Service not included

By Sarah Modlock

05 October 2005

There is no doubt that money gets people excited. Earning it, spending it, sometimes saving it sets pulses racing. Frustrations with banks and credit card issuers get us worked up too. But our greatest everyday finance bugbear is reserved for relatively small amounts of money, also known as tips.

The British are not very good at tipping. It can make us feel awkward and unsure. Many of us don't have the confidence of our American cousins when it comes to complaining and witholding cash following poor service. We are also conscious of 'not making a scene' when dining with business contacts and loved ones. We are better than we used to be. But it doesn't help that there is no standard gratuity system in the UK.

Sometimes a bill has no extra charges beyond your food and drink and any gratuity is genuinely left to your discretion. Usually there is a service charge - typically 12.5% - included in the total. If you're really lucky, you can enjoy everyone's favourite add-on: the cover charge. Surely if I had wanted a couple of packets of stale breadsticks, I would have ordered them? Charging a customer for something they did not order - whether they eat it or not - is a rip-off.

In many countries, service is included in the price of your meal and the staff share receipts. Any cash tip on top of that is either a cultural expectation, as in the US (check out bitterwaitress.com unless you're faint-hearted), or an unusual bonus, as in France. The dogs dinner that is our gratuity system prompted the Earl of Bradford, owner of Porters English Restaurant in London, to attempt to get a Bill through the Lords to abolish the hidden service charge in 1996. It failed due to lack of government support but his idea for reform would be along lines of the French system - to enforce a mandatory, uniform service charge across the board, with the knowledge that you shouldn't tip any more on top, unless you're particularly delighted. Or drunk.

Of course the intriguing thing about service charges as a percentage of the bill is that it takes a waiter no more effort to open a £20 bottle of wine than £60 bottle. But you will pay him three times as much in service cost for the privilege.

That said, your waiter is not to blame for the fact that restaurants get away with being the most stingy employers around. Waiting staff are paid what amounts to a nominal salary because it is 'accepted' that they will make up their income through service charges and tips. Some years ago when I was a student, I had a part time job as a waitress. It was non-stop hard work but provided me with valuable insights now I am on the other side of the menu. The restaurant paid us £15 for a six to eight-hour shift. This measly amount was dwarfed by the £60-£100 I made from shared tips per night. The same is true today of almost all restaurants across the country. Until this employment anomaly is rectified, there is little hope of us having a clearer or fairer gratuity system.

Double cream

The red mist really does start to descend when the 'open' credit card slip is presented. This happens in as many as one in five restaurants where the service charge is included in the bill but you are given the chance to add more money when you sign the payment slip. It seems that nothing annoys us more. The idea that you are invited to pay more gets peoples' backs up but cynics believe that when you are perhaps trying to pay discreetly, are a little tipsy or are thinking about collecting your coat and getting a cab (or all of the above) the 'open' credit card slip suggests that service was not included after all and so encourages diners to, erroneously, tip twice.

'Leaving the credit-card receipt open after you've included service is my biggest beef of all,' says Lord Bradford. 'It just makes what should be an enjoyable time a far less friendly experience. What is required is government action to deal with it - without it, it's a free-for-all, and some major restaurants will go on with this blatant rip-off.'

Richard Shepherd, the owner of Shepherd's and Langan's in London, defends the practice. 'I've done both systems in my time: left the credit-card slip closed and left it open. When I used to leave it closed, so many people were up in arms, saying, 'I wanted to add on a few quid.' If the bill's £48, they want to round it up to £50, even though they know service is included. They really hate paying with a card and then having to pay cash separately.'

These days, you also have the option of playing dumb. Since the introduction of fraud-busting chip-and-PIN cards, tipping in restaurants has gone down by 15% as technophobic diners struggle to provide anything more than four digits.

There is also the mystery surrounding whether or not the waiter gets the tip if it is added to the bill. Apparently, this is down to the way that the Inland Revenue taxed restaurants. Any tip added to a credit card slip was subject to national insurance. The rules have now changed and restaurants can deduct the gratuity before processing the rest of the payment.

As the law stands, you are within your rights to remove a service charge that has been automatically included in your bill. I don't know whether it's my waitress experience but I am very happy to tip on top of a service charge if my table has been very well looked after. And no, I cannot claim it on expenses. Equally, as a feisty hackette, I have no qualms about quietly and politely raising issues and once refused to pay service charge after an appalling experience.

If in doubt, take a tip from Groucho Marx in A Night At The Opera: 'Do they allow tipping on the boat?' 'Yes, sir.' 'Have you got two fives?' 'Oh, yes, sir.' 'Then you won't need the ten cents I was going to give you.'