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Thursday, April 22, 2010

Do you tip on alcohol?

I've been thinking about tipping a bit lately. "Galaboutmpls" got my mind moving with this interesting MNSpeak post on some tipping tips. But twice over the last week, I've been thinking specifically about alcohol, and the tipping conventions.

When I go to a bar and order a $5 beer, I don't hesitate to tip $1. That's 20% for nothing more than pouring a drink. If a beer is $3, I'll still tip $1. 33%.

When I go to a restaurant with my wife, and we buy a $35 bottle of wine that a server helped me select—and then pours throughout the meal—again, I don't hesitate. That'll be tipped as part of the meal, and that's generally 20%.

But twice over the past week, I've had bottles of wine that came with virtually no service.

The first time I ordered a Merlot, the server said that was one of her favorite wines, and then she came back to the table two minutes later to ask what I ordered. We had four people drinking, so the bottle was pretty much finished off in one visit. It was a $30 bottle.

Granted, adding a 20% tip was just $6, but it was such an easy $6 compared to the work it took to deliver two main course entrees. The entrees come with water, with coaching us through a menu, then taking an order, timing it, and delivering it properly. Again, just $6.

Last night I had a $26 bottle of wine that just sat on my table; I topped off my glass throughout the meal. It took a $40 dinner (for my wife and my two kids) and made it a $66 dinner. Essentially, escalating an $8 tip to $13.

Fine-dining restaurants with big wine bills are the ones that really make me think about this. If I get two bottles of wine and a round of cocktails, it's easy to spend $100-$150 on wine. Do you add a $20-$30 tip to that?

So what are we supposed to do? Should we tip on alcohol? Do you tip a lower percentage on alcohol compared to food? Have I turned into one of those nut-jobs who questions whether he's supposed to tip pre-tax or post-tax?

Posted on Thursday, April 22, 2010 in Permalink

Comments may be edited for length, clarity, or appropriateness.

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Comments, page 1 of 2 1 2 Next »
Apr 22, 2010 04:36 pm
 Posted by  Crystal

You presented a great scenario, Jason. I tip 20% standard (15% in the rare occasion service was poor). Since I don't typically order bottles of wine, I haven't given it much thought. However, my table may order 4 glasses of wine (equal to one bottle) and I'd still tip 20% (post-tax).

You know I'll be thinking of this next time I order alcohol!

Apr 22, 2010 06:42 pm
 Posted by  Gal About Mpls

Well, you know what I'm going to say...

If your server can't even remember what you've ordered, and doesn't pour the wine for you, I think you have a legitimate complaint. But an extra $5 to make someone smile doesn't seem like too much, does it?

Also, consider that your server has a)Probably tasted the wine and could tell you a thing or two about it and b)Would love to help you select a bottle if given the opportunity. The article I'm posting tomorrow is all about why we in the service industry LOVE what we do. I gathered quotes from many of my fellow wait-staff. Overwhelmingly, people said one of their favorite things about service is sharing their enthusiasm for food and wine, and passing some of that knowledge onto their guests. That is certainly the server you tip.

Apr 23, 2010 09:30 am
 Posted by  Jason DeRusha

I agree that when you're looking at raw numbers, and extra $5 is no big deal. But if we're talking about raw numbers, there's generally little difference between a 15% and a 20% tip. It's 5% right?

I kid.

But on an $80 night, 15% is $12. 20% is $16. Only four dollars. But a server notices that difference, right?

Apr 23, 2010 10:10 am
 Posted by  Dara

Well, I hate to be a big-foot here, but watch me go: You do have to tip on wine because: The IRS assumes you have tipped on it. Servers pay taxes on their gross receipts as reported by their employer in this state and many others. No matter if it's a $20 bottle that was served to you with great customer service, or a $10,000 bottle that was served with silent hostility, if you don't tip on it you're essentially taking money out of your server's pocket. As I say in my book "Drink This: Wine Made Simple" (nice plug!) if you can't afford the tip you can't afford the wine.

Also, for what it's worth, when I was a server (a very bad one, I'm embarrassed to say) we tended to look at the 15% or 20% tip as not reflective on us at all, but the customer's internal set-point. A lot of people tip 20% no matter what happens, and a lot of other ones tip 15% no matter what. When I was a server we'd notice less, or more, but anything in that middle I tended to not pay much attention to at all.

In any event, it's a great question and I appreciate your bringing it up!

Apr 23, 2010 10:28 am
 Posted by  Gal About Mpls

Dara, thanks for stickin' up for the service industry. It's true, the government does assume you've tipped on everything you've ordered however, they do not assume that you've received 20% of the net sold.

I'm straddling a line here between saying, "always tip" and "your server should earn it." I think we as a dining public deserve knowledgeable, astute service. It's one of my big goals to shine a spotlight on what's done well, and encourage better from those who give-a-you-know-what. But again, at least we're talking about it - that's a start!

Apr 23, 2010 11:01 am
 Posted by  Gal About Mpls

Oh and yes, a server ALWAYS notices the different between 15% and 20%, between someone who tips on the tax, and someone who carefully does not, and we definitely notice when someone doesn't tip on the wine.

Apr 23, 2010 12:28 pm
 Posted by  jane

Tip on wine. Figure in the extra 20% as you are looking at prices and deciding what to choose.

Apr 23, 2010 01:14 pm
 Posted by  Jason DeRusha

If I'm reading this IRS form correctly, the government assumes 8% of total receipts to be the reportable tip income. So if you tip less than 8%, you're taking money out of pocket.

Anyway, I always tip on booze, but I think it's interesting. Servers generally have to work much harder for the 20% they get on food, in my opinion.

Apr 23, 2010 01:15 pm
 Posted by  Jason DeRusha

This form: http://www.irs.gov/businesses/small/industries/article/0,,id=98401,00.html

Apr 24, 2010 02:11 pm
 Posted by  SW

There are some miscalculations going on here.

The IRS simply says that they expect at least 8% of sales to be DECLARED as taxable income. We need to understand that there is a difference between declared tips and taxable income.

Let's say that in 2010, one server works one hour, serves one table, and has a total of $100 in total sales (doesn't matter if it's wine, beer, Zima, or food). Assuming that the restaurant makes enough to qualify for federal minimum wage, the server is most likely paid $7.25 for the hour of labor.

For the sake of this argument, let's say only 8% is declared as tips by the server ($8 tip).

The total TAXABLE income for 2010 is $15.25 (hourly wage + "declared" tip). That doesn't mean they're paying $8 in taxes for their tip. All it means is that the gov will tax you on a percentage of the $15.25 (less deductions) depending on what tax bracket you fall into. So you could theoretically tip less than 8% (I wouldn't recommend it) and they would still be making money. It's important to understand the difference between taxable income and declared tips.

It's been my experience that even with the occasional customer who stiffs you, our tips will land between 10% - 20%. Essentially, the government is giving you a free pass on real income past the 8% mark. (Cooks, meanwhile, have 100% of their real income declared to the government).

Regarding the flat 20% tipping, I had two recent experiences that made me think about this: I went to Rinata on a busy night and was given incredible service by a bartender there. He patiently answered my questions about the beer and wine, checked on us frequently without being obtrusive, and worked hard to make us happy. Contrast this with a bartender I had at Nye's. He was too busy texting on his phone to notice that we wanted menus and our drinks were almost empty.

Should they both receive 20%? I used to think so, but don't feel that way anymore.

Thanks for the interesting discussion Jason!

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