I don't understand "prepaid gratuities" on Celebrity Silhouette!

[ChucktownSteve]

Before we go any further, we need to understand the difference between tip, gratuity, and service charge. Anyone?

I'll venture to say, a gratuity is usually added automatically while a tip amount is usually voluntary. i.e. a party of ten dining in a restaurant has a gratuity percentage added to the total check while a party of two doesn't have the automatic gratuity thus they usually tip their own standard percentage.

 

A service charge is a fee added to a purchase as in buying tickets. The fee is added to cover the ticketing company's charge above the cost of the ticket.

 

====================================================================

I found the following on findlaw.com

 

It's not uncommon for your bill at a restaurant to come with both a service charge and a tip. Sometimes there's no service charge at all, but still a line for a tip. Other times, neither are there, but one, or both, are expected of you.

 

To make matters even more confusing: While the service charge seems to be a number that's already calculated, the tip is there for you to calculate, but ... sometimes "suggested" tip amounts are also given.

 

Are service charges and tips the same? Not according to a fairly recent addendum from the IRS, which clarified the difference.

 

What Is a 'Tip'?

 

The IRS has set out the following traits as characteristic of a tip:

 

The payment must be made free from compulsion;

The customer must have the unrestricted right to determine the amount;

The payment should not be the subject of negotiation or dictated by employer policy; and

Generally, the customer has the right to determine who receives the payment.

 

Historically, it has been suggested that the term "tip" originated from an innkeeper's sign to ensure faster service. More currently, the general use of a tip remains the same. Customers have the option of tipping their server for punitive reasons (i.e., deducting if the service is bad) or as a reward (if the service is particularly outstanding).

 

What Is a 'Service Charge'?

 

Service charges will usually be clearly indicated as such. If any of the above listed traits for a tip are missing, however, then it is usually a service charge. In other words, a service charge is, when:

 

The payment is mandatory;

The customer does not possess the unrestricted right to determine the amount;

The payment is the subject of negotiation or dictated by employer policy; and

Generally, the customer does not hold the right to determine who receives the payment.

 

The IRS provides an example of a service charge occurring when a banquet hall charges at a pre-determined rate not negotiable by the customer. In most cases, that money is then distributed to employees who rendered the services that the hall required at that event -- for example, bartenders, waiters, and janitors.

 

Service charges are also common if you dine out in larger parties. They are set for the staff and facilities to be able to accommodate you and exert the additional service needed when there are more bodies.

 

Does It Really Matter?

 

But what's the big deal? While the "tip" versus "service charge" distinction may not seem too important to a customer, it may make a big difference to your server. That's because a "tip" belongs to the server, according to the IRS, while a "service charge" may not.

 

So next time you're dining out, take a close look at your bill. If you get to choose the amount you're leaving, then you're most likely leaving a tip. But if you don't get to choose the amount, then technically you're paying a service charge -- even if it's called a mandatory "gratuity" on the receipt.

Edited July 15, 2015 by ChucktownSteve

[yukongold]

Hi there - we always pre-pay our gratuities as it means we then don't have to worry about it at the end of the cruise. If you cancel and don't travel and it is before final payment, then the deposit, gratuities and anything else you paid for would be refunded to you by Celebrity.

 

If you have the first or second seating dining, then you would have the same waiter and waiter's assistant each night, so you would then pay them the gratuities at the end of the cruise if you had opted not to prepay.

 

With open dining, you would be at a different table each night with possibly many different waiters. So they ask you to prepay the gratuities and then they are distributed, rather than you trying to remember who served you and working out how much to tip them.

 

Good explanation.

[philpcruiser]

Next of life's big mysteries: what is the definition of mediocre service?

[yorkyred]

I guess he has this all planned out in advance. He perceives that Celebrity won't deliver great service, and will dispute it! What a negative way to live...

 

I think we all know what's going on here but if you state anything your post is removed.

[ChucktownSteve]

Next of life's big mysteries: what is the definition of mediocre service?

 

I suspect it's anyone who has to bear the brunt of his preconceived attitude that then adjusts their service?

[philpcruiser]

Quick and sure way to receive mediocre service: inform your cabin attendant and waiter on the first day of your cruise that you intend to stiff them. Then you will surely have mediocre service (along with dirty towels and cold food).

[hcat]

We like the option to pre pay grats....dine in BLU and find it convenient ...no more need to sort out tip envelopes. We think everyone should be req to pre-pay the basic amt, and after reading some comments here definitely think it's a good idea.

 

We almost always tip extra to stateroom attendants, waiters, bar waiters, sommelier, specialty rest waiters..

 

BTW I believe the spa grat is now 18%

[paul17]

But if you do cruise and want to remove your gratuity, I suggest you do it the first day you embark. Only a coward would do it the last night.

I agree. But I cannot, I've prepaid gratuities.

I like your post #201 (very well explained). It say that by IRS:

What Is a 'Service Charge'?

....

The payment is the subject of negotiation

I cannot negotiate with Celebrity prepaid gratuities. Does it make Celebrity a coward either ? at least we were cowards equally.

 

But I am proud of Celebrity because I just got an official answer to my question:

 

To address your question regarding times when prepaid gratuities might be adjusted, this would apply to the rare situation when a guest does not feel their dining room waiters or stateroom attendant provided them with desirable service. If that is the case, we encourage guets to speak with a Guest Relations Officer so they may assist with adjusting the pre-paid gratuities charge.

 

It does not say about specific time. I think I can adjust prepaid gratuities anytime even at the very last moment. (same as with Carnaval) Am I?

Edited July 15, 2015 by paul17

[GUT2407]

Yes, it was part of a promotion on my last two cruises, got free tips, free drink package and OBC. This was very common until a few weeks ago.

 

I am sorry for my English. It is not my native language. But the question was who pays gratuities to ship crew when you get free prepaid gratuities promo.

 

 

I wonder about pre paid Grats.

 

When they give me OBC I have to spend it with them so it is only the "cost price" they are really out by. Say DW buys a $500 bag, there goes the OBC but the bag only cost $00 wholesale,

 

Drinks package the same. Package ma cost $420, but the booze probably only costs the line about $150-$200, also what grats do the bar tenders get.

 

But if I take Grats are they out the full amount or do they pay the crew less than normal.

[ChucktownSteve]

I wonder about pre paid Grats.

 

When they give me OBC I have to spend it with them so it is only the "cost price" they are really out by. Say DW buys a $500 bag, there goes the OBC but the bag only cost $00 wholesale,

 

Drinks package the same. Package ma cost $420, but the booze probably only costs the line about $150-$200, also what grats do the bar tenders get.

 

But if I take Grats are they out the full amount or do they pay the crew less than normal.

 

The ship's stores are not owned by Celebrity but by an outside vendor. Celebrity has to compensate them for the guest's purchases from the OBC at probably an agreed upon percentage, they get to keep their purchase royalty amount before making reimbursement or apply it against contracted rents. That's between the store vendor and Celebrity.

 

The servers/bar tenders are given gratuities based upon the amount collected not cost of goods they serve. The gratuities go into various pools then each pool is divided by those included, classified server staff based upon whatever formula exists.

[Andy]

Hi Everyone,

 

As several argumentative, and member directed posts required deletion, this thread is now closed.

 

While we all understand that members are very passionate about certain topics, we should always be civil to each other. As a reminder.... instead of going to battle with a member you may disagree with, I highly recommend making your case about the subject at hand, and not against the member. Member directed comments, and, disrupting the forum are violations of our Guidelines, which may result in Guideline reminders and/or losing your posting privileges.

 

The best thing to do, is to use the Alert Triangle, which will get our immediate attention. Thanks very much for your understanding and participation.