/ Money, Travel & Leisure

Ditch restaurant service charge – pay cash tip instead

Cash tip and restaurant bill

When you leave a tip at the end of a meal you expect it to go to the restaurant staff, but unless you leave cash that might not be the case. So where is service charge going?

I’ve always found the idea of tipping low-paid workers troubling and condescending. Frankly, people should be paid a fair wage for a fair day’s toil and not have to rely on gratuities.

However the world is not ideal and I feel obliged to tip hospitality workers because the chances are they aren’t paid adequately. For this reason I’ve always paid the optional restaurant service charge when it was included on the bill with barely a grumble – until I learned where the additional payment actually went.

Where service charge goes

I’d always thought that the service charge, along with any non-cash tip paid by credit or debit card, would find its way as an extra payment to the hard working restaurant servers and kitchen staff. How wrong can you be?

A look at the British Hospitality Association (BHA) website soon corrected that misconception. The service charge and non-cash tip can, it seems, pay for credit card and bank charges, payroll costs and credit card fraud, but there’s no guarantee that any of it will end up in the staff’s hands as a gratuity.

Another interesting snippet of tipping information on the BHA site is that cash tips are deemed by law to be the property of the staff, whereas the service charge and non-cash tips belong to the restaurant.

Always leave cash

For me it was a no-brainer then; the service charge had to go. For some weird psychological reason it took a bit of courage the first time I asked for the charge to be removed from a bill in favour of paying a cash tip, but now there’s no stopping me.

By leaving out clear and accountable information about where the service charge goes, I believe restaurants are being inherently dishonest with their customers. If they want to charge an extra amount for service (even if it is discretionary) they should clearly spell out exactly what they are going to do with our money.


I Always Leave Cash Tips,As I Know Restaurants/Cafes Try 2Give Part Wages & Part Tips,Sadly They Don’t Get Minimum Wage 🙁 :/


Card Tips & Service Charges Make Up There Wages, & Not Tips 🙁 :/

A friend of mine is quite militant about this and always refuses to pay the ‘optional’ service charge. This has often caused some consternation. A number of times when we’ve been out to dinner and she’s asked for the service charge to be removed in favour of tipping the waiter, a manager has been called over and some discussion has taken place. Once restaurant manager in Victoria even followed us out of the restaurant to demand why we refused to pay the (optional) charge – he wasn’t happy. So, if you do decide to take this stance (and I believe more of us should) then be prepared to be challenged by some disgruntled restaurant managers at the end of your meal!

pickle says:
6 October 2010

eee nomosaic….That is the right thing to do, but – it might result in an almighty row with the restaurant manager in front of one’s guests and so spoil the evening.
Seems to me that Which? could do a study on this subject and clarify the issue – keeping the restaurant fraternity informed of course.

Sophie Gilbert says:
12 October 2010

It isn’t just people from the hospitality industry we tip, it’s also shampoo girls and taxi drivers. Why? And why do we tip at all?

Also, if it is indeed correct that some restaurants pay their staff in part wages, part pie-in-the-sky tips, and don’t pay the minimum wage, we should campaign to make this illegal (or isn’t it already?). If it is incorrect we should stop spreading what is a mere rumour.

And in view of the fact that the “service” charge doesn’t go to serving staff we should also campaign to put a stop to this practice of automatically adding it to the bill.

Anyone interested in this issue should take a look at this article on the Guardian website today: http://www.guardian.co.uk/lifeandstyle/wordofmouth/2010/nov/26/good-tip-carry-cash There’s some shocking stuff in there – particularly about how much staff are charged when they process a tip via credit/debit card.

Douglas M says:
17 June 2011

It is a little known detail that tips added to the bill and paid by card are subject to deduction of VAT, now 1/6 of the amount paid, but tips paid in cash to the staff are not so charged.
So I always pay the bare bill by card and leave cash for the waiting staff. They always look pleased.

Mandy Wiles says:
28 November 2011

I work in a restaurant in Crouch End, London. If our tips are cash or cc it makes no difference we still pay tax on both of them.

Mandy Wiles says:
29 August 2011

I went to a restaurant called the Bintang (Thai restaurant) in Kentish town road) on Friday, when the bill came there was a 10% sc added to the bill, I asked the waiter if she got this, she said no (but don’t tell my boss I said that) I immediately asked her to take off the sc and gave her a cash tip which was more than the sc, she was happy Where do I go to name and shame this restaurant????

alicia says:
27 November 2011

Over one year ago came change in law to protect hospitality sector employees which supposed to stop employers from using service charge and tips to top up employees’ wages to statutory minimum. But was that legislation effective? In some cases probably yes but I do believe in many law actually has failed. Can it be still change? I hope so and I would like to share my experience believing it can be a motivation for someone (maybe customers/solicitors/government) to act on behalf of hospitality sector employees to make an effective change.
Well, for those who wants to know something more about ‘behind the scenes’ practice in restaurants I can tell you something about that on my example. In the restaurant where I work on customers’ bills appears 12.5% of obligatory service charge. On each bill it is written as well than restaurant have got no profit from the service charge and it is fairly divided between the staff involved in serving you. How it looks in practice? We are getting minimum wage plus 20% of service. Well, it mean than if a customer spend let say ?30 on his dinner and we add a service charge (?30x 12.5% = ?3.75) equals ?33.37 than a waitress gets… How much?
Well from that ?3.75 a 20% is for a supervisor/manager (it’s fair because when it’s busy they do help us)- ?3.75 – 20% = ?3, from that there is a VAT taken by dividing it by 1.3 (well it’s seems to be 23% not 20% VAT, we don’t know why is that way) so ?3/1.3 = ?2.30. And now we get a 20% from that ?2.30 which is ?0.46 before tax and NIC. If a service you pay is ?10 waitress get ?1.23. Well, without taking out VAT there is 60% of service going to the restaurant owner. So I think every should decided his/her self is it fair? Don’t forget what is written on the bill – restaurant got no profit from a service charge!
As well last week our employer took away about ?100 form one of my colleague wage (she has been working over 50 hours very busy shifts) because he decided she has earn to much that week and he will keep those money for next two month when restaurant will be quite after a Christmas time so his got money for her wage, he is not going to pay from his pocket. When she said than she doesn’t agree to that because she has been working hard all week and has to pay bills as well, he said than he is going to bring her a newspaper where is written than service according to the current legislations belongs to the restaurant means he can do with it whatever he wants.
I would like to ask customers just for a one thing. Please don’t pay service charge, don’t go to restaurant where is service charge or refuse to pay service charge it’s the way you can help those things to end. Keep your money in your pocket unless you want to pay something extra to the owner of a restaurant. I do believe there are restaurant where it works fair, like the ones which accepted British Hospitality Association’s code of practice urging restaurant to disclose to customers how they deal with service charge and tips. And I would like to thank you to all those honest employers, who keeps things right even they have to compete with those dishonest ones who knowingly mislead their customers.

Dawaki says:
9 December 2011

Tipping is a disgraceful relic of former times. It needs to be abolished systemically. Individual action merely causes a fuss and spoils enjoyment. In France there is a universal service charge. This is not ideal but it is an advance.

Where I work if the customer asks for the service to be taken off and leaves a cash tip for the staff, the owner insists that the cash left should be used to make up the difference as much as it can on the bill. Only if there is more money paid than the bill including the 12,5% service charge will that extra go to the staff. Less than 5% of any service charge is distributed to staff and that is intermittent. If staff keep the cash or put it into the tip box they will receive a warning. This is wrong on many counts but also as a customer as it means they are not allowed to give their own money as they wish when they believe they are doing the right thing and eaving a cash tip it is actually being stolen by the owner.