Posted by & filed under Financial Reporting and Analysis, Student life.

Description: Are tip amounts in Canada rising? Some customers are perhaps experiencing sticker shock when their servers hand them a payment unit with tip option buttons of 20%, 25%, or even 30% after tax, when the traditional standard has been 15% pre-taxes. In the face of this ‘tip fatigue,” some restaurants, such as Folke’s in Vancouver, are simply raising prices high enough to pay employees better wages, canning the tip option. According to pollster Angus Reid, 59% of Canadians would like to see all-inclusive pricing when we dine out, but only 2% of restaurants are there already, perhaps fearing a competitive disadvantage on the pricing side until everyone joins the party.

Date:  February 23, 2023



Discussion points:

1) How do your friends and classmates feel about tipping? (Perhaps try an in-class survey or discussion.)

2) Have you ever worked at a job where you depended upon tips? Did this alter your own tipping-behaviour?

3) Chapter 1 of Wiley’s Understanding Financial Accounting introduces us to the typical financial statements of a corporation. Which lines in the income statement would likely change the most dramatically for a restaurant that moved to an all-inclusive pricing model from a tipping model?

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