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Chris Bell

How does the changes to the UK tipping laws mean to the hospitality industry?

Tipping in a restaurant or bar is often looked at as an American habit. In the states tipping is almost a must, it often makes up an employee’s wage. However, in the UK, tipping is viewed as a sign of generosity and it not a necessity. The staff employed do receive minimum wage therefore a tip isn’t a given.

With other costs such as rent and travel being relatively high in the UK, minimum wage often doesn’t cover the costs of living. For other necessities such as food, employees often do rely on their tips.

Prime Minister Theresa May has announced that restaurants will no longer be allowed to take tips away from staff. With this change and the habits of UK tipping, a problem has risen through companies taking a cut of their staffs tips, sometimes this can up to 10% of card-based tips.

How much do the UK tip?

Will this have any impact on the hospitality industry as all? Well, according to This Is Money, one in 10 Brits don’t tip at all anyway. Those that do tend to leave, on average, 7% of the total bill as a tip instead of the usual 10%. The top reasons for leaving a tip centred around politeness and effort, and one potential reason for not leaving a tip is cited as concern over where the money really goes.

With money on the mind, tipping has a feeling of being uncontrolled when tipping is not compulsory. There’s currently no law in the UK that states all tips have to go to staff. Sadly, this can mean tips don’t always reach the waiting staff intended; one employee in London spoke to the Guardian of how tips were used to cover breakages by staff and customers. They also voiced concern that the sharing-tips practice commonly found in restaurants can be wholly unfair, as an underperforming member of staff who received no direct tips from customers may end up with money from another member of staff putting a lot of effort into giving great customer service. On the flip side, that well-performing member of staff will lose some of the tips given to them by their happy customers. This results in a lack of effort being rewarded, and a great work ethic being reprimanded.

Are customers suspicious over card-based tips?

If customer concern over where the money is going is holding back tips, could this legislation see a rise in amount of people tipping? Potentially — if customers are assured the staff are receiving the tips, they will likely tip, and tip more generously.

Currently, there’s a difference between tipping with cash and card in terms of where it will end up. Cash tips belong to staff, but card tips belong to the business. Card tips end up in a system known as a tronc, which is then shared out in the wages. But it isn’t uncommon to hear stories of firms retaining part or all of the tronc, which has caused this public distrust of card tips. Customers are savvy to all of this and will often opt to leave a cash tip if they can and decline a card tip when prompted.

This issue and suspicion over card tips is a huge contributor to Brits being poor tippers; after all, with card payments overtaking cash transactions earlier this year, and the rising popularity and ease of contactless, customers are increasingly likely to not have cash to leave a tip, and feel uncomfortable with leaving a card tip without the certainty that it is going to the staff. In fact, studies show in 2016, only 40% of transactions were cash-based compared to 60% in 2006. A change in the law to assure card tips are the property of staff as much as cash tips could alleviate this problem and see more frequent and larger tips flowing in.

The problem of sharing tips

More needs to be done to ensure the best use of tips, beyond merely banning restaurants from taking a percentage of the staffs’ tips. For example, what about the kitchen staff? Should they receive a portion of the tips, given their contributions to a happy customer? Or are tips solely for the face-to-face experience?

One staff member noted that she would prefer to see a rise in basic wage rather than having to rely on tips. The problem of relying on tips is particularly evident in the US hospitality industry; while tipping is also not compulsory over there, ‘tipped’ employees aren’t covered by the usual minimum wage. Instead, their minimum wage sits at around $2.15 an hour, meaning staff are relying on pulling in good tips. This makes for a huge amount of effort on the waiting staff’s behalf to ensure customers are happy, perhaps, but at the cost of stable income. Then again, the staff tips go to, well, the staff who served that table! And a good thing too, given the recent generosity of one YouTuber who left a $10,000 cash tip for one lucky staff member!

Tipping tips and etiquette

The plan is to make it so companies can’t take tips away from waiting staff, but no action has yet been taken. So, in the meantime, what is the protocol for tipping in the UK? Here, we’ve gathered the best advice in regards to tips:

  • A service charge ≠ a tip — A common misconception, but the service charge added to a bill isn’t a tip to the staff. This can sometimes be requested to be removed from the bill in preference of leaving a cash tip. But the current misconception can cause service charges to reduce the likelihood of customers leaving tips (because they think they already did!)
  • The general consensus is a 10% tip — Many people are concerned over how much to leave as a tip. Too little might be insulting, for example. Well, generally, 10% of the total bill is a good guideline.
  • But not every time — Bad service happens, and in such a scenario, it’s perfectly fine to leave no tip. You may also receive exceptional service and want to tip more!
  • Not just restaurants — Tipping is a practice beyond the dinner table. From tour guides in small villages to staff at hotels in Cardiff, many people can benefit from tips from happy customers! Again, the 10% rule is a good guideline, though for cab drivers, it’s common to simply round up the fare and leave the change.