When it comes to clarity on tipping in the hospitality sector, the waters are murky to say the least. Recent research has highlighted that there is growing confusion related to tipping and service charges today. In most cases, diners notice the charge added to their bill, whether in a restaurant, bar or hotel, but the reality is, when it comes to non-cash tips the majority don’t know what the charge covers or where that portion of money actually goes.
Because there is no real industry standard or benchmark on who should receive a share of the tips and service charges and how it should be distributed, it is immediately open to interpretation and exploitation. The likelihood is, 90% of established operators have a good reputation to uphold and will be managing tips fairly but it’s the 10% not playing fair that are damaging the future of the gratuities system, upon which the industry relies.
A shared standard
If hospitality firms adopted an industry-wide accreditation scheme that promotes good practice, perhaps associated with a Kitemark or symbol of trust, consumer’s would have greater peace of mind about where their cash ends up and businesses would also be sending transparent, positive messages to their staff – which in turn boosts loyalty, team culture and of course, revenue.
The question is would an industry Kitemark reduce the negativity currently associated with tipping? When asked about the prospect of introducing an accreditation scheme and Kitemark, our recent survey* found 44% of hospitality firms would welcome an accreditation scheme for businesses who follow best practice principles in distributing gratuities to staff. A further 48% said that having this scheme this would help their staff feel confident that gratuities are shared fairly with them. Half of hospitality businesses surveyed (50%) said an accreditation would also help customers understand how gratuities are distributed to staff.
Needed transparency
The Government previously announced an intention to introduce new measures to ensure that hospitality staff receives 100% of tips from customers, but as the industry well knows, it isn’t as black and white as this. This potential future legislation has since resulted in uncertainty over what will happen and what the impact will be on the sector if legislation is passed.
Adopting an industry standard is a far less risky route for the sector as a whole. Of course, what such a Kitemark and its associated criteria looks like is up for debate, but one thing is clear, the wording on bills related to tips and service charges is wooly and vague and much great transparency is needed. The industry needs to come together to agree on exactly what best practice looks like and move forward with a robust sector-wide standard that will help customers to better understand how tips and service charges are distributed to staff and to give them greater future confidence when leaving it.
Chris Sheppardson
*Over 300 consumers took part in a survey over December 2018 and January 2019 to share their views towards tipping and services charges, allof them eat out at the least every few months and at the most a few times a week.
EP Business in Hospitality has partnered with WMT Troncmaster Services to lead a campaign calling for an industry accreditation, which focuses on industry best practice.
