It's been a while since I left some of my patented drivel here, but the tipping conversation drew me in a bit. I eat out more than any other person I know, probably to my financial detriment, so tipping is a bit close to home in the list of things I have to do on a daily basis.
Now, granted, why I eat out has its basis in a simple fact of laziness, sure. I can cook for myself, but I'd rather have someone cook for me and I'll pay for the kindness of the service. The other reason is the experience itself. It is nice to have people ask you if you want things, if you are happy with your meal, can I get you another cup of coffee, etc., even if you are paying for it.
Try getting that kind of service walking through a grocery or big box store. Shit, it's tough to get anything even remotely like that kind of service from someone who is making minimum wage.
Paradoxically, it is this fact that indicates that the tipping system in some way works and works well. While I disagree with the general idea that your entire ability to earn banks upon you not having the occasional bad day, I can't say that not paying a person more than a quarter of minimum, and relying on tips for the rest of a livable wage is an entirely bad idea based upon the results.
Think about it, when you sit down at the table, you are already in a subtle negotiation. Both sides have a very vested interest in making this cursory relationship work because both are there with the agenda of maximizing a desired outcome, which is helped by the fact that these outcomes are not at all mutually exclusive. You want to enjoy yourself having a good meal, and he/she wants you to leave a large tip. On both sides of this equation are possibility for stumbles.
If you are a rude or difficult customer, you run the risk of upsetting your wait staff to the point where they simply write you off as a potential good tip. This will often cause the wait staff to avoid coming to your table as often, or take their sweet old time bringing your food out. If you are a rude or difficult wait staffer, the customer may leave a bad tip, no tip at all, or may simply leave before you have the opportunity to serve them much at all. It is to the disadvantage of both parties to come to the negotiations with a poor attitude, thus it encourages pleasantness on both sides.
The problem with the arrangement is that you, as the customer, are last to act. Imagine the irritation a wait person has when they've done everything short of giving your knob a quick polish only to find that they've been waiting on Scrimply Q. Cheapskate and his/her as yet unbroken policy of tipping 5-10%. Some people just don't accept the idea that when they go out, they pay for the service as well as the meal.
My rules are quite simple when it comes to tipping.
10% is the barest, least, minimum you can tip without being a total jackass. If you can't afford it, then the next question you need to ask yourself is whether or not you should be eating out or saving money by eating at home. If you can sleep well at night knowing that no matter how good a customer you were and how good the wait staff was, you managed to fumble the ball at the last gasp with a tip in the single digits, then I don't know what to tell you.
10% for lackluster service? Well, knowing that $2.35 or thereabouts is all you can expect without tips in this business, makes it clear to most people that if you (provided you don't have a wait staff job) were supposed to make a living with that little and all it would take was a bad day to make it happen that a tip is required, if even a small one.
20% is generally good for average service. Some will say 15% is fair for average. But remember that we are negotiating here. If you are in a place you frequent, the 20% for average service often encourages the same quality of service (or better) for the next time you come in.
Generally, I try not to go past 30% for whatever reason. There has to be a limit. I'm not fortunate enough to be made of money and 1/3 the price of the meal is fair for even the best service.
Then there's the interesting question of the meal price being less than $10. A $2 tip for a $10 meal fits the math, but remember, you're being waited on just as much as if it was a $50 meal. Generally, if the meal is under $10, I kick the above at least 10% more for each level of service.
And for crissakes, don't nickel and dime. Decide what percentage you want to tip, figure it out, and round up. If there's so much as a penny left over in your calculations, round up.