When L'Escargot, one of London's oldest French restaurants, reopened after a refurbishment last year, business was not only in the interior. they were two different things.
Bosses quietly increased the service charge on customers' bills, raising it from 13.5% to 15%.
Management argued that it was simply a matter of paying that amount . in line with “most other quality restaurants” in the capital. Yet it caused an unexpected furor.
Shortly after the opening, a social media user posted a copy of the restaurant's bill on the online forum Reddit, calling attention to the increased fees. This has sparked heated debate about the direction of tipping culture in the UK.
“We're not Yankees. Tips are given for good service and are not mandatory,” one Reddit user said indignantly. Another said: “We must do everything we can to reject this Americanism. It must be one of the worst cultural exports to come out of it.”
Comments like this sum up fears that the UK is moving towards an American-style tipping culture, where a 20% tip is not only expected in restaurants, but also in bars, cafes, taxis and many other businesses – and not only in restaurants. Leaving a tip is considered a serious insult.
Tipping was once a relative rarity in Britain: an optional courtesy intended to show appreciation for excellent service.
However, the rise of service charges on visitors' bills means that in some parts of the country, particularly the capital, the charge has become expected, causing outrage among visitors who feel they are being unfairly treated.
“These accusations are hateful,” says Professor Michael Lynn, an American academic who has written dozens of research papers on tipping. “Restaurants that eliminate voluntary gratuities and replace them with automatic service charges see their online ratings drop. Are you saying that I should tip? This is a voluntary activity.”
Nearly half of 2,000 consumers surveyed by payments company Dojo said they would rather not pay a service fee and decide how much to tip themselves. Only a fifth said they preferred a service charge.
Service charges are now almost ubiquitous in London restaurants and other establishments and are usually automatically added to bills. A 12.5 percent fee is standard, but fees ranging from 15 to 20 percent are also charged.
Restaurateurs insist that service fees are always individual. But critics argue that by automatically adding this amount to the bill, visitors are put in the awkward position of not paying it.
“There is plenty of research showing that there is a status quo bias, and that It’s harder to take something away than to add something,” says Professor Lynn.
Steve Perez, owner of two hotels in the Peak District, said: “I think most people feel quite uncomfortable. Even if the service wasn't that good, you don't have to get into an argument with the server.”
Perez doesn't include service charges on his hotel bills. Instead, they include a line stating that tips are always welcome.
This practice is increasingly becoming the exception rather than the rule.
Tipping data shows why restaurants may choose to charge automatically. According to SumUp, which operates contactless payment terminals, the average cost of tips given to cafes, restaurants, hairdressers and other businesses fell from £4.65 in 2022 to £2.85 last year as consumers tightened their belts at a time of cost of living crisis.
But Stuart Gillies, former chief executive of Gordon Ramsay Restaurants, says government bureaucracy is to blame for rising service charges.
“Up until the early noughties, tips were given in cash, and then the government introduced new rules,” says Gillies, who now runs restaurants in Chislehurst and Sevenoaks. “They wanted to introduce a service charge so that they could then track all this income and also tax it.”
Reducing cash also helps it grow, says Kate Nicholls, chief executive of UKHospitality.
“The increase in service fees is largely due to the move to cashless transactions and the increased use of electronic payments and electronic tipping,” she says. “Establishments have experienced customers paying with a credit card and then not being able to reward staff.”
Many card readers allow operators to include the ability to tip, typically offering 12.5%, 15% or 20 percent is added to the bill.
SumUp says more and more of its customers are turning on the feature. According to Bloomberg, 2.9% of users now have it turned on, up from 2.1% in September 2021.
One of the consequences of ending tipping is that demand for digital technology has emerged in places where They weren’t there before, for example in pubs. Given that the average pint of lager costs £4.71, a tip of 20 would add £3.76 to the bill when buying a beer for four people.
“Historically, tipping was not part of the pub culture and was commonplace. more associated with restaurants,” says Eddie Gershon, a spokesman for pub chain JD Wetherspoon.
Perhaps thanks to rising service fees and a push towards tipping, other fees are cropping up elsewhere. The Scotsman Group, for example, has introduced a 2% charge on orders placed at the bar at its bars and pubs.
This has understandably left some drinkers confused. Many customers are also annoyed by the lack of transparency in service fees.
“Culturally, the US and UK are very different. In the US, everything is much more transparent because they tip the waiter,” says Sungjin Park. employment lawyer at Keystone Law. “Here we are charged what is called a service fee, but in most cases clients have no idea how this money is distributed, if at all.”
In many restaurants, tips and service charges are distributed by the staff themselves using the “tronc system.” The money is pooled and distributed to all employees, including kitchen staff who would otherwise miss out on tips.
This system guarantees employees a regular pay raise throughout the year, and cash is exempt from tips. National Insurance charges.
Laws coming into force later this year will require employers to ensure that all tips, including service charges, are distributed to employees in a transparent and fair manner. Financial penalties will be imposed on employers who break the rules.
Chef Adebola Adeshina, who runs The Chubby Castor in Peterborough, says: “Automatically adding to the bill is a good idea as it leaves the customer with less to pay. worry and it ensures smooth payment times.”
Mark Harris, a restaurant industry consultant, says: “Now that service charges are coming back to them, [staff] can actually earn a very decent wage, which is really important , because hopefully it will bring people into the industry that we desperately need.” at the moment.”
There were 107,000 vacancies in the hospitality sector in the three months to April, according to the Office for National Statistics. The industry is second only to health care and retail in terms of job openings.
Many executives are hoping that extra income in the form of tips and service fees will help make hospitality a profession that has long been stereotyped by low wages and poor performance standards. working hours – more attractive to potential employees.
Tipping is definitely one of the benefits. for workers in the US hospitality industry. However, the opportunity to earn significantly more through tips is reflected in wages.
The US minimum wage is only $2.13 for tipped workers, although some states have higher minimum wages, according to compared to $7.25 (£5.75) in the US. other professions.
The statutory minimum in the UK is already more generous: it is £11.44 for those over 21.
So UK visitors may reasonably wonder why they are being asked to increase wages even further?
Herein lies the industry's dirty secret: the entire business model is based on these highly discretionary costs.
“If we remove this 12.5% levy, the British will probably give 5%. But then all restaurants will have to raise the price of food to be able to pay for [staff],” says Chris Galvin, co-owner of Galvin Restaurants, a group of high-end British and French restaurants.
Attempts by some restaurants to find a solution have failed. success. The owners of Chinese restaurant chain Ping Pong were recently forced to defend their decision to scrap service charges entirely and replace them with a puzzling 15 percent “brand charge” that was automatically added to diners' bills.
The company said it increased employee wages to offset the reduction in service charges. The company insisted the move would provide “wage stability throughout the year, reducing the impact of seasonality.”
Tim Thorpe, chief financial officer of Ping Pong's parent company, said at the time: “Ultimately, we prices need to be raised. And some of the feedback we got was, “Why don't you just raise your prices, it seems like you're doing it a little under the counter.”
“But the perception Raising prices by 12 to 15 percent is easy terrible. So that's part of what we have to try to manage.”
Gillis, a former executive at Gordon Ramsay Restaurants, says: “If you stick 12 percent on every dish and just tell customers it's all inclusive, most the public will actually react and say “no, it's too expensive, because they will immediately appreciate it at face value.”
Be that as it may, patrons and drinkers are finding that their bills are higher than expected. service charges hidden in the fine print may suggest that things have already become too expensive.
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