

“If you want to give a higher level of service, if you want to ask more of your employees, you need to pay them for it,” says Bernson.

While I was in England I never could bring myself to order a drink, coffee or otherwise, without leaving a tip. Perhaps it’s just my cultural conditioning, but I enjoy being able to tangibly express my gratitude for hospitality. But as a working barista with a family to support, I’ll gladly take the stability of a regular salary over the feast-or-famine of the tip jar any day.

This article was originally published on November 16, 2015 and has been updated and republished according to our current Fresh Cup standards.

Michael Butterworth is the cofounder of etkincoffee.com and thecoffeecompass.com. He lives in Istanbul, Turkey.