Canada’s tipping culture is flawed and there’s no clear fix in sight: experts

Written by

1:53:00FULL EPISODE: What’s Your Tip Story?

From oil changes to take-out food, the “tip nudge” has quickly become a “well-established societal norm” in Canada, according to food economist Mike von Massow.

Card payment machines have made it easy for businesses to request a tipping option, even in industries where tipping was previously not part of the price or conversation. And data from Canadian industry associations shows that the average tip percentage for restaurant dining has increased since the pandemic began.

Von Massow, who is also a professor at the University of Guelph, says Canadians expect to increase the amount of their tip is spiraling out of control, and has become a hot-button issue across the country.

“I went to my local craft brewery the other day, just to the bottle shop, to pick up a few cans of my favorites,” von Massow said. “When I was paying there, someone literally grabbed beer out of the fridge and handed it to me, and I was asked to tip in that situation.”

He calls it a “double whammy” for consumers, with more companies asking for tips while raising their prices at the same time.

“You know, I’m starting to wonder if I give a particularly good lecture, should I put a jar at the front of the lecture hall at the end, and when they file? Maybe they could throw a few bills in there for me, too. I mean, where does it stop?”

International alternative

Kate Malcolm moved to Port Perry, Ont., in 2017 from Britain, where tipping is not common.

Five years later, she says she’s still struggling to get to grips with Canada’s tipping culture.

“There’s no way that in England you would give $10, $20, $30 to a hairdresser,” she said. “It’s so expensive to have your hair done the way it is, and then you also have to tip them? It’s such a foreign concept.”

Malcolm, who runs a podcast aimed at newcomers, included her reaction to Canada’s unwritten rules on tipping in a tik tok video outlines her “culture shock”.

Kate Malcolm is shown in a screenshot of a TikTok video she made detailing her culture shock since arriving in Canada, from the UK, aged 5.  In this shot, it highlights Canada's tipping culture.
A screenshot of Kate Malcolm in a TikTok video that includes her reaction to Canada’s unwritten rules on tipping. (Kate Malcolm/TikTok)

She says that when her parents first came to visit, they too were unclear about tipping expectations in Canada, which led to an awkward exchange at a restaurant.

“They kind of just threw coins on the table, like maybe $2 and change, and said, ‘That’s all we do, right?’ I cried for that, I think it’s probably more insulting than not doing it [tipping].”

Malcolm also lived and worked as a server in Australia, where tipping is also not the norm.

She said the pay was much higher than in Canada, and with no expectation of tipping, she felt less pressure to be “super friendly” all the time.

Some customers were outraged by the tip prompt

Dough Bakeshop in Toronto added a tipping option to its card machines after input from employees and customers.

Co-owner Oonagh Butterfield says they have always had a cash tip at the counter, but saw a significant increase in tipping when customers were given the option to do so by debit or credit card.

“I’ve had sign-ups since we implemented it, and I’ve been as clear as I can be, saying it’s not expected,” she said.

Main photo by Oonagh Butterfield, co-owner of Dough Bakeshop in Toronto, Ont.
Oonagh Butterfield, co-owner of Dough Bakeshop in Toronto, says some customers have shown outrage at being asked for a tip, even with signs in the shop saying no tips are expected. (Photo: Dylan Park)

Despite signage such as “to bypass the tip, please press green,” Butterfield says some customers still question the possibility of electronic tipping.

“Sometimes there’s a little bit of, I would say, outrage that they’re even asked the question, ‘do you want to tip?’ Especially if they’re just buying bread, which again is why I try to communicate to people that it’s not a necessity.”

Despite currently allowing customers to be tipped, Butterfield says she supports moving away from Canada’s current tipping culture “so everyone can be guaranteed a living wage.”

No gratuity equals prices raised to give staff a living wage

In July 2020, Toronto restaurant Richmond Station did away with tipping, opting instead to raise prices to pay staff more.

Co-owner Carl Heinrich calls Canada’s tipping culture “a very unequal way of paying staff.”

The shutdown forced his business to start offering takeout — historically a service that didn’t generate many tips, he says.

“Any time you’re editing someone’s salary or wages, their livelihood, there’s a lot of communication necessary,” Heinrich said. “Because there was no plan for this new system, there was a lot of work. And frankly, two years later, it’s still work.”

A headshot of Carl Heinrich, co-owner of the Richmond Station restaurant in Toronto, Ont.
Carl Heinrich is co-owner of the Richmond Station restaurant in Toronto. He says they did away with tips in July 2020. Instead, they chose to raise their prices to pay the staff more. (Photo by Sarah Brownlee)

There is no fixed rate of living wage for staff at Richmond Station. Salary varies depending on a person’s performance, experience and their position, he added.

“Dishwashers make a living. Servers make a living. But our best servers definitely get paid more than our least experienced servers. In the previous system, that wasn’t possible.”

In an ideal world there would be no tipping. It is a human rights disaster. But it’s just so deeply rooted. I think we’re stuck with that.– Marc Mentzer, Business Professor, University of Saskatchewan

Except for “very high-end” restaurants, where customers may not be as sensitive about how much they spend, says University of Saskatchewan business professor Marc Mentzer, many businesses that replace tipping with service charges fail.

Customers like the illusion of having power over the server, and the server likes the illusion of controlling the size of their own income, he adds.

“In an ideal world, there would be no tipping. It’s a human rights disaster. But it’s just so deeply entrenched. I think we’re stuck with it.”

Marc Mentzer imagined himself sitting at a table with a drink next to him.
Marc Mentzer is a professor at the University of Saskatchewan’s Edwards School of Business. He says that the card reader for electronic payment has changed expectations about how much to tip, when to tip and for what. (Posted by Marc Mentzer)

Powerful pre-programmed tip percentage options on smart card machines can “scare people into tipping a higher percentage than they might have ever considered before,” Mentzer added.

“Everyone complains about tipping, but given a choice between a restaurant with a tip and a restaurant with a service charge, I’m not sure how customers would make that choice. I think customers would actually prefer the tipping method if they were given the choice.”

About the author

Leave a Comment