The future of tipping – a need for clarity
22/03/2019
The overriding opinion of restaurant customers in a recent survey was that of confusion and a lack of confidence when it came to leaving tips and paying service charges.
80% of restaurant customer would rather pay tips in cash than by card as they felt more confident that their money would go to the staff it is intended for rather than being “sucked up” by the business.
“I worry that if it’s done by card the staff may not receive it”
“I understand that staff receive cash tips but not always card payments”
“I’d like the staff to get it, if you pay by card I expect they don’t”
On the other side of the coin, in a similar survey for hospitality operators, two thirds of respondents stated that staff receive at leave 90% of tips and service charges paid by customers.
So where is this lack of trust coming from?
There is some justification in customer fears, with 13% of restaurant owner stating that no tips or service charges left by customers are passed to staff. But currently the only way to know which restaurants operate fair tipping processes and which are do not, is to ask the staff directly.
In a campaign entitled ‘The Future of Tipping’, run alongside EP Magazine, we aimed to discover if there was desire from both the industry and their customers for an accreditation system – a system that would promote good practice principles for operators and give customers a clearer view of where their gratuities go.
The answer was yes.
75% of operators and 96% of customers thought an accreditation scheme that recognises hospitality business who follow best practice principles could be a good idea.
Understanding and confidence
92% of customers and 86% of operators thought an accreditation scheme could help them to better understand how tips are distributed.
87% – operators thought it could help staff feel more confident that tips are shared fairly and 88% of customers said it could improve their confidence in leaving tips and service charges.
Acknowledging fairness
With clear support for some form accreditation scheme, we asked in what way operators would be willing to highlight this to customers. There was support for a ‘kite mark’ that operators who met the standards could display across their menus, websites, social media, restaurant entrances or at till points for customers to see.
59% of operators would be willing to display a kite mark indicating that they follow best practice guidelines.
48% of customers said they would be more likely to visit hospitality businesses that display a kite mark. Whilst 52% said it would make no difference, no one would be less likely to visit. Encouragingly, 41% said they would be more inclined to leave tip and 9% more inclined to leave a bigger tip if the best practice kite mark was on display – benefits for both the restaurant and their staff.
The details of how such an accreditation scheme would operate are still to be established, but this is clear evidence that it would be welcome.
Despite a customer preference for leaving cash tips, one poignant comment from a customer highlighted the need for change.
“Cash is on the way out so we need to find a solution”
With cash becoming less prominent in our day-to-day lives, but 96% of customers willing to leave tips when dining out, they need a solution that gives them confidence staff will receive a fair share.
What’s next?
We have outlined what is widely consider to be ‘Good practice principles’ in a recently published guide that should be considered alongside HOSPA’s ‘Tips, gratuities, service charges and troncs guide’ for transparent and fair distribution of restaurant gratuities. We hope that this will form a basis for widely recognised good industry practice.
Overall, both surveys showed a need for clarity and greater transparency for restaurant staff and their customers. An accreditation scheme with a recognisable kite mark could go some way to addressing this issue, but there is still work to be done on the detail.
The full summary of both surveys can be found below.
If you have any questions on the survey results or comments on the future of tipping please contact WMT’s Peter Davies or call 0800 158 5829.
