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HomeNationalCanada's tipping culture is flawed and there's no clear solution in sight:...

Canada’s tipping culture is flawed and there’s no clear solution in sight: expertsTAZAA News

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1:53:00Full Episode: What’s Your Tip Story?

From oil changes to take-out food, the “tip nudge” has quickly become a “well-established social norm” in Canada, according to food economist Mike Van Masso.

Card payment machines have made it easier for businesses to prompt the gratuity option, even in industries where tipping was not previously a cost or part of the conversation. Data from Canadian trade associations shows the average percentage tip for restaurant dining has increased since the pandemic began.

Van Maso, a professor at the University of Guelph, is the hope for Canadians Increase the amount of their gratuities is out of control and has become a hot-button issue across the country.

“I went to my local craft brewery the other day, just to the bottle shop, to pick up two of my favorite cans,” Van Maso said. “While I was paying there, literally someone grabbed a beer from the fridge and handed it to me, and I was motivated to tip in that situation.”

He calls it a “double whammy” for consumers, with many businesses asking for tips while simultaneously raising their prices.

“You know, I wonder if I give a particularly good lecture, should I put a jar in the front of the lecture hall, and while they’re filing? Maybe they’ll put some bills in there. Me too. I mean, where does it stop?”

International alternative

Kate Malcolm moved from the UK to Port Perry, Ont., in 2017, where tipping is not common.

Even after five years, she says she still finds it difficult to come to grips with Canada’s tip culture.

“In England you wouldn’t pay $10, $20, $30 for a haircut,” she says. “It’s so expensive to have your hair done like that, and then have to tip it too? It’s such a foreign concept.”

Malcolm, who runs a podcast aimed at newcomers, included his reaction to Canada’s unwritten rules for gratuities. Tiktok video She describes “culture shock”.

Kate Malcolm is shown in a screenshot of a TikTok video she made describing her culture shock since coming to Canada from the UK at age 5.  In this shot it highlights Canada's tipping culture.
A screenshot of Kate Malcolm in a TikTok video featuring her reaction to Canada’s unwritten rules for gratuities. (Kate Malcolm/TikTok)

She says her parents were also unclear about what the expectations were for tipping in Canada when they first came to visit, which led to an awkward exchange at a restaurant.

“They just threw coins like $2s on the table and changed and said, ‘That’s all we do, right?’ I was devastated for it. I was doing it, and it was more humiliating than not doing it [tipping].”

Malcolm lived and worked as a server in Australia, where tipping is not even the norm.

She said her pay was much higher than in Canada, and she felt less pressure to be “super friendly” all the time, with no expectation to tip.

Some customers resented the tip prompt

A Dow Bakeshop in Toronto added a gratuity option to its card machines after input from employees and customers.

Co-owner Oonagh Butterfield said they always had a cash tip jar on the counter, but saw a significant increase in tips when customers were given the option of a debit or credit card.

“I’ve had signs since we implemented it that, frankly, said it was unexpected,” she said.

Headshot of Onagh Butterfield, co-owner of Dough Bakeshop in Toronto.
Oonagh Butterfield, co-owner of Dough Bakeshop in Toronto, said some customers resent being prompted for a tip, even with in-store signs saying tips are not expected. (Photo by Dylan Garage)

Butterfield said some customers are still questioning the electronic gratuity option, despite posting signs such as “Please press green to skip the tip option.”

“Sometimes there’s a little, I’d say, they’re like, ‘Do you want to tip?’ Also asked the question. Especially if they’re just buying bread, again, why would I try to communicate with people, it’s not necessary.”

While customers currently have a tipping option, Butterfield said she supports moving away from Canada’s current tipping culture, saying “everyone is guaranteed a living wage.”

Any tipping equates to inflated prices to provide staff with a living wage

In July 2020, Toronto’s Richmond Station restaurant stopped tipping, choosing instead to raise its prices to pay staff more.

Co-owner Carl Heinrich calls Canada’s tipping culture “a very disproportionate way to pay staff.”

The lockdown forced his business to start offering take-out — a service that historically didn’t generate many tips, he said.

“Anytime you edit someone’s salary or wages, their livelihood, a lot of communication is required,” Heinrich said. “Because there was no blueprint for this new system, there was a lot of work. And apparently, two years later, it still works.”

Headshot of Carl Heinrich, co-owner of Richmond Station Restaurant in Toronto, Ont.
Carl Heinrich is the co-owner of Richmond Station Restaurant in Toronto. He said they stopped tipping in July 2020. Instead, they chose to raise their prices to pay staff more. (Photo by Sarah Brownlee)

There is no single rate of living wage for staff at Richmond station. Pay varies depending on an individual’s performance, experience and location.

“Dishwashers are making a living. Servers are making a living wage. But certainly our best servers are paid more than our least experienced servers. That wasn’t possible under the previous system.”

In an ideal world, there would be no tip. It is a human rights disaster. But it is deeply rooted. I think we’re stuck with that.– Mark Mentzer, Business Professor, University of Saskatchewan

Aside from “very top end” restaurants, where customers may be less sensitive about how much they spend, University of Saskatchewan business professor Mark Mentzer says many businesses that replace tipping with service charges are not successful.

Customers like the illusion of having power over the server, and the server likes the illusion of controlling their own revenue, he added.

“In an ideal world, there would be no tipping. It’s a human rights disaster. But it’s deeply rooted. I think we’re stuck with it.”

Mark Mentzer pictured sitting at a table with a drink by his side.
Mark Mentzer is a professor at the Edwards School of Business at the University of Saskatchewan. The card reader for electronic payment has changed expectations about how much to tip, when to tip and for what, he says. (Submitted by Mark Mentzer)

Mentzer added that the hefty pre-programmed tip percentage options on chip card machines “can scare people into tipping a higher percentage than they previously thought possible.”

“Everyone complains about tipping, but given the choice between a restaurant with tipping and a restaurant with a service charge, I’m not sure how customers would make that choice. I think customers would actually prefer a tipping system if given the choice.”

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