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Why Is Tipping Everywhere You Checkout?

maxinomics.com

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Re: Why Is Tipping Everywhere You Checkout?

#131

Post by ulber »

lenzm wrote: post #41

> Deadweight loss happens when a person who is willing to pay more is charged less than the amount they're willing to pay. > Tom is willing to pay $6 for coffee and the shop only charges him $4, the deadweight loss is $2. That is a consumer surplus, not deadweight loss.

The argument the article makes is indeed a bit blunt.

The idea here is that tipping enables better price discrimination, which in turn allows a higher "quantity" of coffee to be produced. With coffee shops that "quantity" will translate to things like 1) higher density or 2) more attractive placement of coffee shops, both of which increase coffee consumption by making it easier to pick one up, or 3) higher quality (think small batch) coffee being produced, which increases the quantity of labor being sold in a cup.

I still don't enjoy this tipping culture, but the argument being made makes sense when you fill in the details.

Re: Why Is Tipping Everywhere You Checkout?

#132

Post by rebelos »

cammikebrown wrote: post #90
eatsyourtacos wrote: post #61

Earlier quoted context omitted.

>but most people tip fine. We tip out of guilt. I literally freaking hate it, and I'm starting to tip less and less and prices go up. Why should I tip you to pour me a drink? You are literally just doing your job. I don't call up my customers for a tip when I release an update to their program. I don't send them invoices with a TIP line and show how much 15, 18, 20% of the invoice is so they can add on to it. Tipping…

You literally don’t have to think about it. Just tip 20% every time you’re at a bar or restaurant. That’s it. It’s a way for us to make better money. If that 20% was included and hidden I know you wouldn’t care as much, but it makes it tougher for us to get legally paid as much. Did you even read the article?

Did you read his comment? His point is that this hidden costs system is grotesque. In fact, it is such a predatory tactic that it's either implicitly or explicitly outlawed in most parts of the developed world. It is also a convenient way to exploit many laborers beholden to tips, since a substantial part of their compensation is non-deterministic.

Re: Why Is Tipping Everywhere You Checkout?

#133

Post by willnonya »

The truth is that it's praying on the stupid.

I'll pay a tip for service, not for someone that poured coffee in a cup and handed to me.

The concern about price sensitivity is real but that doesn't mean rasing prices and getting rid of tipping can't be managed and successful. If there is a demand for the product then you communicate this to the customer. Dropping tipping and failing to communicate how it changes prices is simply asking to fail.

Re: Why Is Tipping Everywhere You Checkout?

#134

Post by willnonya »

lbriner wrote: post #54
maerF0x0 wrote: post #33

Some (many?) countries have demonstrated that no-tipping can work just fine. > makes them less competitive to any nearby coffeeshops that haven't raised prices Maybe I'm an outlier but for me I'm sick of the mental game of "Am I good member of society for the % I selected, and how much will my date judge me if I choose what used to be the norm -- 10%-15%... and am I the sucker if I choose a high amount while other pe…

It seems different in the US, where everyone is expected to tip as part of the overall price, like the article describes, and there is tipping Europe where the tip is not needed to boost the wage to an acceptable level but is simply to reward people who have gone above and beyond. In many restaurants in the UK, a "tip" is automatically included for large parties to reward the extra work required but can be removed on…

The solution seems clear, stop tipping...

Re: Why Is Tipping Everywhere You Checkout?

#135

Post by 3qz »

snowwrestler wrote: post #44

This is exactly how I think about tipping. I, and many friends and family, worked retail and food service jobs when we were young. Now I’m professionally successful and will not miss a couple extra bucks on a cup of coffee. So I’m happy to help boost the person serving it to me. I know it means way more to them than it does to me. This also explains why people (including me) get SO MAD if they find out that tips don’…

No post body was provided.

Re: Why Is Tipping Everywhere You Checkout?

#137

Post by no_wizard »

FalconSensei wrote: post #68
waynesonfire wrote: post #14

Earlier quoted context omitted.

The intent is not to reward a task. It's a nod of appreciation that there is even an employee that's willing to show up to work and service you. You give them a dollar. At least that's how I look at it. I'm not a fan either just articulating my attitude towards it.

> employee that's willing to show up to work and service you So you tip the cashier at the supermarket? They bag your groceries for you

I've noticed quite recently in the last 4-5 years that this isn't true anymore. More and more grocery stores I shop at expect you to bag your own groceries. Its been a wild shift in labor there to me.

When I was growing up I worked at a big box retail grocery and I don't remember ever having customers bag their own items unless it was self checkout (which was barely a thing and truly seemed relegated to simple checkouts).

Now the only place I don't have to actively bag my own things is Costco, which recently started heavily pushing their own self checkout (which, due to how items are sized there to be in bulk, makes things slow and awkward for the general public IMO).

This luxury is dying.

Re: Why Is Tipping Everywhere You Checkout?

#138

Post by strix_varius »

cammikebrown wrote: post #90
eatsyourtacos wrote: post #61

Earlier quoted context omitted.

>but most people tip fine. We tip out of guilt. I literally freaking hate it, and I'm starting to tip less and less and prices go up. Why should I tip you to pour me a drink? You are literally just doing your job. I don't call up my customers for a tip when I release an update to their program. I don't send them invoices with a TIP line and show how much 15, 18, 20% of the invoice is so they can add on to it. Tipping…

You literally don’t have to think about it. Just tip 20% every time you’re at a bar or restaurant. That’s it. It’s a way for us to make better money. If that 20% was included and hidden I know you wouldn’t care as much, but it makes it tougher for us to get legally paid as much. Did you even read the article?

> You literally don’t have to think about it. Just tip 20% every time you’re at a bar or restaurant.

It's interesting to me that two people can see the same statement from such different perspectives. To me, a statement like this shouts, "broken system!"

Imagine if the calculator program on your phone was always incorrect, but in the same way: it was always too low by 20%. And then someone told you, "you literally don't have to think about it. Just add 20% every time you use it. That's it." Would that sentence make sense to you?

Re: Why Is Tipping Everywhere You Checkout?

#139

Post by gs17 »

kdazzle wrote: post #118
soperj wrote: post #69

Earlier quoted context omitted.

I used to work shipping & receiving, where I got minimum wage, and didn't get a tip for anything. That's why I'm happy to let people working retail & food service jobs just do the work for their wage. See how that works?

People working in restaurants in the US have a lower minimum wage than the rest of the country. So letting them do their work for like $3/hr doesnt really cut it

This is a common misunderstanding. Tipped workers still make at least the full federal minimum wage no matter what, just their employer may not be paying more than $2.13 of it if tips are sufficient. It's still not exactly the same (and minimum wage being enough for anyone is a separate issue) but the fallback is the same minimum wage.

[0] https://www.dol.gov/general/topic/wages/wagestips

Re: Why Is Tipping Everywhere You Checkout?

#140

Post by falcolas »

mortenjorck wrote: post #114
maerF0x0 wrote: post #33

Some (many?) countries have demonstrated that no-tipping can work just fine. > makes them less competitive to any nearby coffeeshops that haven't raised prices Maybe I'm an outlier but for me I'm sick of the mental game of "Am I good member of society for the % I selected, and how much will my date judge me if I choose what used to be the norm -- 10%-15%... and am I the sucker if I choose a high amount while other pe…

> Some of you may be too young to realize but there has been tip % inflation that is when combined with price inflation the tip amount has grown geometrically This is the most annoying part of many point-of-sale systems at counter-service restaurants today. You tap your card/phone/watch, and are then presented with big buttons for say, 35%, 30%, and 28% (I'm exaggerating, but not by much). The "custom amount" button…

What bugs me is with some of the POS systems is that if you make a mistake with the custom tip amount, you have to restart the transaction (i.e. hand it back over to the cashier). It's aggravating.
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