The tipping scandal

You may have had enough of scandal these past few weeks, what with the goings on at the top of Istithmar World, Dubai Properties, Damas and the rest. There’s not much you or I can do about them, other than watch and wonder who will be next.

There is, however, a scandal that you can do something about, one that is going on around the clock throughout the GCC. In fact, it is a practice that most people are unaware of, and to my mind represents theft on a scale as grand as any that have made headlines recently.

A while ago, I interviewed the head of a major hotel chain in the GCC. He was moaning about the difficulty of retaining staff. He said there was a recruitment war going on, and that all hotels were engaged in poaching each other’s staff. It was going on at all levels, he said, from bellboys and valets to managers.

When I asked him what he was then doing to make his staff happier in order to retain them, he looked blank. Then he thought for a bit. And then he said: “well, we are giving them a higher percentage of the tips.”

I told him I must have misheard him: “I thought you just said you’re giving your staff a higher percentage of their tips?”

“That’s right,” he said. “They seem to be happier now.”

As my tape recorder whirred gently between us, I asked what his hotel group used the rest of the tip money for. Utterly nonchalantly, he said: “Oh you know, accommodation costs, transport, that sort of thing.”

So, to be absolutely clear, you’re using voluntary donations from paying customers intended as a reward for good service to pay for housing and transport for your staff?

“Err. Yes.”

Charming.

I am not going to single out the name of the hotel in question, because since I found out about this practice I have come to realise it is going on in virtually all hotels and bars and restaurants in the region. People who work in the industry tell me it is common practice. They say service charge automatically added to bills is highly unlikely to find its way into the pocket of the man or women who served you, and even cash is not guaranteed to be allowed to be kept. This is horrendous.

It is a plainly obvious fact, but clearly one that needs stating: a tip is intended as a gift from a patron to the person who serves them. It is meant to be a reward for attentive service, and has nothing to do with the institution in which they were served. After all, there is a separate bill for services rendered. The tip is entirely personal.

For hotels and bars and restaurants to be confiscating this tip — for that is effectively what they are doing — and then giving the person who earned it a portion of it, constitutes theft. Massive theft when you consider the millions of tips that are left every year. I feel sure that if customers knew that this was going on, they would realise that the tip had in fact been bastardised into a way for companies to squeeze more money out of people stupid enough to set foot in their premises, and be rightly angry.

The solution? From now on when you’re presented with a bill upon which a service charge has been automatically added, ask the person serving you if they will receive it. If they say no, cross it out and give them cash. Actually, it is probably better to always tip in cash. At least cash can be stashed in a pocket.

The difference in earnings between the people who eat in restaurants and bars in this part of the world, and the people who serve them is already big enough. There’s no reason we should stand by while they are stolen from.

Damian Reilly is the editor of Arabian Business English.

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READERS' COMMENTS

Tipping Scandal
Posted by Rita Hicks, Dubai, United Arab Emirates on Monday 9 November 2009 at 07:25 UAE time


It is all very well for Damien to report that we should give waiters cash. However, this is a no win situation as the waiters just go and put the cash in a tip box. Guess who is going to put in his hand and take out the biggest share??? which leaves the waiters with nothing ... how do we get around this situation??

Tips
Posted by Marijke, bahrain on Sunday 8 November 2009 at 16:32 UAE time


Steve you are 100% right. Managers and bosses have no right to use tip money for any other purpose than todistribute it to the staff members of the outlet concerned. It is normal in hotels to equally share in tips, and it's good that cooks and cleaner boys get a small share as well. But definately not Managers. And not to cover costs the hotel should cover as mentioed in employees contract.

Tipping Scandal
Posted by Michelle on Sunday 8 November 2009 at 16:17 UAE time

As these hotel chains exploit their hard working staff in every way possible e.g. from working long hours, unpaid overtime, days off not being given, etc there is nothing stopping the hotel chains from further degrading their staff by a 'company policy' that says they will be searched for cash i.e. tips at the end of their shift and then it being 'stolen' from them.
Pathetic!

10% Service charge almost never goes to your waiter
Posted by Juan Fernandez, Dubai, UAE on Sunday 8 November 2009 at 15:24 UAE time


My wife realized of this sometime ago so started enquiring the waiter of every place we went for dining. 80% of the waiters we asked said that the tips and service charge goes to the company, 20% said that they get a 5% of the service charge once they meet a high minimum ammount per month. In a restaurant, if they are paying 5 waiters 1200dhs/each salary that means 6000dhs a month in staff costs. Service charge of 10% + additional tips would cover the cost of the staff in 2 working days. That seems a bit unfair since when I'm tipping a waiter is because i thought they were nice and did a good job. From now on i asked to have the 10% service charge removed, which is something everybody have the legal right to do. Any restaurant managers out there who can dispute that?

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