derryX Rants: What happened to us, man? (Tip Jars)

Let me begin by saying that a society should not function based on my beliefs. It would be weird and awkward and could barely be considered functioning at all. Let me also say that any discussion below excludes points about waited service, which, if you’d like to comment on, well, start your own blog or something.

A buzz started last night when somebody I follow on twitter (RozinCPmentioned that, in her recent trip to Chipotle in Clifton Park, she was informed that tip jars have been outlawed in NY state. I chimed in with some of my broad opinions regarding this, as did Cute~Ella, and this led to a healthy discourse in 140 characters between three of us. Later in the evening, Times Union blogger, Kevin Marshall, bit onto the developing non-story and quickly debunked it, citing no further proof (probably was a good idea since he technically is a freelance writer whose writing ends up on the webpage of a news organization; people actually might listen to what he says). He later said he was going to berate the kid who made up the lie on his blog, which I can’t wait for and hope he wasn’t joking about.

Personally, whether such legislation were passed or not, it would not change my behavior. I do not place money in tip jars. Period.

I have many opinions as to why we shouldn’t be obligated to put money in a jar. The largest of which is that business overhead, including employee wages, should be incorporated into the price we pay for goods and services. The easiest example of this is Starbucks, which is notorious around the world for having unjustifyably high prices. A grande latte costs, on average, $3.50. Lets break that down, shall we?

A grande (16 oz) cafe latte at starbucks consists of two shots of espresso (2 oz) and steamed milk with a little foam (14 oz). Brewing two shots of espresso require approximately 30 grams (0.07 lbs) of espresso beans, which retail at Starbucks for $12.99/lb; assuming a 200% retail markup on their coffee beans, the coffee part of the latte costs them approximately $0.45. A quick google search led me to find that the average gallon of milk costs $3.50 (retail – worst case). 14 oz of milk (which also has water in the form of steam bubbled through it, but we won’t factor that in) corresponds to 1/10 of a gallon and costs approximately $0.35. Add $0.20 (a super padded number) for cup and lid, and, at most, a grande latte costs Starbucks $1 in materials to produce. [note that by the time they sell two grande lattes, they have enough money to make almost ten]

So what’s going on with the other $2.50 per latte? Well that money goes into running the business: maintaining equipment, utilities and fixtures, profit, and staffing. Multiply this by the number of drinks they sell in a day, and you have a real business!

A detail that shouldn’t have to matter is that Starbucks employees are, generally, known to start at higher salaries than other chains. I don’t have exact numbers and statistics, but I take that on faith. Regardless of this, being that this is America, in most cases, we choose our profession. At any point, given the opportunity (or not), an employee anywhere can pick up his or her stuff and say, “F This; I can do better elsewhere.”

How does this relate to the tip jars? Well, anywhere you go (and remember, this has nothing to do with waited service), the employees are paid by their employers at a wage that has been assessed to be appropriate for the profession in that particular geographic region.

So why do the tip jars exist on the counters everywhere you go? At some point, a generous patron must have decided that they want to provide additional compensation to an employee or group of employees for their satisfactory or stellar service. Handing the employee/s cash would be inappropriate and raise suspicion, so a small cup on the counter became customary. You now find these cups all over the place.

Back to my points…

Another large reservation that I have with the process is the distribution of the cash in the jar. Lets say you feel obligated to dump 50 cents into a tip cup. Presumably, your intent was to reward the service of the staff members who made your experience special. Lets say, however, that the tips get divided at the end of the day, and throughout that day, 10 employees, most of which you’ve never encountered, have rotated shifts. That means the particular person you intended to tip only gets 5 cents, which, seriously, lets face it, are you doing anyone a favor at that point?

Lets take another scenario, one which I believe can be likely in private businesses. Imagine that the tip cup is allowed to accumulate, and that, at the end of the cycle, the employer decides to not distribute the contents among staff, and rather incorporates it into the company income, or, worse, takes it themself. How would you feel about the money you put into the cup then? Drastic and should be illegal, I know, but, really, how do you know?

Also, think of what would happen if you tipped everyone you came in contact with (also drastic, i know). You go grocery shopping, 50 cents to the cashier. You get gas, 50 cents to the cashier. You pick up dinner, 50 cents to the cashier. You buy coffee and a cannoli, 50 cents to the cashier. At some point, logic has to prevail, and faith has to be placed in the wage and compensation system.

Here’s another point: face it, we all want extra compensation. Take me for example. Ok, I’m too easy. Take someone I work with, for example. They are actually prohibited from accepting gifts from their customers unless the gift consists of material items worth less than $50. US Postal Service workers have the same restriction (as covered in a past post), and the limit is $15. You think I, err my coworker wouldn’t want every one of their customers to compliment their service and reward them a $49.99 gift card to amazon.com? WE ALL DO!!! Imagine if I, err my coworker included a link to donate to their paypal account in their email footer just below the contact information. It’s inappropriate.

From my conversations with the baristas at Starbucks (which I didn’t mean to single out and pick on above, it made a good, easy example to break down) earlier today, they’ve heard of no such legislation, so the tip cups or tip jars or paypal links in the footers of emails are here to stay, and there’s really nothing to get excited over. However, lets start looking at what we’re doing; a concept that is rooted in a whole lot of good may not be everything we expect it to be.


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11 thoughts on “derryX Rants: What happened to us, man? (Tip Jars)

  • Cassie

    Imagine that the tip cup is allowed to accumulate, and that, at the end of the cycle, the employer decides to not distribute the contents among staff, and rather incorporates it into the company income, or, worse, takes it themself.

    That is, in fact, illegal in New York. Although I was incorrect in my earlier Tweet that it is up to the employees to decide if they want to do tip pooling (the law changed on Dec. 16, 2010), an employer can still not participate in tip pooling nor can they take any portion of the money.


  • Roz

    All of this drama because I bought a couple of tacos and wanted to put a buck in the tip jar!

    Good post and cost analysis, although we don’t know if the cashier was lying or if the manager lied to him.


  • Darth

    I never tip with the exception of waiters because I know they get paid lower wages. I find it ridiculous to have to tip a car valet driver for DOING HIS JOB! I have no pity on furniture delivery guys – they decided their profession damn well knowing they’d have to carry heavy items up several flights of stairs. I rarely drink Starbucks, but I never put money in the Dunkin Donuts tip cup. In fact – I make it a point to pay for a $1.89 cup of coffee with a credit card just so I don’t get any change back, so they don’t give me the evil stare when I put my change in my pocket and not in their stupid cup. As far as postal employees – I have a PO Box, so I am in no way required to give a tip. I pay to have my mail put in that box. Sometimes i’ll leave a card for them wishing them a happy holidays, but that’s it. My tax dollars pay them enough.


  • kriskaten

    using the example of starbucks in why tip jars are not reasonable may be off the mark.
    take for example an ice cream stand, like kurver, over the summer. often times, there are teenagers hired for the season working there. i can guarantee you they make minimum wage, or slightly above mw scooping ice cream in a hot building during the hottest months of the year. they deal with cranky kids, equally cranky parents who just waited on a long line, demanding and rude people all day long. they hustle to get all the customers served as quickly as possible while doing so in pretty uncomfortable surroundings. to me, these kids deserve that fifty cent tip.
    now, as for tip cups at dunkin donuts… if the extent of your service is you poured me a cup of coffee, i’m pretty sure i’m not leaving you a tip. however, someone who came in and ordered 8 different sandwiches and drinks for the office, maybe they want to leave the kids behind the counter a tip. who is nys, or anyone, to say they can’t?
    also, i’m pretty sure it’s illegal for a business owner to take the tips intended for the workers; there are many cases of this happening that get referred to the dept of labor. the business owners get in trouble.


    • derryX

      Good point about the kids at ice cream stands. I wrote this with the consideration that every employee in every profession at every location in the universe does their job, good or bad, in a satisfactory or stellar capacity. Feel free to tip whoever you want, but I’d rather the business owner pay them 5 cents more an hour than make me take the crap shoot of my tip making an impact on the kids’ bottom line.


  • Johnny Hustle

    I like tip jars. Especially at chipolte. I tip 5 bucks everytime I order from there. Who would I rather tip than someone making my food right in front of me? Chipolte has told employees not to even take tips, which I find strange. I leave 5 anyway.


  • Jeff

    I’ll occasionally drop a few bucks in a Tip Jar if it’s a place I frequently visit.



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