MODERN RESTAURANT MANAGEMENT – CAKE on Tipping During the Holidays

To tip or not to tip? Those pondering the effects of their small contributions to restaurant wait staff should know that their tips add up. And as we enter the season of giving, the tipping habits of most Americans pay surprise you.

CAKE recently found that while the percentage of tips compared to total restaurant revenue on actual holidays can reach as high as 20 percent — which is three percent higher than normal days throughout the year – people actually tip seven percent less than normal during the holiday season in general. Whether it’s due to stress of the season remains to be proven, but tips throughout the month of December are down while tips on Thanksgiving, Christmas and New Year’s Day are up.

CAKE also crunched the numbers to find specific times that tip amounts were highest:

  • No matter what the season, people get more generous as the day goes on: Customers tip, on average, a whopping 21 percent more during dinner than lunch or breakfast. This difference is even higher during holiday season, reaching up to 29 percent.
  • Holiday tipping is on the rise: 2016 tipping has slightly increased (by 2 percent) over tipping during holidays in 2015. In fact, we examined 12 timeslots throughout the day and found that 60 percent of them showed an increase in tips over the same holiday timeslots in 2015.
  • And so is holiday spending: CAKE’s data shows that people spend about 5 percent more per transactions during the holidays, compared to other months.
  • And the later the service, the better the tip: during normal operations, after a low point at 4 – 5 p.m., tip percentages steadily increase every hour throughout the evening. By 10 p.m., tips have increased by 14 percent from the opening dinner hour.
  • The correlation between check sizes and tips isn’t what you think: We also looked to see whether there is a correlation between ticket size and tip percentage. Could it be that the more people eat and drink, the more they tip? We did find a correlation between ticket size and tip percentage – but only during evening service hours of 6 – 10 p.m. Apparently, a larger breakfast or lunch ticket doesn’t translate into bigger tips.
  • As a side note, take that Friday shift: Fridays are generally the best days for wait staff to earn the most, with tips amounting to about 16 percent of the total revenue.