Some Tips About Tipping

In this four-minute (or so) scene from an episode of Friends, Rachel, Ross, and Rachel’s dad go to dinner. All is somewhat okay until they get to the tip. Do take a look. As always, Friends is worth a watch:

https://www.youtube.com/watch?v=zmfdfiOWWts

While Friends shows us the economic side of tipping, first let’s see what is expected.

Tipping Behavior

Eater.com tells us that a 20 percent tip should be your restaurant default. From there they distinguish among different kinds of eating establishments. At bakeries, you need not leave extra. For food trucks too, you can forget the tip unless unless the order is large or you want to say a special thank you,

Restaurants and Bars

If you are deciding how much to leave, do consider whether to use a before or after tax total. Eater says either is okay.

It matters also if you have been comped for an item. The opinion at Eater is not to penalize the wait staff for a freebie. Do add it to the total.

The only thing that should take you below 20 percent–not even poor service–is pricey wine. If the wine is expensive, then they suggest that you recognize the service with an add on. It could be somewhere between 5 percent and 20 percent.

At bars, the gratuity is the same…20 percent. Why? You are occupying space for awhile and your bartender is doing more than you think.

Our Bottom Line: Social Norms and Free Riders

While I’ve touched only some tipping territory, it definitely is located in the heart of behavioral economics. As a social norm, the size of a tip depends on what we think we are expected to do. In the Friends episode, at 4 percent, Rachel’s dad was not observing the social norm.

Instead, an economist might say he was free riding. Not having paid his fair share of the tipping income of the wait staff, his tipping behavior depended on other more generous individuals (like Ross) to carry the responsibility. He was taking a “free ride” by paying less for the meal than was expected. Whether paying a check or doing work as a group, there always could be free riders who do less than their share.

My sources and more: Rather recently, the NY Times Travel Section and Eater took a look at tipping.