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Has tipping culture gotten out of control in Durango?

Customers sound off on increased gratuity percentages and counter service
Michael Clements, with Steamworks Brewing Co., assists Bill Hermesman, left, and Jay Hwang during the lunch hour Tuesday. As more establishments switch to a counter service model, customers have begun to ask why they are tipping for no service at all. (Jerry McBride/Durango Herald)

The 15% tip used to be the norm.

But recently, Durango restaurants have been pushing higher tip percentages ranging anywhere from 15% to 30%.

And as more establishments switch to a counter service model, customers have begun to ask why they are tipping for no service at all. Others question why tipping in restaurants is necessary in the first place.

“I really don’t think it should be my job to subsidize underpaid employees, particularly counter employees that are not doing more than a few button clicks to serve you,” said Durango resident Maria Megnia.

She is quick to point out that minimum wage – which is what many service workers earn before tips – is not necessarily a livable wage. Yet, it shouldn’t be up to customers and their tipping patterns to ensure service staff has a livable wage. She said the 20% tip was created to make up for servers being paid lower than minimum wage, which isn’t always the case now.

The state’s hourly minimum pay rate for servers who earn gratuities is $11.40.

Some customers say employee pay should be elevated and tipping should be eliminated altogether, a concept heavily used in European countries.

“I travel around the world a lot, including Europe. And it always amazes me how different the system is there,” said part-time Durango resident Nataly Rader. “Tipping is not required and not customary, simply because the staff gets paid a very fair rate.”

She said during her travel experiences as a photo journalist, some servers in other countries find it offensive to be tipped. Like Rader, she believes restaurant owners overly rely on customers’ tipping practices to ensure their employees have a livable wage.

A tablet at the counter of Bread Durango on Tuesday shows the tipping options. (Jerry McBride/Durango Herald)

“Why do I have to compensate for the greed of the owners of the establishment who do not pay hourly rates sufficient enough for the servers and the workers to be able to support themselves comfortably?” she asked.

Durango resident Thomas Williamson said the cost of food is increasing because of inflation and with that, the 15% gratuity is increasing in value.

“There is no justification for a higher percentage tip when the tip is already greater simply based on the increased cost of the food bought,” he said in an email to The Durango Herald.

In 2022, inflation caused many restaurant owners to cut down on the number of menu items offered. For example, Steamworks Brewing Co. did away with its Cajun broil.

But in addition to inflation, transportation costs have also hammered the restaurant industry in recent years. Higher gas prices were felt by restaurant owners receiving bulk food deliveries.

In 2022, the cost of a case of chicken wings shot up from $74 to $150.

But it appears inflation rates have leveled out this spring. The U.S. Bureau of Labor and Statistics shows that the inflation rate for April was at 3.4%, slightly above what is considered a modest rate and nowhere near the 8.4% inflation rate in 2022.

Despite that, there are other issues customers have with counter service tipping.

Some feel guilted into tipping when visiting establishments that use iPad point-of-sale systems. Especially, when it is for small items like buying a cup of coffee or a pastry at a café.

“You are essentially pressured to tip since the cashier is checking you out and watching your tip submission,” Williamson said.

Some say modern tipping practices have drifted away from the original point of tipping entirely. Tips, they say, are earned through quality service and not an entitlement.

Customers enjoy a lunch Tuesday at Steamworks Brewing Co. Peak Food & Beverage CEO Kris Oyler said it would be difficult to end the tipping culture in Durango and other places across the country. (Jerry McBride/Durango Herald)

Rader said service is often rushed because restaurants are trying to fit in as many reservations possible on busy nights.

But as the entire region of the state struggles with labor shortages, some feel more sympathetic toward restaurants asking for a higher tip percentages.

“It seems like we’re having such a hard time getting enough help in restaurants and shops these days – and that things are really tough economically for servers – so I’m tipping more than ever before,” said Durango resident Claire Raines. “Whether it’s the cashier at Bread, the person taking my order at Lola’s, or a server at a restaurant, I’m generally tipping 25% or more.”

In September 2023, Southwest Colorado’s unemployment rate was as low as 2.9%, meaning fewer willing applicants looking for work.

Tips are the main incentive for workers who apply for restaurant industry jobs. And with Durango’s single person livable wage sitting at just over $19 per hour, gratuities are one of the main ways workers in the industry reach livable wage levels.

“I feel that it’s the least I can do,” Raines said. “A dollar or two won't break me, but it might make a big difference in the life of someone struggling to make ends meet.”

Bayfield resident Jim Moore agreed with Raines’ sentiment, saying the service sector needs to be fixed.

“If I can’t afford to tip, I stay home and make food out of the fridge,” he said.

Josh Lenger with Steamworks Brewing Co. puts together a bill Tuesday for a customer. (Jerry McBride/Durango Herald)
Perspective from the industry

Pooling tips has become a popular trend in Durango restaurants.

Pooling occurs when tips from credit card transactions are dispersed throughout the entire restaurant staff rather than just the servers.

“It’s really the best way to try to even out some of the inequity and disparity between the front house and the back of the house,” said Peak Food & Beverage CEO Kris Oyler.

Peak oversees operations for Steamworks Brewing Co., El Moro Tavern and Homeslice Pizza. Oyler said up until early 2023, Peak was among the companies that paid its servers below minimum wage.

But now, the company starts its employees at minimum wage plus tips. And based on performance, employees consistently receive pay raises, Oyler said.

With the addition of tips, peak employees make anywhere from $21 to $35 per hour. The average employee makes about $26 per hour.

A handheld point-of-sale system is used Tuesday at Steamworks Brewing Co. The devices suggest tip amounts, but restaurant owners say their main purpose is to speed up transactions, meaning less waiting for customers. (Jerry McBride/Durango Herald)

Peak restaurants use table service models at Steamworks and El Moro and counter service at Homeslice.

Steamworks has also implemented handheld point-of-sale systems that offer the same tipping options as touch screen tablets used by counter service operations.

Oyler said those are used simply to speed up the customer payment process and keep them from waiting for prolonged periods of time when the restaurant is busy.

He said it would be difficult for restaurants to disallow tipping in favor of higher wages.

“It’s really hard to shift that mentality, both from a consumer standpoint and from the hospitality industry worker,” he said. “We’ve thought that’d be a great thing to do for years and years.”

But after looking at what restaurants have done in bigger cities like New York City with that model, it didn’t make sense for Oyler to pursue.

The main issue Oyler found was that to pay labor a much higher wage, it would reflect in the cost of each meal.

“A $15 hamburger becomes a $30 hamburger,” Oyler said.

For Peak, labor costs account for 25% to 40% of the business’ expenses. The company employs just under 300 restaurant workers with more during the summer months.

With the ability to make in the $20 range with tips, more employees are likely to have affordable living situations.

Paying a full wage and pooling tips tends to create better chemistry among restaurant employees as well as employee retention, Oyler said.

“We were getting way better quality kitchen staff, back of the house staff, than we used to get with the previous weight scale,” Oyler said.

Creating wages that workers can live on is something the company takes pride in, he said, and the only way the company can do it is by allowing tips.


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