Valuing Human Capital - Do You Tip at Starbucks?
March 24, 2008
From the jump, allow me to reassure you that I am a pretty good tipper. Rarely when I get good service do I lay down the minimum 15%. Always more - that's me - gracious like the Dali Lama...
That said, one tipping situation gives me cause for pause. Do you tip at Starbucks? Even if you are
just dropping by for a brewed coffee?
Really? Even for a brewed coffee? Why don't you tip at McDonalds? Or at Taco Bell?
Apparently, the tips you are laying down at Starbucks are incorrectly going to support the rich lifestyles of Starbucks supervisors, if you believe a recent court decision in that always interesting state of California... From the LA Times:
"Starbucks got caught with its hand in the tip jar and was ordered Thursday to pay California baristas more than $100 million.
In a San Diego County class-action lawsuit, a judge ordered the coffee giant to pay back tips, with interest, that the company had handed over to shift supervisors. Some baristas could receive more than $10,000, according to their attorney.The ruling was met with cheers by California baristas. "I'm stoked," said Leekeisha Smith, who makes coffee drinks in the Starbucks at Sunset Boulevard and La Brea Avenue in Los Angeles.
Starbucks Corp. said it was outraged and vowed to appeal. In a statement, the company said the decision "is not only contrary to law, it is fundamentally unfair and beyond all common sense and reason.Money collected in tip jars was put into safes at each Starbucks and apportioned weekly to each employee based on the number of hours they worked, said attorney Terry Chapko, who represented the plaintiffs. The average tip distributed to baristas and supervisors was $1.71 an hour, San Diego County Superior Court Judge Patricia Cowett said.
Cowett's ruling said Starbucks' practice was a violation of a state law that prohibits managers and supervisors from sharing in employee tips. Her ruling Thursday on penalties followed her Feb. 28 decision in favor of the baristas in the class-action lawsuit."
From what I know about the restaurant industry, pooling tips is a common practice, but the real issue here seems to be classification. Who are the hourly workers? Can hourly workers be supervisors? My guess is that Starbucks crossed the invisible line based on classification issues that are, at least, indirectly related to that statute you know and love - FLSA....
Here's my take - I know who the supervisors are at the 3 Starbucks I frequent, and they seem to be very active from a service perspective. They work the register, they make drinks, they work the drive thru. They need a piece of the pie, whether it is tips, an advanced wage compared to the other workers, or some type of bonus plan. Since I don't know and can't seem to find out what they make on the base rate compared to other workers, I don't know if I support pulling tips from them. It all depends on the differential of what they make versus the barista...
As for the need to tip at Starbucks, I think I have figured it out. The tips are the grease in the system that prevents your local barista from treating you like you just special ordered a Whopper...
Can hourly workers be supervisors?
In California, indeed; many who may be considered "management" in other states are paid hourly--especially in retail.
Posted by: evil.HRISGuy | March 24, 2008 at 08:38 AM
"As for the need to tip at Starbucks, I think I have figured it out. The tips are the grease in the system that prevents your local barista from treating you like you just special ordered a Whopper..."
Great, now I need to bribe someone for a decent cup of joe.
Posted by: malcolmkass | March 24, 2008 at 01:56 PM
I think there may be something else going on here, Kris. Starbucks likes to present itself as an "enlightened" company that's the kind of place that Howard Schultz' dad would want to work at. My sense is that Starbucks tries to set itself apart from other fast-food companies in several ways. One is the "European café experience" which has not existed in any Starbucks I've ever visited. Another way is as the employer that treats people better. This may be a crack in the image. People who are treated better rarely mount class action suits.
Posted by: Wally Bock | March 24, 2008 at 03:10 PM
Kris, like you, I'm a pretty generous tipper. Not because I'm flush with bucks, but because I know that waiters and waitresses work hard and depend on tips to make a decent living. (I will stiff someone for exceptionally rude and indifferent "service').
The whole tipping thing with Starbucks and similar situations is off-putting to me.
Starbucks is not a European cafe experience nor is its coffee or ambience exceptional in any way. I do tip, though only to those who remember me, what I order (always for my wife--I don't drink Starbucks coffee), and who engage me in some way. My habit is usually to drop a few dollars in periodically; I don't feel compelled to leave something each time.
You've made me think more about this whole thing. What I realize is that, had Starbucks focused on exceptional coffee, genuine European style expresso makers requiring skilled and committed baristasl, and cafe ambience--I'd feel differently about tipping. But they chose to "brand" CDs, knick-knacks, and assorted "stuff", thus making it an ordinary retail experience. As a result, I see the baristas as cashiers.
Posted by: Steve Roesler | March 25, 2008 at 12:23 AM
Now of course I've got to be opposite - I am a tipper - I am the pain in the ass double tall skinny caramel latte drinker who wants the drink the right way (don't you forget about that extra shot of espresso!) AND I tend to remember where I came from - 20 years ago I was paying my way through school working at Baskin Robbins and the 19th hole of a local golf course and those tips made all the difference in me being able to really save some serious cash each summer. Especially the summer I knew I had to purchase that god forsaken $300 business law text the following fall!!
So tip your Barista - if you can afford a $5 coffee, is another $1 really going to break you?
Posted by: Kelly | March 25, 2008 at 06:11 AM
Wally/Steve - I get what you guys are saying about the ambience at Starbucks not really being special. I guess at your regular Stabucks, it's not the decor that I like, it's that for all the warts - cluttered floorplans, CD's in your face at every turn, the folks behind the counter do seem generally pleasant. So much so when I hit one in an airport that staffed with normal "talent", that's when its off putting for me.
Kelly - as for you, you've probally guilted me into tipping for my next cup of regualar brew - we'll see how long it lasts....
KD
Posted by: Kris Dunn | March 25, 2008 at 07:17 AM
Wally does have a point. However, this smells more like one barista going to an employment lawyer who heard "I work for S-BUCKS" and saw dollar signs. My verdict: it stinks.
Posted by: HR Wench | March 25, 2008 at 06:41 PM