Mandatory Gratuities?

[MSRadell]

I know that members of these forums come from the three major groups of the restaurant industry, restaurant staff, owners/managers and customers and I'd like to get feedback from all three groups on this subject.

Walt Disney World is one of our favorite places to visit, they have a huge variation in culinary experiences as well as many other forms of entertainment. We have recently found out that effective January 1, 2008 they will be imposing a mandatory 18% gratuity out all dinners in sit down restaurants no matter what the party size!

Why I agree wait staff needs to receive good compensation for their service I don't think this is appropriate. A gratuity is left to reward good service, in most cases a normal level of service is rewarded with at least 15% and outstanding service is rewarded with 20% and higher. I believe this policy will only help further decline the level of service. This decline has been talked about in a couple of other threads in this forum and giving a good tip of 18% for any level of service will only encourage lower performance by the majority of servers. It will also discourage the top end servers from being so enthusiastic when they see the slackers getting 18% for doing the least they can get away with.

I realize that some people on vacation do not tip appropriately and this may be one of the reasons for implementing this policy at WDW but I also feel if a large area like this implements this policy it will continue to spread over a period of time. We might just as well go to the European system of Service Compris if this is the case since at least then you don't see the actual percentage of the gratuity!

What's everybody else's opinion of this new policy?

[Shel_B]

... We have recently found out that effective January 1, 2008 they will be imposing a mandatory 18% gratuity out all dinners in sit down restaurants no matter what the party size! [...] What's everybody else's opinion of this new policy?

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I think it's a crummy system. As you said in your post, it will reward poor service, and could cause a decline in the quality of service. For me, it's an unacceptable policy, and I would not eat at any restaurant that imposes such a ploicy.

Fortunately, nothing with the Disney name attached to it is of any interest to me, so, personally, I don't care except for the sake of discussion and how I feel about such a policy in general. Were I to be eating elsewhere and receive poor service, - define that any way you wish - and be forced to pay 18% for such service, I'd really be miffed. OTOH, even if service were good, it's quite possible that I - and certainly some people - may be disinclined to leave a bigger gratuity.

shel

Edited November 12, 2007 by Shel_B (log)

[punkin712]

We visit a Disney World at least once a year and hadn't heard about this new policy. I personally hate the idea.

I agree with everything you said, MSRadell. Over the years, we have seen a steady decline in "pixie dust" at Disney and this could be the straw that broke the mouse's back. What will be the policy if the dining experience doesn't warrant the 18% gratuity? Will the policy be clearly communicated to ensure diners don't double tip?

It will be interesting to see how this affects service quality in an environment where "sit down dining" can run the gamut of shorts/t-shirts to jackets/ties. Perhaps they would have been better off putting this policy in place at their top-tier restaurants (California Grill, Victoria and Albert's, etc.) first and then filtering it down to the lower price point locations if it proved to be a no-impact change.

[plk]

I'm curious, though, is variable tipping the best way of discouraging bad and encouraging good service? If all customers tipped that way, it probably would be, but I've been under the impression that in general, quality of service does not necessarily positively correlate with increased tips. Maybe there are so many poor or uneven tippers that visit the Disney parks that they're better off insuring a decent tip rate for all servers and encouraging or teaching good service by other means.

[MSRadell]

Maybe there are so many poor or uneven tippers that visit the Disney parks that they're better off insuring a decent tip rate for all servers and encouraging or teaching good service by other means.

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or maybe there are so many poor servers that have complained enough about not making money (my opinion). I don't believe think that if good tips don't encourage good service you can encourage it by any other means. I also don't believe Disney cares that much about service anymore, they just care about the bottom line. I also wonder if Disney will take a cut (say 3%?) for administering this tip pool.

As far as an overall increase in the percentage for a tip is concerned, the amount received for tips increase is proportional to the increased price in menu items and we all know that the prices at Disney have risen faster than the overall market. Based on this, the rate of pay for servers at Disney should have increased more than those serving outside if the level of service had remained the same!

Edited November 12, 2007 by MSRadell (log)

[Busboy]

As a current diner and a former waiter, i think there's much to be said for tipping as an incentive for good service. On the other hand, though, the thought that the average waiter will be transformed into a sullen slacker once the incentive of a substantial tip (or, given the tenor of this thread, the disincentive of a substandard tip) is removed is a bit insulting. Few of us -- an no one else at Disney World -- work for tips, yet we generally think of ourselves as competent, even proud, professionals. The good servers at Disney World will continue to do their job well, the poor waiters will continue to suck, and neither of them will have to suffer for the fact that tourists are, as a whole, crappy tippers.

[helenjp]

Hmmm...so if the tip is mandatory, why wouldn't they simply raise prices and wages and eliminate the "tipping" element from the check? Or would people simply feel that prices had been raised for no reason?

[MSRadell]

Hmmm...so if the tip is mandatory, why wouldn't they simply raise prices and wages and eliminate the "tipping" element from the check? Or would people simply feel that prices had been raised for no reason?

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This couldn't be done in the United States because then we'd have the European System of "Service Compris" and we all know we can't do the same thing here that's done in Europe!

[Gabe D.]

I don't work in the industry, but I eat out enough to have an opinion here. I agree with those who say that good service doesn't necessarily equal good tips, and vice versa. For the most part, people are going to tip whatever they normally tip unless the service is either extremely good or extremely bad.

I usually tip 20%, and even though I'm a decent tipper, I wouldn't say that I receive good or bad service at restaurants in any different proportion than I receive from employees of bookstores, banks, doctor's offices, etc. Clearly, servers can be motivated and compenstated by other means than the gratuity.

The gratuity system is completely antiquated, and my only guesses as to why it's still around are: 1) it allows restaurants to shirk responsibility for a significant portion of their employees; and 2) servers generally aren't doing to bad under it either.

[san]

i have worked in the restaurant industry for just under 20 years, and am very much in favor of a mandatory service charge.

Why I agree wait staff needs to receive good compensation for their service I don't think this is appropriate

if servers are paid an hourly rate of 2-3$ per hour, a mandatory grat is the only way for them to receive good compensation. if the establishment decides to pay them a competitive hourly wage, their labor cost would skyrocket and their prices would soar into ridiculousness.

I believe this policy will only help further decline the level of service

it will reward poor service, and could cause a decline in the quality of service. For me, it's an unacceptable policy, and I would not eat at any restaurant that imposes such a ploicy.

i disagree. if no minimum grat is charged, servers get less tips, plain and simple. especially in a place where many tourists who aren't used to our system like WDW. I worked in a tourist area of San Francisco and for a short time they didn't charge a minimum grat. it was not unusual for servers to walk out of the restaurant with about 5% of their total sales (if all of your tips were 18% you would leave with 15% after tipping out busboys, bartenders, and food runners). any server who is even remotely good at his job will simply leave if they are getting paid 1/3 the amount the servers are at a similar restaurant down the street. what is left are unqualified, unmotivated and untalented staff. when a restaurant whose guests don't tip well doesn't protect its staff, it has a weak staff of people who can't get a job anywhere else. this is when service suffers. many of the best restaurants in the country have mandatory service charges (french laundry/per se, charlie trotter's). management dictates the level of service in a restaurant more than anything else.

a minimum grat or service charge IMO is a fair way to protect servers from being taken advantage of by someone who is either uninformed or totally insensitive. only in the restaurant industry can someone purchase a service and dictate how much they pay for it. i would love to go into best buy and pick out a $3000 plasma hdtv and tell them i only feel like giving them $1000 for it. if service is not acceptable to the guest, management usually is willing to discount the bill. it is, however, IMO completely inappropriate to charge a server for a mistake in service, especially when it is often a situation in which the server had no control of to begin with. by charging a server i am referring to the fact that when they are 'stiffed', they still have to tip out several support staff members, so the server ends up having to pay to spend 2 hours running around and working to please a group of guests.

[prasantrin]

if servers are paid an hourly rate of 2-3$ per hour, a mandatory grat is the only way for them to receive good compensation.  if the establishment decides to pay them a competitive hourly wage, their labor cost would skyrocket and their prices would soar into ridiculousness. 

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As I understand it, it is in a minority of states where servers are paid such low rates. In most states, servers are paid at least minimum wage. While this may not be a "competitive hourly wage" to some, it is most definitely competitive with other service industry jobs.

And in Canada, I believe all provinces require servers be paid at least minimum wage. Prices in restaurants there have certainly not soared "into rediculousness."

i would love to go into best buy and pick out a $3000 plasma hdtv and tell them i only feel like giving them $1000 for it.

Not a good example at all. You're paying $3000 for the TV, not for the person who sold it to you. Not only that, but if Best Buy staff work on commission, the person who sold it to you can negotiate the price with you, giving you a discount which would actually result in his/her getting less pay, as that discount would come out of the commission, not the cost of the TV.

[jackal10]

I thought in the US tipping was mandatory.

Personally I think tipping is demeaning. The restaurant should charge the right amount, and pay decent wages, not make the staff beg.

If the service is poor, that is an issue for management to resolve, not the customer.

[Busboy]

if servers are paid an hourly rate of 2-3$ per hour, a mandatory grat is the only way for them to receive good compensation.  if the establishment decides to pay them a competitive hourly wage, their labor cost would skyrocket and their prices would soar into ridiculousness. 

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As I understand it, it is in a minority of states where servers are paid such low rates. In most states, servers are paid at least minimum wage. While this may not be a "competitive hourly wage" to some, it is most definitely competitive with other service industry jobs.

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Actually, in most states, tipped employees make less than the minimum wage. Interesting chart here.

[san]

And in Canada, I believe all provinces require servers be paid at least minimum wage. Prices in restaurants there have certainly not soared "into rediculousness."

only because this is the system for all of the restaurants. it isn't feasible to think that after one restaurant decides to pay their servers from their sales and not accept gratuities (raising their menu prices), all other restaurants would follow suit. personally, i think it is a completely non-hospitable system we have here in the states where establishments charge guests and then expect those guests to pay for their staff by tipping them (whether it is a busboy, server, bellman, houskeeper, etc). unfortunately no one will lead the charge to change because it's highly doubtful that people will flock to a place who charges significantly more than their competition, even if tipping isn't expected.

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i would love to go into best buy and pick out a $3000 plasma hdtv and tell them i only feel like giving them $1000 for it.

Not a good example at all.

you're right. i got a little carried away. the point i was trying to make is that everyone makes small mistakes in the workplace, but only servers are ordered to pay for them out of their own pocket. i do feel strongly that a server (or anyone's) pay should not be taken away due to a mistake that is very often (almost always) due to either someone else's mistake or improper training/management. there are a lot of bad servers out there, but most of them are bad because that's how mgmt trained them to be.

[pennbrew]

I'd imagine it has to do with the large number of European visitors Disney gets. I met some German friends in Colorado last year for lunch(their first time in the US), they even asked me about tipping here. They grabbed the check at the restaurant, and I noticed they left about $3 tip on a $50 or $60 check.

When we left I "went to the restroom" and gave our waitress another $10. Our service had been fine.

So I imagine Disney waitstaff got tired of getting stiffed by people who just don't understand the system?

[BigboyDan]

A manditory gratuity is not a tip, it's just a raise in price.

[Synergy]

I've just recently changed the system at our restaurant, where we present large groups with a bill that has a 15% and an 18% grat on them already, but the customer is free to leave whatever they would like.

So far, we've had 100% of the customers choose the 18% grat.

(This is in Canada, BTW, and our servers make $9.00/hr)

[Mikeb19]

if servers are paid an hourly rate of 2-3$ per hour, a mandatory grat is the only way for them to receive good compensation.  if the establishment decides to pay them a competitive hourly wage, their labor cost would skyrocket and their prices would soar into ridiculousness. 

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As I understand it, it is in a minority of states where servers are paid such low rates. In most states, servers are paid at least minimum wage. While this may not be a "competitive hourly wage" to some, it is most definitely competitive with other service industry jobs.

And in Canada, I believe all provinces require servers be paid at least minimum wage. Prices in restaurants there have certainly not soared "into rediculousness."

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I don't know about elsewhere, but here in Calgary, the price of everything is getting rediculous... Half a million dollars for an average sized home, all of our consumer goods are more expensive than down south (despite our dollar being stronger in recent times), 30 dollars per day for parking downtown - that is, if you can find a spot. You can pay 20 bucks or more for a shitty entree at a chain restaurant, not to mention 5 dollars for a pint of cheap domestic beer (7-8 dollars for import). Add a standard tip and tax to that, and you've just paid over 30 dollars for a shitty meal.

And yes, paying servers minimum wage does indeed factor in prices. And now prices are going even higher because you can't even get a body in the kitchen for less than 15 bucks an hour...

[Porthos]

Gratuity - something given voluntarily or beyond obligation usually for some service.

The moment you have a specific amount added to a bill it is no longer a gratuity. It is a restaurant-imposed server service fee.

I'm curious about the legal implication - can the imposition of a "gratuity" that the diner declines to pay become an actionable offense?

[fiftydollars]

One of my main concerns with a service fee arrangement is that, at least according to California law, unless it is a gratuity the restaurant management can choose what to do with it (and even keep it). While under state law gratuities belong to the servers and do not have to be shared with anyone not providing direct table service, a service charge has no such restrictions. The distinction between a gratuity and a service charge comes down to customer discretion. If the customer has any discretion over how much they leave, it is not a service charge.

Imposing a service charge can, and does, lead to servers receiving little to no added compensation for their service. Most customers, after paying an 18%-20% service charge, are not likely to tip on top of that. Here in San Francisco I know of at least two restaurants where the servers report that management takes a considerable portion of what it calls a service charge. Although the servers do get a portion, the management takes the largest cut. I realize some restaurants can use this service charge to pay the kitchen staff extra, or provide benefits (like Thomas Keller is said to do), or pay for employee pony rides, but in some cases the owner just keeps it.

While I'm sure the management at most restaurants is beyond ethical reproach, I offer this concern of mine for your further consideration.

[Mikeb19]

One of my main concerns with a service fee arrangement is that, at least according to California law, unless it is a gratuity the restaurant management can choose what to do with it (and even keep it). While under state law gratuities belong to the servers and do not have to be shared with anyone not providing direct table service, a service charge has no such restrictions. The distinction between a gratuity and a service charge comes down to customer discretion. If the customer has any discretion over how much they leave, it is not a service charge.

Imposing a service charge can, and does, lead to servers receiving little to no added compensation for their service. Most customers, after paying an 18%-20% service charge, are not likely to tip on top of that. Here in San Francisco I know of at least two restaurants where the servers report that management takes a considerable portion of what it calls a service charge. Although the servers do get a portion, the management takes the largest cut. I realize some restaurants can use this service charge to pay the kitchen staff extra, or provide benefits (like Thomas Keller is said to do), or pay for employee pony rides, but in some cases the owner just keeps it.

While I'm sure the management at most restaurants is beyond ethical reproach, I offer this concern of mine for your further consideration.

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Honestly, after working in the restaurants I have and seeing how much money the servers make up here, I find it incredibly hard to be concerned about servers getting 'screwed'.

I work as a cook/chef. In jobs past I have had employers attempt to screw me out of money. My response - they right the wrong, pay up or I walk.

Anyhow, up here servers get minimum wage (8 dollars per hour) PLUS tips. An average server in a fine dining restaurant can expext to get between 150-300 dollars in tips per night (300 is for busy weekends), on top of their wage. For a 5 hour shift, that's between 195-345 dollars, or between 39 and 69 dollars per hour. Cooks in the same restaurant can expect to get between 10-15 dollars per hour. The real losers are front of house managers - they get the same shitty wages the kitchen gets (sometimes less), they don't work kitchen hours, and they can't claim any tips either.

In one restaurant I worked at (high end, we won a ton of awards from magazines and newspapers), the executive chef was making less money than ALL of the servers...

With the way the current system goes, a server's idea of getting 'screwed' is getting paid a fair compensation - because right now, they're the ones laughing on their way to the bank...

[HVRobinson]

I don't mind the 18% for service. BUT... if the service really sucks... you better believe that the manager will get a visit and a serious chewing. I will expect comps, a reduction or I'll write a letter to my credit card company for a disputed charge on that 18%. I usually tip 20% in most major markets... and 15% or more in most minor markets. (A minor market is a town of less than 5,000) Heck-- even on a $4.25 lunch I leave a buck. But at least make sure that there's some water in my glass and that I have a clean set of utensils before you disappear forever?

hvr

[SundaySous]

Here is a discussion on a Disney related site.

The first poster mentions that the server asked if they were on the dining plan. And then they got lousy service while others around them got attentative service.

The dining plan gets you a 20% discount at many restaurants. Some one in the thread mentions they suspect Disney may not be passing that full 18% to the server.

Seems like another reason they are doing this is because people on the dining plan were tipping at the discounted rate. This 18% will be on the retail rate.

Looking at some other sites they mention a 10% mandatory gratituity at buffets. The few reviews I read were negative on that service. Service being drinks were about the only thing the servers were suppose to do.

Overall as far as Disney is concerned from I see elsewhere is service has been suffering since shortly after Eisner stepped down. Sad I always loved Walt Disney World.

I wouldn't mind a mandatory 18% I think what will be necessary to go along with that would be heads up management. I'd be willing to confront the management when necessary as a trade off.

[filipe]

Hmmm...so if the tip is mandatory, why wouldn't they simply raise prices and wages and eliminate the "tipping" element from the check? Or would people simply feel that prices had been raised for no reason?

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This couldn't be done in the United States because then we'd have the European System of "Service Compris" and we all know we can't do the same thing here that's done in Europe!

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This is the true point about this issue!

For me (but well, I'm european, one of those ackward human beings) a tip is, by definition, a BONUS. So, if it's a bonus, it should not be, by definition, mandatory.

If it's 18%, if it's your choice between 15 to 20 to whatever, for me that's not the big issue...

[filipe]

So I imagine Disney waitstaff got tired of getting stiffed by people who just don't understand the system?

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Is it europeans that doesn't "understand" the system or is it your "system" that S**KS?

(sorry, had to..)

Edited November 14, 2007 by filipe (log)