Rob’s Rules: Hip to Tip

December 30, 2010


By Rob Schaefer

Isn’t it funny how people feel completely comfortable buying an expensive item for themselves, but agonize over what to tip someone? Americans spend a total of $26 million in tipping each year. And although most gratuities are now standardized, people still seemed confused about who, when and how much.

There have been many times that I felt I was entitled to a gratuity. Staying well past the end of an event to take care of the intoxicated, running to Walgreen’s to pick up cough syrup for a hacking guest, gluing 400 rhinestones on the programs because the family ran out of time – the list is endless. It is in my nature to go the extra mile, so I never expect anything, however, when I am given something out of appreciation, it is the cherry on the sundae!

To me, service is a distinction, not a dollar. But for many people who work in the service industry, generosity equals survival. Most likely, tipping began as a practice motivated by self-preservation. Prehistoric people probably “tipped” for safe passage and protection through another’s land and the privilege to use their resources such as wild game and wood for the fire. Although we live in the modern age, I have seen waiters go primal when stiffed of what they consider their fair share.

When planning an event, it is important to consider gratuity beforehand – never, EVER assume that you will be able to take care of tipping later. Is the host responsible for tipping, or are the guests? Coat, lobby and washroom attendants, doormen, wait staff and valet must all be tipped. Also keep in mind that the staff will not be there the next day, so you must address their payment before or during the event.

Bartenders are a critical group to take care of. Some hosts don’t want their guests to have to worry about tipping. While that is generous, be sure you are prepared to tip fairly. You should assume that the bartenders will average $1-$2 per guest, or 10-15% of the bar tab. If you have 300 guests, that is a $600 tip. The same amount holds true for the valet as well.

Even if you have tipped the staff ahead of time, there are generous people who will tip anyway. However, do NOT count on these people when you are figuring the amount you are going to tip. If a few of your guests give the valet, who has been standing in the freezing cold, a couple extra bucks to buy a hot chocolate, so be it. If a guest shows his appreciation in the form of dollars to the server who fetched drinks all night or retrieved a little club soda to remove a stain, smile and be thankful that there are generous people in this world. Rob’s Rule – Don’t be a Scrooge!

It seems that the biggest confusion lies in what is considered gratuity and what is not. Gratuity is a CASH reward given to a server for above average service. Gratuity is not mandatory, unless stated by the facility, in which case it is subject to sales tax. For example, if you choose to give waiter Joe 15% of the bill in cash, there is no tax. If you are with a large party and pay a mandatory 18% gratuity, you are paying taxes on that 18% as well. Even if you leave cash, the tax on the gratuity has already been figured in. Whew! It can be confusing! Just remember that when it’s mandatory – gratuity or service charge – it’s taxed.

What is a service charge? A service charge or service fee is not necessarily a gratuity. Most laws state it is not a gratuity, as the consumer has no choice but to pay it. Most often, the service charge is there to cover the cost of the labor for the event you are hosting. It encompasses the salaries of dishwashers to servers to facility coordinators. Generally, a service charge runs between 18% and 22% of the total bill. Then tax is added on top of that – per the tax laws. However, what most people don’t realize is that the employer is not required, nor do they typically give the servers ANY of the service charge. As long as the servers make minimum wage or more, they are not entitled to any part of the service charge. So if you think you took care of everyone with the contracted service charge, you didn’t.

Another thing to consider is that if you add the tip to your facility contract to be disbursed by the employer, the employer will keep a portion and taxes will eat up the rest. BE SURE TO ASK THE RIGHT QUESTIONS! And if your client is too cheap to tip, you can at least write a glowing thank you note stating the highlights of your experience. Rob’s Rule – A sincere
thank you is worth its weight in gold!

So now that we’ve covered tipping etiquette for good service, what do you do when the experience is less than favorable? You have to ask yourself, “Was it the facility’s fault or was it your server’s fault?” The server did not cook the food, break the furnace or blast the music; the facility did. Never blame or penalize a person for things out of the realm of his or her control. Focus solely on the tasks that your server was responsible for and performed. If there are issues that need to be addressed, discreetly speak to the manager and take the conversation out of the room. Doing so in this manner allows you to communicate directly with the person who can fix or salvage the situation. Rob’s Rule – If you’ve got a beef, see the chief!

When traveling, be aware that tipping standards differ throughout the world. For instance, in most European countries, the tip–approximately 20% – is already included in the bill. However, in Mexico and Latin America, servers survive off tips. Keep in mind, though, that a dollar goes a long way. One U.S. dollar in South American countries is roughly equivalent to $10 here.

I recommend traveling with an abundance of single dollar bills. I tip $1-$2 per bag to skycaps, a dollar per day to the housekeepers (keep in mind that it is usually a different person each day) and $1 for bellmen and coat check attendants. I fold the dollars into groups of five and keep them in my lapel pocket so I do not have to flash my wallet. This trick is much easier and safer, and avoids unwanted attention. Ladies, never fumble in your purse in a public place. It makes you an instant target for crime. Use a phone booth, hotel desk or even the privacy of a washroom if you need to find something in your purse. Rob’s Rule – Be smart, don’t flash cash!

When dining at a restaurant where you are seated and food is served to you, most people know that the traditional 15% – 20% applies. If you have a maitre d’ who has gone out of his way to make the evening special, he should receive $20 – $25. But what about fast food, buffets or a drive-thru? Personally, I believe that you should not tip in a fast food establishment. If you have to order at a counter and retrieve your own beverages, I do not feel that you have to tip – even if they deliver the food to your table. However, if they do more than bring your food, including clearing the table and refilling beverages in a prompt and friendly manner, a small tip – between one and two dollars – is appropriate.

Unless it is a holiday or I have made a special request, I never tip at a drive-thru window. Having your food handed to you does not merit a tip! If you order food that is delivered to your home or office, a 10% tip is standard. Coffee houses and cafés typically have the tip jar on the counter – tip at your discretion, keeping in mind that bartenders usually get $1 per drink, or 15 to 20% of the total bill. What about other services, such as a shoeshine, dry cleaning, taxi or hair grooming? A shoeshine traditionally gets $2 to $3 depending upon the quality of the work. I tip my dry cleaner only on the holidays unless they deliver something to the house or provide a special service such as sewing on buttons or getting out a tough stain. A taxi driver is usually tipped 15% of the fare and hairdressers typically get 15% of the total services rendered. If someone else shampoos your hair, give them up to $2.

Finally, what about meeting planners? Planners often go unnoticed when gratuities are being given. Traditionally, they should receive at least 1% to 5% of the total cost of the event they helped create. Or for very large events, at least $100 for every $10,000 spent on the event. And although wedding planning services vary in price and levels of sophistication, the same 1% to 5% holds true for a job well done. Around the holidays, we are often filled with the spirit of generosity. Keep in mind that Emily Post dictates that one should never feel obligated to go beyond his or her personal budget. Also, if you tip on a regular basis at each time of service, a holiday card or small token of your appreciation is enough. Although you may be in a giving spirit, be aware that various companies have rules on tipping, so if you want to reward an individual, make sure it does not cause him or her trouble at work. For instance, United States postal workers can only accept food and beverage gifts that are not part of a meal, and small gifts that are no more than $20 in value – they are never allowed to accept cash. Large items worth more than $20, such as fruit baskets, gourmet snack baskets or deli trays, must be shared with the entire branch.

Rob’s Top 10 Tips!
1. More often than not, a service charge is not gratuity. When planning events, be sure to find out if gratuity is included with the facility charge. And just because you pay a service charge, that does not mean that the staff will receive anything.
2. If you’ve got a beef, see the chief! NEVER instigate a public confrontation at an event or scold a server in front of others. Take the issue out of the room and let management handle it.
3. There are many gray areas when it comes to gratuity. Don’t feel bad for not tipping in a fast food restaurant or drive-thru window.
4. A sincere thank you note is worth its weight in gold.
5. When traveling, stock up on singles and store small amounts of cash for tipping in a pocket, separate from your wallet. Never flash your wallet or parade around with your big designer bag.
6. If math isn’t your forte, carry a tip chart.
7. Decide in advance of your event if you are going to pay the gratuities or leave that to the guests.
8. Always tip in cash to save the poor soul the taxes or employer’s “cut.”
9. If rules and regulations prevent the object of your appreciation from receiving cash directly, gift cards for food, movies and gas are always appreciated.
10. If you plan on expressing your appreciation with food, such as a fruit basket, don’t wait until December 23rd to bestow the gift. Present it early in the month so people can share and enjoy it with the ones they love.

This column is meant to provide practical advice, tips and rules of engagement you need in the meeting and event planning industry. If you have a question, whether it’s how to dress, how to address your guests or what to serve as the main course, e-mail Rob at [email protected] Your question might just inspire the topic of his next column! Rob Schaefer is Vice President of Steven Becker Fine Dining in St. Louis.

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