While often required by many restaurants in London and the wider UK hospitality scene, tipping can sometimes be a customer pain point, who wonder how much to give. It can also be difficult for serving staff, who wonder how much they’ll get, and a headache for restaurateurs if they act as the troncmaster – dividing up pooled tips, known as ‘the tronc’, and then doing tax and National Insurance calculations.
Yet the growing zero-tipping movement in the United States may be a good strategy for restaurateurs in the UK, allowing them to demonstrate that they are innovative, fair employers who can anticipate the latest trends.
The vast majority of UK restaurants now include a service charge on bills to make the calculations easier. But that may all change – the Government launched a consultation last year on how tipping should be handled, after media reports that some restaurants were hanging onto some or all of the tips that their staff received.
Is the growing zero-tipping movement in the US a good strategy for restaurateurs in the UK?
The options the Government consulted on included abolishing the service charge completely, forcing restaurants to be more transparent about where the money goes, and stopping restaurants from taking a share of the tips.
The consultation finished in the summer of 2016 and the Government hasn’t made any decisions yet, but changes to tipping could present a whole new challenge for restaurateurs – and a great opportunity.
If you are looking to open your first – or next – restaurant, speak to a member of the Restaurant Property team, who are experts not just in the buying and selling of leisure property, but who are also restaurant industry consultants.
So perhaps the answer lies in the USA. America is famous as the land of the tip – taxi drivers, hotel staff, hairdressers, parking attendants all expect a gratuity. But there is a growing trend towards zero-tipping in restaurants.
Historically, waiters and serving staff in the US have been paid very low wages and make the bulk of their income through tips. But staff turnover is often high – a problem shared in the UK where the average length of service is about a year – and the practice of not sharing tips creates problems as staff don’t want to share big tables, yet struggle to deal with the demands of a large group on their own.
Some US restaurants have dropped tipping, instead raising wages and menu prices to cover the lost income – the most prominent is Shake Shack, the burger chain. Some include prominent advice on menus telling customers not to tip, and servers tell them they do not accept tips. When customers have been desperate to tip, the money has been donated to local charities instead.
Zero tipping has not been a success everywhere. Joe’s Crab Shack, a seafood chain, reinstated tipping three months after stopping the practice because customers and staff complained, and other independents and small chains have also brought back tips. But Shake Shack continues to press ahead, and claims that the measures have been a success.
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