Americans seem to prefer to leave enormous tips like this than pay more upfront

This image was removed due to legal reasons.

It seems most Americans would prefer the opportunity to leave enormous tips than have to pay more upfront, if two recent incidents say anything about the current state of tipping.

Jon Reed was serving a regular foursome at a Chuy's restaurant in Plano, Texas, when they noticed he seemed down. He told them he was stressed out because he was going to struggle to pay his rent, which was due the next day.

“They were like, ‘You look really tired man,’” Reed told local station Fox4. “I was like, ‘Well I've been working a lot.’ They were like, ‘Well how far behind are you?’ I was like, ‘Pretty far.’ And that's kind of the extent of the conversation I wanted to go through with them.”


When he went to pick up the check, he saw that, for this month, his rent problems would be taken care of: the foursome had left him a $700 tip, on a $40 tab.

This image was removed due to legal reasons.

“I literally went to the table and picked up the credit card receipt. And looked at it and literally dropped it and was shocked,” Reed said. “I just had a big smile, kind of teared up, watered up a little bit.”

Meanwhile, Joe's Crab Shack announced it would end its no-tipping experiment after seven months due to both server and customer outcry.


"Our customers and staff spoke very loudly [about the policy], and a lot of them voted with their feet," CEO Bob Merritt said on the company's earnings call May 4.

The company's internal research showed that almost 60% of the customers disliked it because they don't want to lose "control of the service" by taking away the incentive of a tip at the end. They also don't trust management to pass along higher prices to employees.


However, the no-tipping policy did apparently work at four locations, and it will remain in place there, Merritt said, so that the company can learn more about what made it successful.

Of course, many cities and states are making the argument academic by raising the minimum wage. A prominent restaurant owner in San Francisco also recently abandoned his no-tipping experiment after the city passed its $16 minimum wage.


"We were losing staff, servers mostly," Thad Vogler, owner of Trou Normand and Bar Agricole, told NPR. "We were continuing to hire young, new people, train them, and then they'd get the set of skills necessary, and they would generally give notice and move to other restaurants in our community who were still on a traditional tip economy."

Rob covers business, economics and the environment for Fusion. He previously worked at Business Insider. He grew up in Chicago.

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