The Future of Tipping Survey Results

This year EP, together with WMT Chartered Accountants, are exploring the future of tipping in the UK with the aim of providing clarity on the views of the hospitality industry. Following a survey with over 200 senior players, it is clear that – whilst the amounts and forms of tipping and service charge are debatable – there is a desire for an accreditation scheme for those who follow best practice principles.

Cash is still the most common form of payment for gratuities. For gratuities paid by card, whilst there is debate over who receives a share, nearly 60% believe credit card charges should be deducted before they are shared.

Over Christmas and into 2019 two surveys were created to explore, separately, the views of the industry and those of the consumer. The following results are those of business owners, managers and others in managerial positions.

The UK may be in a time of uncertainty when it comes to Brexit but luckily consumers are still craving experiences that the hospitality world provides. However, when it comes to paying the bill it can become a little tricky as there seems to be no general consensus on what and how tipping works.

Last year on the eve of the Conservative party conference the Prime Minister announced an intention to introduce new measures to ensure restaurant staff receive all tips from customers. The announcement caused uncertainty over what it will mean for the industry.

With these potential changes, EP and WMT created a survey which was completed by over 200 senior players in the hospitality sector to find some clarity.

The Results:

  • Most common form of gratuity was cash tips (25%) followed by card payment (21%), discretionary service charge on some bills (19%) and a discretionary service on all bills (16%)
  • 33% share more than 90% of tips and service charge with staff and 31% share 100%. 26 of those surveyed didn’t share any proportion of tips and service charge
  • There is no real clarity on who should receive a share of the tips and service charge. Results show its closely fought between these top three:
    • 25% – waiting and kitchen staff
    • 23% – all staff including managers
    • 21% – all non-management staff
  • Over half (60%) believe businesses should be allowed to deduct costs such as credit card charges before paying 100% of the remaining funds to staff

What does change bring:

38% would see a significant amount of cost implication should administration charges be outlawed but 22% would see none. 11% would no longer accept or process tips or service charges should this happen

• Operators believe the most important information to share with customers is that tips and service charge are discretionary (25%), which groups of staff receive a share (22%), and what proportion of gratuities is retained by the business as an administration charge (20%)

 

 

Introducing an accreditation scheme and ‘kite mark’:

  • 44% would welcome an accreditation scheme for businesses who follow best practice principles in distributing gratuities to staff
    • 48% say this would help staff feel confident that gratuities are shared fairly with them
    • 50% say this would help customers understand how gratuities are distributed to staff
  • If a scheme existed, 59% would be willing to display a ‘kite mark’ in the following locations:
    • On website 29%
    • On menus 21%
    • On social media 18%
    • At point of sale 18%
    • At entrance to restaurant 14%

Industry Comments:

Many comments argued for clear industry guidelines and transparency:

“There are too many unscrupulous operators out there and statute legislation or non-industry individuals are not right to enforce this. It has to be a fit for purpose committee supported by clear guidelines.”

But that all the industry must be compelled to do the same thing, especially to support the perception and understanding of hospitality:

“The issues perplex many people because of the distinction or confusion between tips and service charge.”

A desire to reward individuals:

“Restaurants would retain and motivate service staff if tips were only shared with them despite an increase of costs”

“Reward the real talent, wherever they are in the building and offer financial recognition”

The results will be discussed and debated over breakfast on 14th February 2019 in central London. If you would like to be involved, please contact us. The results of the customer survey will be published soon.