Tipping Point

Tipping Point: Restaurants Must Put Customer Experience First in Their Gratuity Policy

You’ve finished a delicious meal, the waiting staff were attentive, the wine has left you feeling warm, fuzzy and generous. The bill arrives, you request the card machine so you can pay, and when you ask the server to add 10% to the total, they politely ask if you would please leave the tip in cash.

Things just got awkward.

You have chosen to pay by card for a reason. Maybe you have reserved your cash for your taxi home. Perhaps you don’t feel the service was above par so you don’t want to pay more than the requisite 10%, but you also don’t want to ask to break a large bill.

What started as a perfectly pleasant customer experience just hit a snag at the final exchange.

In today’s increasingly cashless culture, card payment is convenient, secure and instant. We aren’t accustomed to fussing with real money any more, nor do we need to carry around large volumes of cash that could be lost or stolen.

Now, this server asking for their tip in cash may seem cheeky or ungrateful, but if we really look at the situation here from the other point-of-view it is easy to understand why they made the request.

What happens to tips when you pay by card?

It can be a bit ambiguous. First, many restauranteurs sit on staff tips for a month or even longer before paying them out. Tips are often collected and shared evenly between waiting and kitchen staff, which is fair enough; Kitchen staff often lose out on the potential to supplement their earnings because they are not customer-facing.

Many restaurants also charge their staff an administration fee for handling tips, a practice known as ‘skimming’. Now that can leave a bitter taste for both staff and clientele.

Tipping policies can vary wildly between restaurants. Some have no policy at all, some automatically add gratuity to your bill and I even went to one restaurant a while back that had banned tipping entirely because it was ‘part of their culture to serve’.

Should tipping be banned altogether then?

I can understand the thought process behind establishments who are jumping on the trend to ban tipping. It is a decision made with enhancing customer experience in mind. These establishments ban tipping, and simply pay their staff more – and increase the menu prices accordingly. All very transparent. But, ultimately totally unsuccessful.

Studies have shown that establishments who have banned tips have negatively impacted customer experience. Whether it is just that we don’t like change, or the higher prices make it feel like we are getting less value for money, or that the decision to reward great service has effectively been taken out of our hands – the reviews are in, and they aren’t positive. Many restaurants who banned tipping have since reverted to the traditional method of payment.

The restaurants who have banned tipping are onto something, they have just taken it in the wrong direction.

Banning tipping is not the answer to removing tipping ambiguity or awkwardness. Restaurants do need to have a clear tipping policy, and they need to make it easy and painless for the customer to tip, or not to tip, if that is their choice. This means they need to make it easy and painless for their staff to receive their tips and be transparent about what happens to tips paid by card.

So many decisions about how to optimise customer experience and customer service begin and end with treating your staff well and attracting and retaining the right talent. It is clear that tipping culture does improve customer service, but that does not mean that good waiting staff are not intrinsically motivated to provide great service when they feel valued by their employer and customers. It is your front-line staff who will keep your customers happy.

Make tipping a formalised part of the transaction.

A simple check box on the bill about whether the customer wants to add no tip, 5%, 10% or their own suggestion actually removes the need to discuss the tip with the server. Tipping should be a polite nod of gratitude, not a grand gesture. Equally, not tipping shouldn’t be a drama. The customer should have control and as little fuss as possible either way.

At nlighten, we are all about pioneering ways to ensure the customer is at the centre of your business. Our bespoke training solutions can help you and your staff transform how you think about your business, your customers, and the customer journey. Find out more here.

View the previous nlighten article by Nathalie Schooling: A non-negotiable customer experience

nlighten. enhancing customer experience: www.nlightencx.com

Customer Experience Masterclass: Get results by thinking like a customer experience pro – Invest a day in our value-packed interactive CX coaching. The quality of your customers’ experiences defines your success. | JHB – 9 October 2019