The Food & Beverage Business
Helping Entrepreneurs Succeed....
“Hi, I’m Vishal your server for today. Here’s our menu. I’ll be right here if you need me.” If you’ve visited enough restaurants, you’d certainly have come across all kinds of servers – from those who serve from the heart or without expectation of a reward, to those who hover around for a tip or even decline one that is too little. “So how much do I leave for him?” we ask ourselves each time we pay a bill... and “what’s this service charge?”
Many years ago, while travelling within the United States, I actually saw a ‘tip card’ much like the taxi fare rate card some of us carry around in India. It tabulated a series of rounded off possible bill amounts with their respective 10%, 15% and 20% tip amounts pre-calculated in dollars alongside. I asked myself whether such a card would be of use to us in India and concluded that it wouldn’t. Not just because we can calculate these percentages in our heads, but what we really need is to figure out the basis on which to tip.
The server’s viewpoint: “Everything’s so expensive these days. My salary only covers the basic fee to show up for work. What I’m really here for is an opportunity to earn tips which I expect to be more than this paltry salary. How else can I survive?”
The restaurateur’s viewpoint: “Restaurant staff are so expensive these days and to find and retain them so tough. If I don’t have a good team, my customers will be unhappy and leave. At the same time, the cost of employing good people often threatens put me out of business.” Restaurateurs in India and internationally often resort to using immigrant workers to control labour costs, at times way below minimum wages.
This typical restaurateur-server arrangement makes servers super-sensitive to tips and restaurateurs keen to protect server interests.
The customer’s viewpoint: “If servers are super-sensitive to tips, shouldn’t they realise that being unpleasant towards guests even once, will amount to shooting themselves in the foot?” You’re right, but isn’t it also our privilege as human beings to shoot ourselves in the foot every now and then?
Coming back to how much to tip. It’s reasonable to say, that 10% would be bare minimum, maybe 15% decent and 20% or above good; but it’s all subjective. A bunch of 6 guests at a coffee shop running up a bill of say Rs.500/-, would naturally choose to tip very differently if they visited a 5 star hotel and ran up a bill of say Rs.8000/-. So it’s not just about the bill amount and its corresponding percentage, but also about the kind of establishment and the degree of sophistication in service.
As far as Service Charge goes, it’s something many restaurants world-over opt to charge their guests in addition to their basic menu price and government taxes. In India, it’s often distributed amongst the staff monthly or fortnightly, after deducting breakages and theft of crockery, cutlery etc. Restaurateurs may consider service charge fair on the grounds that securing this crucial part of income for their staff is the only way to retain them. Guests may see it as despicable, feeling that their prerogative as customers of how much to tip has been violated and that all restaurant expenses should be included in the menu price. Accept it or hate it, service charge exists. It’s for you to decide, whether the service you got justifies a tip of more than say the 8% service charge you’re already paying or whether it’s enough. Also, do remember that a cash tip reaches your servers sooner than a credit card tip.
I believe that the way each of us sees a tip depends not only on our individual nature, but also on the situation. In some instances, we see it as a reward for good service or a fair social practice. On others, an opportunity to look good in front of our guests or a grant in return for the pleasure of our overall experience. Either way, the choice is ours….