The Surprising Truth about Tipping

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Consumers may spend less money eating out during recessionary periods but that needn’t translate into smaller tips.


As a matter of fact, tipping may increase as a result of the down market, says Matt Wallaert, Lead Scientist at Thrive. “People seem to think tipping is a thank you but a lot of it is based on empathy,” says Wallaert.


The standard tip is 15%. At restaurants, like Banq in Boston, MA, the standard skews more towards to 20%.  “There was a time when there was a straight up 15% addition on the bill, when times were really good it increased to 18 to 20% and the service increased as people begin to tip more for service that was more knowledgeable about cuisine and wine,” says Michael Murphy, General Manager at Banq.


No surprise there. “You are more likely to see a 15% tip in suburban restaurants, in business areas there tends to be a 20% tip because the feeling is that’s the norm,” says Susan calendar, CEO of Protocol Principals.  Generally, “people hear 15% - 20% and there is some that will tune into the lower end or those that will tune into the 20%.”


Of course, “tipping is all about perception,” says Wallaert. “If people perceive the market as doing fairly well, I would expect that you might see tipping go down to people feeling like the waiter or waitress is no longer struggling,” says Wallaert. “In either case, we still perceive the service industry as having a lower income gap.”


That doesn’t mean an assembly-line worker out to celebrate at a fancy establishment has the same view as a still employed investment banker. “A big gap may not be perceived between consumer and the server and that’s going to push down the tipping,” says Wallaert. “ The waiter and waitress will appear very well dressed and your perception is that that they’re doing pretty well.”


That also doesn’t mean the tips and restaurants will be booming. “Going out is expensive and it might net loss for people because not a lot of people are going to go out to eat, says Wallaert. “Going out to eat is highly visual discretionary spending, it’s one of the first thing to fall off, which means less money for waiters and waitresses.”


Before you plan your next outing, take the tip into consideration. “You’re paying for service, you’re there for that entire experience, which includes dining and service,” says Calendar.  If you’re out to eat, whether you’re tipping high or low on the tipping scale remember: “It’s not worth it to withhold that from a service that works hard on your behalf.”

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