To tip right, tip with cash

calendar iconNov 22, 2018


The essence of discretion, or cash, as the service industry knows it, carries with it a long history of restaurant-goers expressing their gratitude for good service with an immediate, direct and universal cash tip. Nowadays, 'service charge' has different meanings depending on what payment form you choose.

With cash, the waiter has the choice to pocket it or stick it into the restaurant tip jar to be distributed equally amongst the kitchen and floor staff. With electronic transactions, it's a different story.  

In the UK, Prime Minister Theresa May announced plans in October to restrict restaurants from keeping portions of the service charge discretely included in bills paid with electronic payment methods across the country. The announcement comes three years after a consultation which concluded that respondents are overwhelmingly in favor of waiters keeping tips. 

Cash tips are legally the property of staff. They can go straight to the person serving you or they can be pooled and shared out among staff - but they are not the property of the business.

Card tips are different - they currently belong to the owner of the restaurant who has no legal duty to hand any of them over to staff (although in practice many do).

The same applies to any service charge automatically added to a bill. How businesses decide to share these tips out varies widely. Some keep all the tips while some skim a percentage off the top. Others take a percentage to distribute to the back of house staff.

Read the original article from BBC here

In the US,  President Trump proposed a radical move in February this year to allow restaurants to pocket tips sparking outrage across the American service industry.

How hard will workers be hit by this rule? Using publicly available IRS, Bureau of Labor Statistics, and Census Bureau data, the Economic Policy Institute estimates that workers are likely to lose about $5.8bn in tips each year under the rule. That amounts to roughly $1,000 on average for each tipped worker, or between one and two weeks of earnings for many in the industry.  

Read the original article from the Guardian

After eating at a restaurant, how do you usually tip the waiter for good service?

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Last Updated: Nov 23, 2018