Some say the practice of tipping began in feudal times, when lords on horseback threw gold coins to peasants to ensure safe passage through rough areas. Others say it began in 16th-century English pubs, where cash was handed to languid servers “to insure promptitude.” Wherever the practice came from, people tend to feel strongly about it.
Tipping nowadays is a multibillion-dollar wage generator. Restaurant patrons in the United States alone fork over about $16 billion in tips every year. It would seem we should have it down to a science — but we don't. Many people aren't sure who to tip, or how much is appropriate for the level of service received. And for good reason: There are few, if any, hard-and-fast rules. But there are general guidelines you can use to shine a light into the murky world of tipping.
- Tip versus service charge
While “tip” and “gratuity” mean essentially the same thing, a service charge is a different animal. Tips are voluntary in nature, and usually are given in person, in cash, before, during, or after the person provides the service. In most states, they are not subject to sales taxes, according to Jed Mandel, a partner in the Chicago — based law firm of Neal, Gerber & Eisenberg, unless the tip or gratuity is in reality a service charge, or is inadvertently called a service charge in the.
Service charges, which are mandatory, are subject to sales tax in most states. Service charges don't necessarily go directly to employees, either, at least not in their entirety. They are often used to offset other expenses and cost increases.
If you hold a number of food and beverage events over the course of your meeting, that sales tax on service charges can really add up. If it's in the contract and is mandatory, more than likely it will be treated as a service charge by the state taxing authority, says Mandel. Some states may tax it, others may not. When in doubt, check state laws. The only sure way to keep gratuities out of the range of sales tax is to keep them out of the contract, says Mandel.
- Make sure the money goes to the right people
Whether it's a service charge or a gratuity, planners who put these costs in the contract want to make sure the money goes to the most deserving people.
Ask the hotel to agree in the contract to replace mandatory service charges with an agreed-upon dollar amount that will be distributed to various personnel — with the meeting planner's input — post-conference to make sure it goes to the right staff members. You also can put a sliding scale into your contract that will allow you to tip up to a certain percentage more — or less — than the contracted amount.
- Avoid double tipping
To keep double-tipping at a minimum, you can include a contractual provision that requires hotel personnel to politely refuse well-meaning attendees' tips. But even if attendees know that you have already taken care of gratuities, chances are they will tip anyway if someone goes above and beyond for them.
- Decide whether or not to tip separately
Some planners would rather pay the tax on the negotiated service charge and tip separately, because a negotiated tip seems counterintuitive to what they are trying to do, which is express gratitude for good service. Others like the convenience of having it taken care of up front while maintaining control over who gets tipped. The strategy you use will probably depend in large part on your tipping philosophy — and on your budget.
- Know whom to tip — and how
There are a fair amount of standard tipping guidelines for the hotel environment: $1 per bag for bellhops; $5 to $10 for concierges who provide extra services such as making reservations, $1 to doormen for hailing a cab; $1 per day for housekeeping staff (daily tipping is preferred because different staff may work on different days); 15 percent to 20 percent of the bill for spa services, unless a service charge is already included; and 15 percent to 20 percent of the bill for wait staff.
But the list doesn't end there. Other staff members who could be considered tip-worthy include AV and technical staff; banquet managers, chefs, kitchen staff, and servers; conference services managers; exhibit hall contractors; group reservation staffers at a golf course; housemen; pastry chefs; runners and messengers; sales managers; shuttle and bus drivers; telecommunications staff; and telephone operators who do an outstanding job. Even front desk staff, who, according to Manny Gonzalez at The Original Tipping Site (www.tipping.org) almost never get tipped, may be deserving of gratuities.
This is where the murk really gets thick. “It's complicated,” says Michael Lynn, an associate professor at Cornell University's School of Hotel Administration. And he should know. With a background in psychology, he got his PhD by studying tipping. “Nobody should feel bad about not knowing exactly what to do. Tipping at meetings isn't nearly as well-defined as simple restaurant situations.”
He says people tip for two reasons: to comply with minimal social norms (servers expect it), and to express gratitude for an exceptional job. When it comes to service charges, the social norm may be different in different facilities. For example, employees at many convention centers are not allowed to accept cash gratuities because they are government employees or because their union rules don't allow it. Noncash gifts, however, may be acceptable, even greatly appreciated.
One common method to determine a tipping strategy is to budget an approximate dollar amount per meeting attendee for gratuities. But if you don't know, don't be shy, says Lynn. Just ask the sales manager or convention services manager what is normal and expected at their facility.
- When to tip?
While most planners hand out the gratuities after the meeting — after all, you can't know who goes above and beyond until they've done the job — there are times when it makes sense to flash some cash early. Planners agree that one-time service people, like the guys who haul in your boxes, should be tipped on the spot.
- A tip isn't always money
While convention service managers often prefer that gratuities be given to the back-of-the-house staff members, when a CSM goes all out, well, that deserves a little something, too.
Rather than cash, it can be a good idea to give people on this level a gift that reflects their interests — nothing personal, but something that shows you put some thought into it and took that person's interests into account. Often a glowing letter to the general manager outlining the special treatment and service received will mean a whole lot more than cold, hard cash.