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Thu 5 Nov 2009 04:00 AM

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The tipping scandal

Forget Damas, Dubai Properties et al, Damian Reilly says there's one scandal you can do something about.

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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John 10 years ago

The Independent in London did a marvellous job of exposing this very same scandal, and AB should do the same in the Gulf. It is actually blatant stealing from customers. I always make sure that the extra tip (above the service charge) is given in cash and make sure the waitron pockets it in front of me. They never say no and are often shocked. But that is the only way to help immediately. The fact that the greedy louts who own the hotels and bars etc. subsidise already hopeless wages with money from tips is fraud, plain and simple, and the establishments should be boycotted as a result.

salman 10 years ago

Please excuse my ignorance...but can we just refuse to pay or dueduct the service charges from our bills...

Red Devil 10 years ago

In a country where there was uproar concerning the treatment of construction labourers (which actually seemed to have an effect) then surely this should be the next one. I tip all the time - generally regardless of the service provided and am actually appauled (yet not surprised) that the greedy owners are doing this. As said...it's stealing. Plain and simple. It shows an utter lack of respect to their staff and the paying customer. I feel robbed. The pay of waiting staff is probably on par with low paid construction staff. Someone should make a big fuss over this. Arabian Business....step up to the plate.

Dod 10 years ago

I agree it is a scandal, but if you cross out and deduct the amount on the bill will the waitress not be in trouble and have to reimburse the amount to the retaurant? it would not surprise me.

John 10 years ago

This is a winner! Go after the fraudsters and you will have readers for life!

gordon 10 years ago

It does say mandatory? can we take it off?

hotelier 10 years ago

Thats what service charge is, cash straight to the owner. Often times in certain GCC coutnries like Q hotels even call it Tax when there is none and apply it accross the board on all charges including accomodation. Government intervention is needed here in the hospitality industry to implement a fair service charge scheme that distributes service charge to the employees. If that were introduced though I only wonder what kind of salary reductions would occur to compensate.

munter 10 years ago

I always tip those poor jokers that work out in the heat all day pumping gas. Only 5 or 10 dhs but I figure enough folk do it then it adds up to something. I notice locals doing the same so assumed it goes directly to staff. Not so sure now...

Greg 10 years ago

I thought everyone knew about this. I never actually heard this from anyone before as I always assumed it anyway, whether here or anywhere else in the world, therefore I always give cash tips. If service charge is added though I don't tip, as you can't get round that. Unfortunately with the article above I wouldn't now put it past hotels to check staff's pockets in and out, and confiscate any extra money they get as if they have 'stolen' it.

Elan 10 years ago

I applaud Mr. Reilly's piece which barely exposes the tip of the iceberg. I would like to see a much broader expose done of tipping in the Gulf, extending beyond F&B to all service industries. I recently stayed at one of the region's best hotels - my room rate included breakfast, however, i still had to sign a bill for administrative purposes. fair enough. i left cash tips each time, yet found unauthorized breakfast tips added to my bill at check out! At my Golf Club, the bar and restaurant managers force wait staff to fork over 50% of their cash tips; they never see any that are charged. A Filipina who regularly does my nails lost her everything during recent floods in Manila. i saw her the day before she was traveling home to replace everything for her husband and children and gave her AED500 to help. Her manager promptly took the money - in front of me! - and added it to the "pool", despite the fact that it was a gift exclusvely for one person in a distressed situation. Far worse are those who don't tip at all, using this management abuse as an excuse to get out of tipping. The people who come and work in service industries here do so at great personal sacrifice, earn meager wages, live in less than desirable conditions - and deserve our gratitude and respect. And the few dirhams from tips that would make a difference to their families at home.