Some say the practice of tipping began in feudal times, when lords on horseback threw gold coins at 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 is a multibillion-dollar exception to the rule that says people won't pay more than they have to; restaurant patrons in the United States alone fork over about $16 billion in tips every year. It would seem that we should have it down to a science, but we don't. And for good reason: There are few, if any, rules to go by. That said, fortunately there are general guidelines.
The first thing to do is to understand the terminology: While “tip” and “gratuity” mean essentially the same thing, a service charge is a different animal. Tips are voluntary and usually given in person, in cash, before, during, or after the person provides the service. In most states, tips are not subject to sales taxes, unless the tip or gratuity is really a service charge, or is inadvertently called a service charge in the, according to Jed Mandel, a partner in the Chicago — based law firm of Neal, Gerber & Eisenberg. Service charges, which are mandatory, are subject to sales tax in most states. Service charges also don't necessarily go directly to the employees, at least in their entirety. Often they are used to offset other expenses and cost increases.
If you hold a number of food and beverage events over the course of your meeting, the sales tax on service charges can really add up. If it's in the contract and is mandatory, more likely than not it will be treated like a service charge by the state taxing authority, says Mandel. Some states may tax it; others may not. When in doubt, check state laws.
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 the mandatory service charge with an agreed-upon dollar-amount pool that will be distributed to various personnel — with the meeting planner's input post-con 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.
To keep double-dipping at a minimum, you can include a provision that requires hotel personnel to politely refuse well-meaning attendees' tips. But even if attendees know that the association has already taken care of gratuities throughout a facility, chances are they're going to tip anyway if someone goes above and beyond for them.
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.
Stepping Out of Your Comfort Zone
There are a fair amount of standard tipping structures 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 (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 included; and 15 percent to 20 percent of the bill for wait staff.
“It's complicated,” says Michael Lynn, associate professor at Cornell University 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 conventions isn't nearly as well-defined as simple restaurant situations.”
He says people tip for two reasons: to comply with 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 of figuring out tipping strategies is to budget a dollar amount per meeting attendee for gratuities. But if you don't know, don't be shy, says Lynn. Ask the sales manager or convention services manager what is normal and expected at that facility.
Some planners like to have tips distributed by the facility's management after the meeting's conclusion and have it counted in the master bill; others feel that tips mean more when delivered in person, perhaps with a note of thanks. Some planners like to meet with service personnel before the event, explain how important their work is to the meeting's success, and tip there and then. Others like to tip on the spot when a good deed is done. However you time it, get everyone's name so you can personalize the tip and keep track of who was tipped what so that your records are complete should you be audited.
Even if there is a service charge, you'll probably want to express gratitude when someone exceeds your expectations. The service charge doesn't cover it, because they would get that even if service had been poor. “The beauty of tipping is that the voluntary nature of it makes it communicate something,” says Lynn.
Tips from the Trenches
Most planners agree that the first people who should be tipped are the nonsalaried employees who make it all happen, from working the graveyard shift to set up that beautiful plenary session to gracefully managing bizarre requests with a smile. Keep in mind that, according to Manny Gonzalez at The Original Tipping Site (www.tipping.org), concierges are almost always tipped, but front desk personnel almost never receive gratuities.
While convention service managers often prefer that gratuities go to back-of-the-house staff members, when a CSM goes all out, well, that deserves something, too. Rather than cash, it can be a good idea to give people on this level a gift that reflects their interests — something that shows you put some thought into it and took that person's interests into account, says Mark Brenner, author of Tipping for Success. Maybe personalized golf balls for an avid golfer, for example. Often, you'll find, a glowing letter to the general manager outlining the special treatment and service will mean a whole lot more than cash.
Sources for this article include: Michael Lynn, PhD, associate professor of consumer behavior, Cornell University School of Hotel Administration, www.hotelschool.cornell.edu; Mark Brenner, author of Tipping for Success, www.tippingforsuccess.com; Bernice Kanner, author of Are You Normal About Money?, www.marsh-agency.co.uk; Taylor Nelson Sofres Intersearch, www.intersearch.tnsofres.com; Manny Gonzalez, The Original Tipping Page, www.tipping.org; Meeting Matters MIMlist listserv, www.mim.com; Jed Mandel, Neal, Gerber & Eisenberg, Chicago; Market Facts, www.marketfacts.com; Advice with Dr. Dave and Dr. Dee at www.drdaveanddee.com/tipping.
Gratuitous Gratuity Facts
People tip more when the weather is good.
Older people tip better than younger folks.
The more people are in a party at a restaurant, the less they tip: Solo diners average 20 percent, duos 16.9 percent, and threesomes 15.2 percent.
Women tend to tip a little better than men; people who have waited tables tip better than those who have never held a customer service job.
Restaurant servers who lightly touch their customers and crouch down next to them get 20 percent to 40 percent better tips than those who don't practice nonverbal “liking” behaviors. And the annoying habit of having wait staff introduce themselves is based on science: They get better tips when they're not anonymous.
94 percent of people tip wait staff something, regardless of the quality of the service. Most people will leave 15 percent even if the service is lousy.
Waitresses who draw a smiley face on the bill get better tips; waiters who do the same get worse ones. Wait staff who write “thank you” on the bill see their tips increase by 2 percent, regardless of gender.
Tipping is more prevalent in countries whose populations are achievement-oriented, status-seeking, extroverted, neurotic, and tenderhearted.