Re: The Issue of Gratuities

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Posted by Gabriel Cohen on July 10, 1998 at 11:22:57 :

In Reply to: I Beg to differ....... posted by Carl Jones on July 10, 1998 at 00:59:56 :

: : I have been in the catering business for ten years, first as a waiter, then as a captain, staff booker, and finally as a party planner. I was absolutely appalled by some of the comments relating to gratuities posted on this bulletin board. One of the caterers said that he includes a "service charge" on his bills and then keeps the money as a "profit center" for his company. He adds that the staff is well paid already, so they don't need to be given tips. If this is different from announcing "I steal my waiters' tips and I'm proud of it," I'd love to know how. His statements reflect several major fallacies: first of all, by nature a gratuity has nothing to do with whether or not the staff is well-paid. It represents a special token of thanks on the part of the client, above and beyond any billed pay. Second, if a client sees a "service charge" on a bill, they will naturally assume that it is going to a staff gratuity, just as you would if you saw a "service charge" added to a restaurant bill. To keep this money may not be technically illegal, but it is certainly unethical and immoral. I once captained over thirty major private and corporate events for a major national food service company. When I wondered why I never received tips, a friendly manager explained (strictly "off the record") that the company routinely included a service charge in the bill, so that while the clients thought they were tipping the hard-working and deserving waitstaff, the top managers were using this "profit" to pad their bottom line. It's bad enough to engage in such shoddy business practices--to brag about them on a public bulletin board is even worse.

: Well i think it would have been more appropriate to address the issue where i posted...
: To say that i am immoral is a display of ignorance... first your ignorance comes from the
: fact that you do not know me, how i bill clients, or what i pay my staff... had you bothered to address it with me
: before attacking me publically, then maybe we could have had an intelligent exchange...

: I am not bragging, i HONESTLY stated how i charge.... My staff DOES receive personal tips, and my
: catering agreement states in clear language that the "service charge" is not a gratuity but simply
: a percentage that is charged on the entire event for arranging, managing and providing the catering
: services, we even add the phrase "Gratuity is at Your Discretion", so i think we are
: giving our servers a good shot for additional monies....
: .....but you wouldnt know that because you didnt ask.....

: If your previous employers deceived their clients or operated in less than an honest manner, then
: i think you have a good point, but to ASSUME or paint me with the same brush is offensive to me..
: you stated that i am stealing my waiter's tips?????? again, how dare you?????.....
: shoddy business practices you say? Again, if you had read my catering agreement you would see that each item on my bill is clearly
: expained.....

: i do think that using the term "service charge" may not be the best way to discribe
: the percentage fee, but the term service charge is not suppose to be synonomous with
: "gratuity" or "tip" some less informed people have confused the two terms.... that is why
: we clarify it....

: Gabriel, i sense your frustration and apologize for my less than sensitive approach to the
: subject and for not being crystal clear on my policies in my earlier post..... but
: you deserve to be attacked for your statements about me...... i will be happy to continue
: the discussion... and if i am wrong and the rest of the readers of this forum think i should
: change the way i word my billing then i will change it.....

: good luck to you....

: Carl

Dear Carl,

Now that you explain in greater detail how you deal with the gratuity issue, I see that I have indeed painted you with an unfair brush, and for that I apologize. If you clearly indicate on the bill that the "service charge" is not equivalent to a billed gratuity, then there is certainly nothing immoral or unethical about it. As you noted, I was writing (perhaps a bit hastily) out of a general frustration, having worked with too many caterers who seemed to feel that waiters' gratuities were simply another part of their own profits. (This led to a lot of waiters' cynical comments about the caterer's "new house that tips built" or "new car that tips bought." As I said, I've known cases where a "service charge" was added to the bill without any explanation with the clear assumption that the client would see it as a gratuity, and then the caterer would pocket the money. I deal with this issue in my own bills and contracts by adding a "planning fee" and clearly stating what this item is for (consulting with the client, ordering rentals, etc., etc.). Other caterers might call it an "administrative charge" to clarify that it goes to office overhead, rent, etc. At the end of the bill, I write that "gratuities are voluntary and at the discretion of the client." Some caterers include a specific charge for a gratuity--while that's okay, I think the client needs to be sure that they're pleased with the service before they make a decision to tip. In any case, for whoever may be reading this, I do want to emphasize again that if the client understands that they have offered a gratuity to the staff, that money needs to get to the staff. To do otherwise with it is stealing, as surely as taking money directly out of a waiter's pocket or their home

Again, to Carl, thank you for clarifying your policies, and again I apologize for attacking you unfairly. As you noticed, I am particularly sensitive about this issue, because I have seen waiters' gratuities abused so often in this business.

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