Re: Service Charge Debate

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Posted by Gabriel on July 17, 1998 at 00:22:05 :

In Reply to: Service Charge Debate posted by Pasha Durant on July 16, 1998 at 20:16:34 :

: We need advice for service charges. We charge a 15% fee on the
: total event including rentals, etc. A client stated that
: she believed it should only be on food. Because if she pays
: for servers etc. it is a double charge. We are struggling with
: what to do on this issue. We want to do the right thing for
: our clients but we also like to have the profit of the fee.
: We do give a percentage of the fee to our staff as tips and
: put the rest back into the company. Any thoughts on this
: and how do you word the language for your clients ?

Other may disagree, but I think the problem here is linguistic: "Service charge" sounds like it's a charge specifically related to the serving of the food, when what you're trying to do (or so it seems to me) is to cover your planning and administrative costs. Yes--your client is paying directly for the staff party hours, but this additional fee also covers your time and labor and phone bills for booking the waitstaff, as well as all of the other overhead costs like rent. I believe that if you state this percentage fee as a "planning fee" or "administrative charge" or even a "planning and administration charge," you won't run into the confusion of the client asking why they should pay a "service" charge when they are already being billed for the party servers. And you can explain to the client that this charge is not about all of the specific costs and services (including rentals)--it's about the time and energy that goes into planning and contracting for them. I hope that makes sense. (I also hope that you will continue to share some of this money with the staff--frequent tips are a powerful motivator for peak service and company loyalty.)

All the Best,

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