EP Business in Hospitality has joined forces with WMT Troncmaster Services to lead the launch of a new industry initiative that argues for greater clarity on the future of tipping in the hospitality industry. In a strategic move that also calls for a valid accreditation scheme and associated industry Kitemark to raise standards around gratuities, the campaign also seeks to eliminate growing confusion related to tips vs. service charges today.
Recent independent consumer research* conducted by EP back in January 2019, showed there is a high level of customer scepticism around what happens to non-cash tips and service charges added onto bills. The most common form of gratuity is cash tips (25%) followed by card payments (21%), discretionary service charges on some bills (19%) and a discretionary service charge on all bills (16%). In respect of the hospitality industry, separate research carried out by EP revealed that 33% of firms share more than 90% of tips and service charges with their staff while only 31% share 100% of the gratuities.
Chris Sheppardson, CEO at EP Business in Hospitality commented: “The problem is, there is no real clarity on who should receive a share of the tips and service charges. Our research shows it’s closely fought between three main groups: waiting and kitchen staff, all staff including managers and all non-management staff. Interestingly over half (60%) of the industry believe businesses should be allowed to deduct costs such as credit card charges before paying 100% of the remaining funds to their staff.”
When asked about the prospect of Introducing an accreditation scheme and Kitemark, 44% of hospitality firms said they 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.
Peter Davies, Client Service Partner and Managing Director of WMT Troncmaster Services who is leading the campaign with EP, believes there is confusion around tipping because of the wording used by hospitality firms, he explained: “In truth, 100% of tips should go to the workers, but the wording on bills can be vague and are often interpreted differently. Most businesses have a positive message to tell, but to reduce confusion we need clarification on what good practice is and the industry must work together to agree what that looks like. An industry accreditation is one way of demystifying the negativity related to tipping and is far less risky and more effective than legislation.”
Back in 2018 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 in the future.