Should restaurants scrap automatic tipping?

The well-known restaurant chain Ping Pong has replaced its 12.5% service charge with a new optional 15% ‘brand’ charge.  Previously, 90% of the service charge went directly to employees.

The chain stated that it intends to use the brand charge as an alternative to raising menu prices and will review all constructive feedback before making a final decision on whether to keep the charge in June, after which it will decide whether to enforce the charge, raise menu prices or both.

It’s important to note that just three months ago, new legislation mandated that businesses must give 100% of any tips/service charges to employees.

The chain stated that although the service charge is no longer applicable, they have increased employees’ basic wages by 19% (from £10.42 per hour to a minimum of £12.44 per hour, £1 higher than the new statutory minimum wage) claiming this will “match the additional income they previously received through service charges.  They have also stated that customers can still choose to leave cash tips (though many no longer carry cash!).

1. Origins of tipping

There’s a common story that tipping in the UK originated from a restaurant in 18th-century London, where the owner placed a small bowl on the table at the restaurant’s entrance, with a sign hanging in the middle of the bowl saying ‘To Insure Prompt Service’ (i.e. TIPS). In order to receive prompt and quality service, customers often chose to put change into the bowl.

Whether this is true or not is debatable – you may want to check out this.

2. When should you pay tips?

Taxis

There is no requirement in the UK to tip taxi drivers because taxi fares are often not whole numbers.

If paying in cash, you can also ask the driver to ‘keep the change’ as a tip.  If you take a pre-booked minicab or the driver helps you with luggage during airport transfers, it might be reasonable to give £2-3 as a tip.

Otherwise, if you’re taking a black cab, 10% is usually appropriate.

Restaurants

This is the most common situation where tipping is appropriate. Some à la carte restaurants may directly include a 10-15% service charge on the bill, so if you see a ‘service charge’ on the bill, you don’t need to add an additional tip.

Another form of tipping is when some restaurants prepare a container or a small wallet, placing the bill inside, allowing customers to leave a cash tip when paying the bill.

Except for fast-food restaurants, where tipping is generally not required, most restaurants either charge a service fee directly, or allow customers to decide the amount of the tip when paying the bill.

Hotels

In the UK, when staying at a hotel, such as for luggage carriers who help you or doormen who actively help you call a taxi, it’s common to give £1-2 as a tip to show appreciation.

If you feel the room cleaning service is done well, you can also leave £1-£2 as a tip on the table or under the pillow for the housekeeping staff before checking out. However, most hotels in the UK include a service charge in your final bill, so you don’t have to give an additional tip.

3. Should automatic tipping be scrapped?

In the UK, tipping is mostly done as a gesture of gratitude and appreciation for service.  This is also an important source of income for most service industry personnel.

In response to Ping Pong’s decision to remove their service charges, Bryan Simpson, the lead organiser of Unite’s hospitality division, stated:

‘Ping Pong’s decision to effectively deny workers tips by cynically changing the service charge to a ‘brand charge’ in order to circumvent the new fair tips legislation is one of the most blatant examples of tips theft that we’ve come across as the union for restaurant and bar workers’

Public opinion on tipping has always been mixed.

On one hand, removing service charges reduces the income of service industry personnel, naturally leading to opposition from employees.  Consumers may also be worried that the lack of tips will make staff less motivated, and in turn they might be unable to enjoy good service.

On the other hand, is there something to be said for ensuring a proper basic wage rather than relying on customers to pay additional fees in tips?

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This article is intended as general guidance only, and does not replace any legal or professional advice.  For enquiries, please contact TBA Group via email or WhatsApp.