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Here's A Tip......Don't Leave one, Or Expect One...... by Bill Roberts

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Services for Real Estate Pros with Brooks and Dunphy Real Estate DRE 00527512

Here's A Tip......Don't Leave one, Or Expect One

There is a trend beginning in the San Francisco Bay Area. Bars and

restaurants are adopting a NO TIPPING policy.
This has been brought about by the pressure for a $15 minimum

wage. Already California has a $9 minimum wage, but the Bay Area

cities have an even higher rate. San Francisco is at $11.05, but will

soon be $12.25. Other Bay Area cities are following suit. The race to

$15 is on.
So what are the bars and restaurants doing to survive in the face of this

wage escalation?

Higher Prices?

Simply put, they are raising prices. But they aren't just raising prices.

They are also adopting a NO TIPPING policy.
The higher prices are about the same as the existing prices PLUS the

expected gratuity. For example, a popular bar raised it's price of a

cocktail from $12 to $15 with NO TIP ALLOWED.
Period.
Good for them.
This is indeed a good direction for us to be going. People get paid for

what they do. They are not at the mercy of others to pay them. Others

that might not believe in tipping or even know that it is expected. They

get paid for what they do.
Many times, visitors from other cultures receive services when they

come here that they don't pay for. They don't know that the service

provider depends on tips for 50% or more of their income.. How much

better it would be if the price charged completely covered the wages

of the service provider.
I like it.
Let's change this right now.
Let's change it everywhere.
No more tips.
Just a fair price for the service  rendered.

Real Estate

And here is a real estate question:  Why is it worth twice as much

money to assist a buyer or seller with a $500,000.00 purchase than it

is with a $250,000.00 purchase?
The work is the same. The service provided should be the same. So

why do you want a tip?

Posted by

Please comment. All comments are greatly appreciated.

Bill Roberts

 

View William (Bill) Roberts's profile on LinkedIn

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Bill waiters and waitress are taking a pay cut at $15 an hour.  If a waiters or  waitress serviced just 4 table an hour with a small tip of $5 from each table, they have just lost $5.  I would say the average tip is higher than that so they really come out on the short end of the stick.  I thinking some form of a "tip" structure is a positive rather than a negative, and the service is bound to be much better as well.

By the way I am trying to picture you in an apron ...... LOL

Feb 20, 2015 04:34 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Well George, I've been there. I owned a pizza place for a while.

I'm sure that a lot of them will be taking a pay cut. But the problem is two-fold for restaurant owners:

1)  The higher wages are really putting them in a bind.

2)  They have "issues" concerning the relative pay for the front of the house vs. the pay for the back of the house. Cooks say they do all the work and the servers get all the money.

Higher wages for all and no tips helps more people than it hurts.

Bill Roberts

Feb 20, 2015 04:42 AM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Bill. I am an advocate of a free enterprise system and nothing mandatory. Wages should find their own level and all should be rewarded for good or great service.

Make it a great weekend!

Feb 20, 2015 10:00 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Hi Joe, Thanks for commenting. Yes, of course wages SHOULD find their own level. Unfortunately, the central planners among us think that they should determine wages (and everything else). We are stuck with this it seems.

In the mean time, small businesses are being squeezed to the point of going out of business.

Bill Roberts

Feb 20, 2015 11:01 PM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Bill

I will address the servers tip issues. My normal tips is 20% and will go up or down based on the service that I receive. So who is it that are deciding that servers should not receive a tip . . .  . my guess is that they where never a sever . . .  . and never worked for tips.

Good luck and success.

Lou Ludwig

Feb 22, 2015 05:08 AM
Anna Hatridge
R Gilliam Real Estate LLC - Farmington, MO
Missouri Realtor with R Gilliam Real Estate LLC

OK, Bill you are taking some heat on this one so I will share I have worked the tables and did well with tips, but that was before the taxation on estimated tips.   I don't mind if they put the tip into the cost of the meal or beverage. Probably a fair way to get everyone paid.  But it is my money and if someone goes way above the normal service for the establishment, I have the choice of giving a bonus to person who didn't scream when the child dumped the drink all over her shoes or when I walked right into her and stepped on her foot.

As for real estate services, I find it hard to believe than an agent in California would be willing to work for the fee most agents receive in Missouri. Property is a lot less expensive and if you work for a percentage....

Feb 22, 2015 06:03 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Lou, It seems that it is time for a little small business economics training. Most small restaurants MUST allocate about 15% of the sales dollar for ALL WAGES. This includes servers, busboys, cooks, dishwashers, hosts, and porters. Management is not included.

When wages go up, then the restaurant has the problem of how to survive in the face of these increases. It just isn't in the budget.

Now let's look at the other problem small restaurants have: servers are making as much as all the emplyees combined just with their tips. When their wages are added to this, they are getting more than everybody including the management and owners.

This is aa BIG problem. Everybody is upset. Why should one class of employees get so much while everybody else is asked to work hard for next to nothing?

The NO TIPPING solution allows the business owner to survive AND maintain peace within his workforce. It is BETTER for the cooks. He has more money for wages, maybe up to 30%.

No solution pleases everybody, but this one allows the business to survive and give raises to the back of the house.

BTW Nobody is suggesting that servers will be paid minimum wage.

Bill Roberts 

Feb 22, 2015 11:00 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Anna, Thank you. I think that you got the message.

When I started in real estate (40 years ago) I would not have been able to survive on straight commission. I needed to pay my bills before my first escrow closed. I went to work for a broker that understood this. He was able to get some really good sales people because he paid them from day one.

How many other really good people gave real estate a pass because they couldn't afford to wait to start getting paid? 

Bill Roberts

Feb 22, 2015 11:08 PM
Roy Kelley
Retired - Gaithersburg, MD

Thanks for sharing this very interesting situation. Higher wages are certainly needed for many workers who provide services we enjoy.

The downside is that some will not be dining out as often. Retirees can save much by eating and drinking at home.

Feb 22, 2015 11:24 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Hi Roy, If the total you pay is the same (price plus tip or higher price but no tip) it shouldn't affect the overall level of business.

Bill Roberts

Feb 23, 2015 12:17 AM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Bill

This will come down to the quality of the service the customer receives . . . . and if the restaurant raises their prices to cover the tips will the customers be willing to pay the higher price. Only time will tell.

Good luck and success.

Lou Ludwig

 

Feb 23, 2015 10:51 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Bill - It is true that servers get a substantial part of their income from tips.  It would make things a lot simpler.  And yes, in Europe, people don't depend on tips.

Feb 23, 2015 10:55 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Lou, Yes, Time will tell. But the trend is set. And if you are already leaving a sizable tip then the total price won't be going up.

Bill Roberts

Feb 23, 2015 10:09 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Grant, And when those Europeans come here they are NOT "programmed" to leave a tip. This new policy will level the field so that everybody pays the same.

Bill Roberts

Feb 23, 2015 10:12 PM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for the information. The tipping policy varies in different countries . Tourists from some countries may just leave a dollar as they are not aware of our tipping rates.

Mar 04, 2015 10:23 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Gita, exactly. We don't "educate" tourists on what is expected of them. The "no tipping" policy with the service charge baked in solves a lot of problems.

Bill Roberts

Mar 04, 2015 10:27 PM
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Great points here Bill, I am not in favor of either a minimum wage or an obligatory tipping system.  Both of these systems tend to penalize the achievers while rewarding mediocrity.

Mar 12, 2015 03:23 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Bob, Unfortunately we cannot opt out of minimum wage requirements. It is not our choice. The government (state and local) set the minimum wages that MUST be paid.

Bill Roberts

Mar 12, 2015 11:40 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Bill Roberts ~ I could live with a no tipping policy. Of course, I got used to it in Europe where the service charge was built into the price you paid. The biggest problem in Europe was that you just couldn't fire anyone for poor service and they got paid no matter what.

Mar 18, 2015 10:58 PM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Well Nina, you are absolutely right. I don't advocate that we adopt ALL the rules and regulations from Europe, just the No Tipping policy.

Bill Roberts

Mar 19, 2015 12:46 AM