If I Were Running A Company…Tipping

I’ll be honest, I thought tipping in the United States is paying extra for service that was provided. I always thought tipping is extra money for workers making your experience at the place great. Apparently, not so.

What I thought tipping is additional money for the worker, instead it is for customers making up the percentage of the worker’s pay. Of the ten years I have been tipping, I could of save thousands of dollars not tipping a percentage to a person who gave crappy service. This is worst than knowing Santa is not real (not really).

Why tipping is an issue is because recently, some cities are thinking of raising the minimum wage. Washington, D.C. (and the Maryland suburbs) passed a bill that will raise the minimum wage to $11.50, the highest in the country. Advocates for raising the minimum wage will say it will reduce poverty and some (if not most) will be above the poverty line, and better quality of choices to make. Opponents will say it will bankrupt businesses, hence not making hires and the prices of goods will increase significantly.

There are two things to determine this argument: goods and then services. If your business has the goods like the right clothing size or style, meat was cooked right for your liking, or something else, then you have repeating business customers. When the goods are there, then see if the service (customer service, bell hops, waiters, etc.) is there to help on a choice and they give you the respect for it. Customers like someone who they can relate to and know what you’re looking for.

The U.S. is unique in that we tip to make up one’s pay. In most European countries, service is added in the receipt. In Japan, tipping is not allowed; Japanese businesses demand great service from their employees. This goes back to the question for every business right now: do you want to make a profit or to be great?

Why businesses are hesitant to remove the tipping system is because most are penny savers. They assume low prices will attract more customers. The reason the majority of customers are going to a Walmart or McDonalds is because that’s the only choice they got. Most can’t go to a Macy’s, Whole Foods, or anywhere because their pay doesn’t allow them to. Now, you don’t have to do away the tipping system completely, but we shouldn’t call it tipping. We should call it “gifting” if the service is beyond what the customer(s) expected. Yes, people will have to pay extra at face value, but the burden of tipping goes away and customers will give at their own discretion.

I thought tipping was good for the soul. Instead, it’s the business version of Blackfish. Let’s abolish tipping and demand businesses to train their employees on how they want service to be done. It’s simple: if you have the goods and services, people will come frequently, not low prices.

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