Oct 22, 2024
North Bay, Ontario  

“I guess we won’t be getting an Uber anytime soon!”

Can’t read the full email – click here for the online version.

We’re back in Canada and spent the weekend in and around Kingston, ON, visiting our daughter. As parents the world over often do; we indulged by frequenting a number of excellent culinary establishments.

I will say that it seems like the food scene in that city is much better than when I was a student at Queen’s. So many good choices, all serving really high-quality fare.

There is one particular difference, however, between restaurants in Canada (and the US) and Panama, where we have just been.

How and when, tips are requested.

Now it may be just me but there are 3 facets of this North American practice I find irksome.

1. The requested percentage is now starting at 15% to 18% and goes up from there. Some establishments are trying to begin even higher. 
    
2. This percentage is always calculated on the total bill, including any taxes. In Ontario, that means you are paying a tip on 13% of tax – which adds another 2% to your bill – putting the tip at an effective rate of 17% or more.
    
3. Lastly, why are we now being asked to tip for self-service? You order, pay and pick up at the same spot. Starbucks resisted this trend for a long while but seems to have succumbed. Then there was our experience at the Los Angeles airport. This one place had a fixed tip of 21%! But you had to order at the counter, pick up your order,  request your bill and pay it; all at the counter. Where was the service? Where tipping is optional, but you haven’t yet received your food, my thought is that if I don’t tip, my food may somehow be “spiked” by an incensed employee.

Am I alone in this thought? That tipping in North America has gone off the rails? Is this part and parcel of our current “Woke/Entitlement” agenda?

In Panama, for now, the practice is much different.

For one, the tip is only calculated in the actual food and drink bill amount. The tax is separate, and your tip is not being calculated on that additional amount.

Secondly, the starting point is 10% - which, I recall, was the practice in Canada and the US when I was younger. 

Thirdly, you are not asked to tip at any self-serve place. It just isn’t expected. 

This brings me back to the entire “entitlement” issue. We had decided to spend our last evening in Panama, dining on one of the best roof-top bar/restaurants in what is known as the Casco Viejo (Old Fortress) area. This is an older, colonial-era spit of land, just to the west of the Panama City banking center. 

Not long ago it was full of aging buildings filled with vagrants and squatters. But over the past 10 years, the area has seen significant gentrification with the addition of boutique hotels, shops and restaurants. 

It also happens to have the official residence of the President of the country.

This means that if any group wants to hold a protest, this is the area they like to head to. Not only can they appear in front of the presidential residence, but they can also effectively choke off all traffic and thus commerce to this region.

Which is exactly what happened on this particular evening where we were dining.

This particular protest consisted of 16 union groups of public-school teachers. They were lobbying for the usual. Higher wages, better conditions and no increase to the retirement age to which they could receive a pension. 

The protest was friendly with a party-like atmosphere, as many groups had drums and instruments. No question it was loud, and it blocked all traffic for a few hours. I felt sorry for the business. It looked like their reservations would not be arriving.

What does this mean for you and your business?

Well, for one, when they say, Location is often a principal factor in a business’ success, make sure you have assessed the spot where you want it located – if physical.

Secondly, make sure you have a list of your customers so you can alert them in advance of any event that might hinder your operation with some alternative options.

Lastly, examine your policies and procedures, beyond just tipping, to ensure you are not unduly annoying your customers and clients with all the negative possibilities that could entail to your business’ success and longevity. 

Until next week,

Stay healthy and focus on profit! 

- Hugh 
The “Profit Accelerator” Expert

P.S. Did you know that even tiny improvements of 1-3%, in just 12 fundamental areas of your business could give you 50% and more improvement to your bottom-line? Test out my brand-new Profit Acceleration Simulator^TM  and discover the true impact of a conservative estimate of Profit Acceleration initiatives on your business and see for yourself. (https://hughtafel.com/sim)

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