As tip amounts rise, many Canadians say they’d rather skip the tip — and some restaurants agree | CBC News

Customers intent on leaving tips at Vancouver’s Folke restaurant tend not to get very far. 

“They’ll hide it under napkins or under their plate,” said co-owner Pricilla Deo. “If we catch it while they’re still here, we just hand it back to them and politely remind them that we’re a no-tipping restaurant.”

When diners do make it out the door without tips being noticed, she says the money is used to fund staff dinners.

Folke introduced its no-tipping policy when the vegan restaurant opened in June 2022. Deo says employees earn well above minimum wage ($15.65 per hour in B.C.) and get full benefits. All overhead costs, including salaries, have already been factored into the menu prices, so customers simply pay the bill.

“It was really important to us to have an inclusive work environment where everyone was compensated fairly,” said Deo. “It’s not our customers’ responsibility to pay our staff properly. … It’s our responsibility to make sure that our staff are taken care of.”

It’s a concept that recent polls suggest many Canadians would like to see catch on, as inflation has led to higher menu prices (up 8.2 per cent higher in January compared to the previous year), and diners say they feel pressured to dole out bigger tips. 

A new Angus Reid poll found that 59 per cent of Canadians surveyed would prefer an all-inclusive, no-tipping model where staff is paid a higher wage. 

More than three in five Canadians also said that over the past few years, they’ve been asked to tip more often and dole out larger tips.

The poll surveyed 1,610 adults online. For comparison purposes only, a probability sample of this size would carry a margin of error of plus or minus two percentage points, 19 times out of 20.

There’s also hard evidence that Canadians are shelling out more in tips. The average gratuity jumped from 16 to 20 per cent between Jan. 1, 2019, and Jan. 1, 2023, according to technology and payment services company Square, which says it counts hundreds of thousands of Canadian businesses as clients. 

What’s fuelling push for increased tips

Two big factors are driving customers to up their tips, suggests Marc Mentzer, an organizational behaviour professor at the University of Saskatchewan’s Edwards School of Business.

First, he says, the pandemic has generated sympathy for the hospitality industry which suffered big losses during lockdowns. 

Second, said Mentzer, the pre-programmed tip amounts on electronic credit and debit card readers may be goading some people into tipping more.

“There are percentages that are pre-programmed into the device,” said Mentzer, noting it can be awkward to navigate the self-select tip option. “Even more awkward if I have to ask the server, ‘How do I leave a non-standard tip?'”

WATCH | Some restaurants going tip-free: 

Some restaurants going ‘tip free’, opting to boost wages instead

Some restaurants are doing away with tipping to combat ‘tip fatigue’ amongst cash-strapped customers, opting to adjust menu prices and boost servers’ wages instead.

Back at Folke Restaurant, customer Anshul Bhandari said he’s noticed drastically higher tip-prompt amounts on card readers over the years. 

“It’s gone as crazy as … up to 30 per cent — even for take-out,” he said. “It’s not nice from a consumer point of view.”

Bhandari applauds the transparent, no-tipping model. So does customer Jason Yip. 

“I would prefer knowing exactly what the bill would be at the end of the day and also knowing that the server is getting paid a fair wage,” he said.

Tipping ingrained in Canadian culture 

Mentzer said he takes issue with tipping in general, because a server’s age, gender or race could affect how much they make in gratuities.

“It’s really a weird way of compensating people,” he said. “There are some serious issues of human rights.”

In several countries, such as Japan and Denmark, gratuities are not expected and the service is included in the bill. 

Even so, Mentzer said he believes tipping is here to stay in Canada, because it’s ingrained in our culture. 

Richard Alexander, the Atlantic vice-president of industry group Restaurants Canada echoes that thought. He estimates no more than two per cent of restaurants in the country have adopted the no-tipping model. 

“The gratuity is firmly established,” he said. “What we hear from consumers is they prefer to have the control.”

At Lazy Daisy’s Cafe in Toronto, customer Mike Stepko said he always leaves a tip, but wants the option to top it up — when warranted. 

“There are times where the service is pretty much outstanding,” he said. “That’s where you want to give 20 to 25 per cent. … I don’t think that should ever change.”

Another hurdle is that many restaurants may not be ready to shift to a no-tipping model, fearful of the consequences. 

Lazy Daisy’s owner, Dawn Chapman, supports such a model, but said she would only adopt it if it became the norm across Canada. That’s because, in order to boost wages, Chapman estimates she would have to raise menu prices by 20 per cent. 

“It’s too risky,” she said. “My worry is that people would come in and say I don’t wanna pay $15 for a breakfast sandwich. I’m gonna go to the place where I can pay $11 and choose a 10 per cent tip.”