Tipping culture in the USA

dsio · Sun. 9:55pm

DoctorEvil
How is it possible that someone can be paid below minimum wage? Isn't that illegal? Here in Australia there have been cases of restaurant owners and convenience store owners who have been prosecuted for "wage theft".

The way we handle wage theft now is quite solid, its an actual criminal offence and is treated more seriously than grand larceny as the amounts involved are often high and the impact on victims severe.

There was a case that gained some attention where a celebrity chef pilfered $7.8M from 515 staff and walked away with a relative slap on the wrist, now he'd be doing up to 10 years in the can under the new laws.

https://www.abc.net.au/news/2019-07...blishment-backpays-underpaid-workers/11320274

Archer · Mon. 9:41am

I much prefer places like Australia where tipping is just not a thing. Pay people a proper wage and be done with it.

It’s a very common practice that tips are pooled, then split. The owner takes a cut, plus the kitchen staff, and the wait staff. The servers often do not take home what they personally collect during a shift.

Lots of people are angry about the current trends in tipping, and may even refuse to tip. I understand the frustration. If you do this, just be aware that in many places the expected tips that servers are to collect are calculated based on the sales and are due to the management regardless of what the server actually collects from the customers. The servers “tip out” still has to be submitted, and if they don’t collect what they “should have” from diners they have to make it up out of their own pockets.

blufinz52 · Mon. 10:52am

I usually don't leave a tip on the receipt, but leave at least 20% in cash.

Makesbelieve · Mon. 1:51pm

I generally try to avoid these country comparisons as we all have our quirks but I was in New York last week with my 10 year old daughter (it was her first trip to The States) and it was interesting to see her reactions to the cultural differences between the US and our home country New Zealand, so I’ll share them here...

When it came to money she of course found tipping surreal “why don’t they just pay people properly”, but her biggest surprise came when she went to purchase a $120 jacket with $120 cash and they added the tax at the till instead of integrating it into the sticker price… she felt genuinely cheated. Then she went to another shop and found a T Shirt she wanted which only cost $20 and there was no tax added at the till… she was absolutely flummoxed, to the point where she wasn’t willing to spend her holiday money anymore.

I think more than anything it’s the lack of transparency that irks most tourists when they visit the US, but once you get the hang of it, and don’t ‘over think it’, as others have said, you’ll have a ball!

Archer · Mon. 2:01pm

Makesbelieve
but her biggest surprise came when she went to purchase a $120 jacket with $120 cash and they added the tax at the till instead of integrating it into the sticker price…

Many moons ago when the government of the day here in Canada changed the taxes, they told us there was a "hidden federal tax" that no one was really aware of, and therefore no government was able to be held accountable for it by the electorate. They said they were introducing a goods and service tax and that they would drop the unseen federal tax.

Of course the prices went up overall, because many companies simply saw not having that hidden federal tax as a extra revenue, and they didn't lower their prices.

In most provinces (all but one) there is a provincial sales tax as well. Some provinces harmonized the two taxes and some did not. Where I live it's 13% on every sale (except some essentials like groceries). It is deeply unpopular...

gatorcpa · Mon. 4:55pm

Makesbelieve
When it came to money she of course found tipping surreal “why don’t they just pay people properly”, but her biggest surprise came when she went to purchase a $120 jacket with $120 cash and they added the tax at the till instead of integrating it into the sticker price… she felt genuinely cheated. Then she went to another shop and found a T Shirt she wanted which only cost $20 and there was no tax added at the till… she was absolutely flummoxed, to the point where she wasn’t willing to spend her holiday money anymore.

What is important for tourists to understand is that there is no law that mandates including or not including sales tax in a price. So yes, it is not exactly transparent.

For example, if you buy an item at a national chain like McDonald’s or WalMart, the price for that item is going to be the same pretty much everywhere in the country, but the sales tax is going to vary depending on the location.

However, no one is required to do this and sometimes smaller businesses will include the tax and do the figuring themselves. Another place where the taxes are usually included in the price are theater tickets.

It’s a crazy system.
gatorcpa

adonalsium · Mon. 9:12pm

Faz
Minimum wage up here is $16.10/hour vs hotel/restaurant workers 12,90 $/hour. I struggle to understand $7.25/hour let alone $2.83/ hour??? Dare I ask if they get any benefits….

Politics.

And no, of course they don't get benefits.

Jakeys · Mon. 10:36pm

Archer
I much prefer places like Australia where tipping is just not a thing. Pay people a proper wage and be done with it.

You'll find Australians pretty much universally agree with you on this, we practically all think US tipping culture is absurd and vehemently oppose the unscrupulous businesses who occasionally try to introduce it here. Obviously America's system is fundamentally different and I get why tipping occurs there, but we don't want it here and culturally it will never be accepted.

The exception is that small businesses here sometimes have tip jars at the counter, but there's zero cultural expectation to use them and traditionally I think they were used to deposit spare coins more than anything else.

We do have a slight problem with payment surcharges here, but nothing on the level of tipping and it's being cracked down on by the Australian Reserve Bank this year anyway. Businesses will no longer be allowed to charge surcharges at the till, they'll have to bake them into their advertised pricing. Cash advocates are unhappy with this but considering cash payments represent something like 10% or less of transactions, I think the new system will be fairer for most Aussies.

Trev · Mon. 10:43pm

Many years ago there was some culture shock the first time I ordered pizzas in Aus. Happy speedy delivery guy drops them off and leaves before I could even give him a tip. "Oh..."

Evose · Tues. 9:18pm

I have no issue with tipping 20-25% when dining a finer restaurant - and I generally tip $5-10+ for delivery, regardless of the bill. And maybe this isn't a popular opinion, but I do have an issue with tipping when doing a pick-up orders. I'm routinely charged a 2% handing fee that isn't disclosed at POS during those orders.

I'm in the Chicagoland area and there was actually an incident where a restaurant owner aggressively chased down a non-tipper. It was all filmed and uploaded to social - the negative PR that followed isn't worth it.

I'll take a $20 meatball sub if it means I never have to look at another tip screen while buying fast food.

glownyc · Wed. 7:22am

DoctorEvil
That's the thing. I don't want to be "that person" who's a bad tipper. But equally, as a tourist I don't want to be taken advantage of. A waiter could tell me that I'm expected to add 20%-25% before tax and I wouldn't be any the wiser. In some countries, adding 10% could be fairly standard if one is tipping. It might even be considered generous. In Japan, it's actually considered rude to tip because they pride themselves on providing good service all the time.

I'm not a fan of the US tipping system. However when you travel you should research the local customs. Then you won't have to rely on someone else's word.

Tipping in Japan is not considered rude. That false rumor has been around for a long time. They don't have a widespread tipping culture so tipping can cause confusion or be refused because they don't have a system in place to accept it. While it's not mandatory or expected tipping happens at ryokans, hairdressers, at small independent counter service eateries some customers will very politely refuse their change.

glownyc · Wed. 7:28am

pdxleaf
It was born in the Jim Crow South era. In short, employers did not want to pay recently freed slaves the same wage as the white workers that did the same work.

The solution was low wages for all and adding tips for good service. Guess who got the tips?

That history is forgotten but the idea of paying employees as low a wage as possible has remained.

[Sar] We call keeping a poor underclass "freedom" and worth the trade for the opportunity to become a billionaire. [/sar]

I just tip 20%. When I travel to Europe, VAT makes up for any lack of tip.

Unfortunately it still has effect today. Studies show that servers of color are tipped less. As are women considered to be less attractive. It's one of the arguments for getting rid of tipping.

glownyc · Wed. 7:38am

Makesbelieve
I generally try to avoid these country comparisons as we all have our quirks but I was in New York last week with my 10 year old daughter (it was her first trip to The States) and it was interesting to see her reactions to the cultural differences between the US and our home country New Zealand, so I’ll share them here...

When it came to money she of course found tipping surreal “why don’t they just pay people properly”, but her biggest surprise came when she went to purchase a $120 jacket with $120 cash and they added the tax at the till instead of integrating it into the sticker price… she felt genuinely cheated. Then she went to another shop and found a T Shirt she wanted which only cost $20 and there was no tax added at the till… she was absolutely flummoxed, to the point where she wasn’t willing to spend her holiday money anymore.

I think more than anything it’s the lack of transparency that irks most tourists when they visit the US, but once you get the hang of it, and don’t ‘over think it’, as others have said, you’ll have a ball!

Clothing and footwear under $110 are exempt from New York City and NY State sales tax. This is where some advanced research could have saved some frustration.

pdxleaf · Wed. 7:46am

glownyc
Unfortunately it still has effect today. Studies show that servers of color are tipped less. As are women considered to be less attractive. It's one of the arguments for getting rid of tipping.

What?!! Impossible.

Yep, pretty good system, eh? Still working after all these years!

gatorcpa · Wed. 7:46am

Since it is tax deadline day in the U.S., here is a link to the clothing exemption from sales tax in New York State:

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/clothing_chart.htm

BTW, I didn’t know this until just now, but I don’t live in NY.

Most clothing purchases here in FL would be subject to sales tax, although we have limited tax “holidays” for back to school purchases.
gatorcpa

glownyc · Wed. 8:14am

gatorcpa
Since it is tax deadline day in the U.S., here is a link to the clothing exemption from sales tax in New York State:

https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/clothing_chart.htm

BTW, I didn’t know this until just now, but I don’t live in NY.

Most clothing purchases here in FL would be subject to sales tax, although we have limited tax “holidays” for back to school purchases.
gatorcpa

NYC used to have a back to school season clothing tax holiday. Sales would spike at Chanel, Gucci, etc. The $110 exemption replaced it so the benefit would go to the intended.

Makesbelieve · Wed. 8:36am

glownyc
Clothing and footwear under $110 are exempt from New York City and NY State sales tax. This is where some advanced research could have saved some frustration.

I’m not sure how many 10 year olds prepare for their trip to the US by doing ‘advanced research’ into the quagmire otherwise known as the American state Tax system… but I’ll encourage her to swat up before our next state side trip. Thanks for the tip.

pdxleaf · Wed. 9:04am

Makesbelieve
I’m not sure how many 10 year olds prepare for their trip to the US by doing ‘advanced research’ into the quagmire otherwise known as the American state Tax system… but I’ll encourage her to swat up before our next state side trip. Thanks for the tip.

No sales tax in Oregon. 😁

Great food too

blufinz52 · Wed. 9:11am

pdxleaf
No sales tax in Oregon. 😁

Great food too

No sales or income tax in NH.

Great people too 😉

Evitzee · Wed. 9:14am

pdxleaf
No sales tax in Oregon. 😁

Great food too

Good food, yes. But a whacking high income tax rate. In the end someone has to pay the freight to run the joint. Income tax, sales tax, real estate tax, other taxes, they are all in the cost of living mix of any location. Some places end up lower than others.

Tipping culture in the USA

dsio

Archer

blufinz52

Makesbelieve

Archer

gatorcpa

adonalsium

Jakeys

Trev

Evose

glownyc

glownyc

glownyc

pdxleaf

gatorcpa

glownyc

Makesbelieve

pdxleaf

blufinz52

Evitzee

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