Prepaid Gratuities, what % goes to who?

[hpecorari]

First a little background. My son used to work at a restaurant (well known chain) at $2.25 per hour + tips. Due to minimum wage laws if the total tips for the shift did not add up to minimum wage, the restaurant was required to make up the difference to guarantee the minimum wage. In other words a lot of the tips were not really a tip at all - just part of overhead that the restaurant took out of the menu price.

 

Now my daughter had a minimum wage job at the mall. Tipping at the mall is not customary so no matter how good or poor of a job she does, she gets the same paycheck. Basically do you job the way your supposed to and the company pays you as they are suppose to, don't do your job and you don't get paid (fired).

 

This is how it's done in Europe. No tipping, decent pay. Do your job or you're fired. They love when Americans come to their country as we don't know this and tip!

 

Harriet

[Tatka]

Well it depends on country and restaurant. In some European countries tips are expected, but smaller tips usually. In some restaurants there is service charge. We usually read our checks to determine this.

[sparks1093]

This is how it's done in Europe. No tipping, decent pay. Do your job or you're fired. They love when Americans come to their country as we don't know this and tip!

 

Harriet

 

I don't know why people think that people who work for tips are not earning a decent living. I know a guy that works for a resort as a bell hop and he's making in the neighborhood of $50k per year. I doubt very seriously that the resort would be willing to pay him that as a salary.

[hpecorari]

I don't know why people think that people who work for tips are not earning a decent living. I know a guy that works for a resort as a bell hop and he's making in the neighborhood of $50k per year. I doubt very seriously that the resort would be willing to pay him that as a salary.

 

Most servers only make $2 something an hour and depend on their tips to survive. Depending on what restaurant they work out it can be tough. Not everyone works at a high end restaurant. Not only that but most servers also have no benefits, health insurance, etc. here in the states. I honestly believe that unless it's a 3 or 4 star restaurant where one's bill for two is rather high, the server is not making much of a tip, and that also would depend on how busy the restaurant is......and if they work the breakfast, lunch, or dinner shift.

 

You'd also be surprised that many folks, usually the elderly folks still are in the believe that 15% tip is what to give.....and that's if they even give that.

 

Just my opinion...........

 

Harriet

[sparks1093]

Most servers only make $2 something an hour and depend on their tips to survive. Depending on what restaurant they work out it can be tough. Not everyone works at a high end restaurant. Not only that but most servers also have no benefits, health insurance, etc. here in the states. I honestly believe that unless it's a 3 or 4 star restaurant where one's bill for two is rather high, the server is not making much of a tip, and that also would depend on how busy the restaurant is......and if they work the breakfast, lunch, or dinner shift.

 

You'd also be surprised that many folks, usually the elderly folks still are in the believe that 15% tip is what to give.....and that's if they even give that.

 

Just my opinion...........

 

Harriet

 

The fellow that I mentioned only makes $2 something an hour paid by the employer, the rest of it comes from the tips that he earns. The last time I ate at a sit down restaurant (national chain) the bill came to $45 which earned our serve a $10 tip. While not every party will be a party of 4 and not everyone will leave a standard 15% it doesn't take a math wiz to figure out that if said server is serving 4 parties an hour with a bill in the $40 range then the server is making around $27 an hour and probably netting around $20 after tipping out, and of course the more upscale the establishment the greater the potential for higher tips.

 

I used to work for tips myself and I certainly do appreciate the hard work that they do, but I am not going to underestimate what they are potentially earning or otherwise think that they aren't earning a decent living just because they happen to be working for tips.

[johnql]

NCL does not, at any time, refer to the DSC as a "tip" or "gratuity". NCL does not use the term "pre-paid gratuities". There is a reason for this.

 

NCL does not, at any time, state that the DSC collected is divided up into shares and handed to crew members. They say that it "supports incentive programs". Again, there is a reason for this.

 

 

From an online article (the emphasis is mine):

Staci on Facebook asks: Love watching your tidbits. Just watched one on tipping. One subject not mentioned -- service fee! Where I work, events are charged a service fee that goes directly to the "house" or business; the staff does not receive any gratuity. How should that be addressed since [patrons] think they have already paid a ‘tip’?

 

This is a really good -- and tricky -- question, so I tapped experts in the fields of catering and event planning, as well as etiquette.

 

To your point, patrons should understand the difference between a tip, a gratuity and a service fee or charge, says Lisa Hopkins, president of the National Association for Catering and Events, “all of which are different.” A tip is completely optional, while a gratuity is automatically added (usually for larger parties), and implies that the entire amount goes to the service staff. “

A service charge is neither a tip nor gratuity. It is automatically added, and is retained by the house and any or all of it used for payroll or commissions, depending on the business model the house decides to use

,” says Hopkins. “There are many ways to use service charges or fees, and they can vary from business to business.” Hopefully, your company offers a fair and competitive wage, so if customers don’t leave you a tip, you’re still compensated well.

This entire topic becomes easier to understand once people know the difference between gratuities and service charges and realize which one they are actually paying.

 

To answer the OP's main question: As it is a service charge, NCL gets to decide which actions result in payments (incentive programs), NCL gets to decide how much is awarded for each achievement, and NCL gets to decide which employees (out of those eligible) get to be paid from the DSC collected.

 

By moving from a gratuity-based model to a service charge-based model, NCL (and others, of course) gets to define "desired service behaviors" instead of having individual guests doing so by awarding behaviors with tips.

 

This helps them ensure a more consistent service model that will be driven primarily by company standards...and is the reason why so many of us LOVE the staff on NCL ships.

 

As a follow up, here is an article on an actual case study for a business that replaced tips with service charges.

 

http://www.slate.com/articles/life/culturebox/2013/08/tipless_restaurants_the_linkery_s_owner_explains_why_abolishing_tipping.single.html

 

 

It is an interesting read.

Thanks for trying. However, most people will continue to believe what they want to believe - that the DSC is the tip. They don't care what NCL says; nor do they care that there is a difference between the two.

[SeaShark]

Thanks for trying. However, most people will continue to believe what they want to believe - that the DSC is the tip. They don't care what NCL says; nor do they care that there is a difference between the two.

 

John...you are correct. Many people do understand, but there are those who don't....for whatever reason. Speaking for myself, I'd rather know where my money goes than choose to believe something because it is easy. Others will believe whatever they are told. These are probably the same people who believe that NCL ruins perfectly good food to "force" people to go to a specialty restaurant. :rolleyes:

[hpecorari]

The fellow that I mentioned only makes $2 something an hour paid by the employer, the rest of it comes from the tips that he earns. The last time I ate at a sit down restaurant (national chain) the bill came to $45 which earned our serve a $10 tip. While not every party will be a party of 4 and not everyone will leave a standard 15% it doesn't take a math wiz to figure out that if said server is serving 4 parties an hour with a bill in the $40 range then the server is making around $27 an hour and probably netting around $20 after tipping out, and of course the more upscale the establishment the greater the potential for higher tips.

 

I used to work for tips myself and I certainly do appreciate the hard work that they do, but I am not going to underestimate what they are potentially earning or otherwise think that they aren't earning a decent living just because they happen to be working for tips.

 

I think we both have our opinions. I know a gal that works the lunch shift. Most meals for a party of two range around $20.00. She's lucky if she gets a $4.00 tip. And it's rare that she'll get 4 tables an hour as the servers rotate tables and it depends on how many servers are on duty that lunch shift.

 

But......we can just agree to disagree as our opinions and experience are different. :)

 

Harriet

[luddite]

e.

 

As with the mall job, doing the job correctly is the minimum requirements that they are already getting paid for. I have taken only one cruise before and there was a guy "Elvis" who did a great job maintaining our room. I couldn't have asked for anything more form him. However, that is what he is already getting paid for and his salary is already included in my ticket price. A tip should be for above and beyond the normal expectations. Now if I had a kid who got sick all over the carpet and walls that needing cleaning up, that warrants a decent tip.

 

 

 

This is not true.

The fare doesn't actually pay the salary of these crew members.

[sparks1093]

I think we both have our opinions. I know a gal that works the lunch shift. Most meals for a party of two range around $20.00. She's lucky if she gets a $4.00 tip. And it's rare that she'll get 4 tables an hour as the servers rotate tables and it depends on how many servers are on duty that lunch shift.

 

But......we can just agree to disagree as our opinions and experience are different. :)

 

Harriet

 

That place must suck if they can't attract more customers than that on a lunch hour:eek:. There are always going to be people in any profession that are at either end of the spectrum and I do recognize that there are some in the service industry that aren't earning what others do for a wide variety of reasons. If our opinions differ it's in that you think those at the bottom represent the entire class whereas I see that they are the exception, not the rule.

[sparks1093]

Thanks for trying. However, most people will continue to believe what they want to believe - that the DSC is the tip. They don't care what NCL says; nor do they care that there is a difference between the two.

 

NCL clouds the difference by allowing passengers to adjust the DSC in the event of an unresolved service issue. If it's a service charge it should not be adjustable.

[johnql]

NCL clouds the difference by allowing passengers to adjust the DSC in the event of an unresolved service issue. If it's a service charge it should not be adjustable.

I do agree that it should not be adjustable.

[Dr_Obbins]

Thanks for trying. However, most people will continue to believe what they want to believe - that the DSC is the tip. They don't care what NCL says; nor do they care that there is a difference between the two.

Originally Posted by SeaShark

NCL does not, at any time, refer to the DSC as a "tip" or "gratuity". NCL does not use the term "pre-paid gratuities". There is a reason for this.

 

NCL does not, at any time, state that the DSC collected is divided up into shares and handed to crew members. They say that it "supports incentive programs". Again, there is a reason for this.

To quote the NCL definition of a service charge from their website:

 

"Service Charges: We are confident that you will enjoy your Freestyle Cruising experience and that our entire crew will provide you with the standard of service for which we are known. A $ 12.00 discretionary service charge will be automatically added per guest per day (for guests three years and older) to your shipboard account for all staterooms. This charge will be shared among those staff members, including the restaurant staff, stateroom stewards and other behind-the-scenes staff who provide services that enhance your overall cruise experience. If you have any concerns about the service you receive during your cruise, please let our Guest Services Desk staff know right away so we can address any issues in a timely manner."

 

And to quote Wikipedia:

 

"A gratuity (also called a tip) is a sum of money customarily tendered to certain service sector workers for a service performed or anticipated. Tipping and the amount are a matter of social custom and social practices vary between countries and settings. In some locations tipping is discouraged and considered insulting and in some locations tipping is expected from customers. The customary tip can be a specific range of monetary amounts or a given percentage of the bill. In some circumstances, such as with U.S. government workers, receiving of tips is illegal.[1] A service charge is sometimes added to bills in restaurants and similar establishments. Tipping may not be expected when a fee is explicitly charged for the service"

 

This is why I think many folks including myself consider the DSC just another name for a gratuity. If it is not a tip and is mandatory, then I feel NCL is misrepresenting their pricing. A $1,000 room is actually $1,084. They have just taken some of their labor cost out of the ticket price and charged you for it in the service charge..

[johnql]

To quote the NCL definition of a service charge from their website:

 

"Service Charges: We are confident that you will enjoy your Freestyle Cruising experience and that our entire crew will provide you with the standard of service for which we are known. A $ 12.00 discretionary service charge will be automatically added per guest per day (for guests three years and older) to your shipboard account for all staterooms. This charge will be shared among those staff members, including the restaurant staff, stateroom stewards and other behind-the-scenes staff who provide services that enhance your overall cruise experience. If you have any concerns about the service you receive during your cruise, please let our Guest Services Desk staff know right away so we can address any issues in a timely manner."

 

And to quote Wikipedia:

 

"A gratuity (also called a tip) is a sum of money customarily tendered to certain service sector workers for a service performed or anticipated. Tipping and the amount are a matter of social custom and social practices vary between countries and settings. In some locations tipping is discouraged and considered insulting and in some locations tipping is expected from customers. The customary tip can be a specific range of monetary amounts or a given percentage of the bill. In some circumstances, such as with U.S. government workers, receiving of tips is illegal.[1] A service charge is sometimes added to bills in restaurants and similar establishments. Tipping may not be expected when a fee is explicitly charged for the service"

 

This is why I think many folks including myself consider the DSC just another name for a gratuity. If it is not a tip and is mandatory, then I feel NCL is misrepresenting their pricing. A $1,000 room is actually $1,084. They have just taken some of their labor cost out of the ticket price and charged you for it in the service charge..

As I said, you will believe what you want to believe. I believe you are misreading the policy. If you are correct, why then does NCL bother to have an entire section devoted to the question, "What About Tipping?" (see below). To me, that means NCL does NOT equate the DSC with tipping. They are two separate items, each addressed in separate sections in the FAQ.

 

What about Tipping?

Guests should not feel obliged to offer a gratuity for good service. However, all of our staff are encouraged to "go the extra mile," and so they are permitted to accept cash gratuities entirely at the discretion of our guests who wish to acknowledge particular staff members for exceptional or outstanding service. In other words, there is genuinely no need to tip but you should feel free to do so if you have a desire to acknowledge particular individuals.

Also, certain staff positions provide service on an individual basis to only some guests. We encourage those guests to acknowledge good service from these staff members with appropriate gratuities. For example, for guests purchasing bar drinks the recommended gratuity is 15 percent. For guests purchasing spa treatments the recommended gratuity is 18 percent. Similarly, for guests using concierge and butler services, we recommend they consider offering a gratuity commensurate with services rendered.

[SeaShark]

To quote the NCL definition of a service charge from their website:

 

"Service Charges: We are confident that you will enjoy your Freestyle Cruising experience and that our entire crew will provide you with the standard of service for which we are known. A $ 12.00 discretionary service charge will be automatically added per guest per day (for guests three years and older) to your shipboard account for all staterooms. This charge will be shared among those staff members, including the restaurant staff, stateroom stewards and other behind-the-scenes staff who provide services that enhance your overall cruise experience. If you have any concerns about the service you receive during your cruise, please let our Guest Services Desk staff know right away so we can address any issues in a timely manner."

 

And to quote Wikipedia:

 

"A gratuity (also called a tip) is a sum of money customarily tendered to certain service sector workers for a service performed or anticipated. Tipping and the amount are a matter of social custom and social practices vary between countries and settings. In some locations tipping is discouraged and considered insulting and in some locations tipping is expected from customers. The customary tip can be a specific range of monetary amounts or a given percentage of the bill. In some circumstances, such as with U.S. government workers, receiving of tips is illegal.[1] A service charge is sometimes added to bills in restaurants and similar establishments. Tipping may not be expected when a fee is explicitly charged for the service"

 

This is why I think many folks including myself consider the DSC just another name for a gratuity. If it is not a tip and is mandatory, then I feel NCL is misrepresenting their pricing. A $1,000 room is actually $1,084. They have just taken some of their labor cost out of the ticket price and charged you for it in the service charge..

 

Are you speaking on the actual definitions, or are you parsing to support an agenda?

 

 

Sure, NCL states: "This charge will be shared among those staff members, including the restaurant staff, stateroom stewards and other behind-the-scenes staff who provide services that enhance your overall cruise experience". The question is really HOW is it shared? Quite simply, it is "shared" in that these employees are all eligible to benefit from the incentive programs that the service charge supports. It is not a pool of money that is simply divided up....if it was, the good workers would be rewarded the same as the poor workers and overall service levels would diminish.

 

Your Wikipedia reference states: "Tipping may not be expected when a fee is explicitly charged for the service". As John points out above, NCL states: "Guests should not feel obliged to offer a gratuity for good service." and: "there is genuinely no need to tip ". Seems like tipping isn't expected!

[Dr_Obbins]

To answer both your points. I am not perusing any agenda. Using the definitions, I am only pointing out that one can easily interpret NCL's DSC definition as pre-paying the gratuity (correct or incorrect) as both my wife and I and many others did and still do. Many of parts of both definitions easily support each other to come to that conclusion. If nothing else, NCL should clarify to who the DSC funds are distributed to and why - and that leads back to the OP's original question.

 

By all means - If anyone in your life works to make life more pleasant and you feel the need to reciprocate, definitely do it, whether with money or other means. Hopefully we are all striving for the same goal during our stay here on earth. :)

 

Now getting back to donations for my kids college..... ;)

[SeaShark]

To answer both your points. I am not perusing any agenda. Using the definitions, I am only pointing out that one can easily interpret NCL's DSC definition as pre-paying the gratuity (correct or incorrect) as both my wife and I and many others did and still do. Many of parts of both definitions easily support each other to come to that conclusion. If nothing else, NCL should clarify to who the DSC funds are distributed to and why - and that leads back to the OP's original question.

 

By all means - If anyone in your life works to make life more pleasant and you feel the need to reciprocate, definitely do it, whether with money or other means. Hopefully we are all striving for the same goal during our stay here on earth. :)

 

Now getting back to donations for my kids college..... ;)

 

That is the problem...you shouldn't have to put together parts of definitions to support a conclusion.

 

Besides, NCL does point out where the DSC goes. It is covered in the FAQ as pointed out in previous posts. Additionally, the topic is addressed in the Guest Ticket Contract:

 

Certain members of Carrier’s crew are compensated by a combination of salary and incentive programs that are funded in part by the service charge paid by each Guest. A portion of the service charge collected by Carrier is also used for fleet-wide crew welfare programs.

 

I don't know how they could make it any more obvious. Especially considering that how the allocate funds they collect is their business...not ours.

[Dr_Obbins]

The tone of some of the posts here was less than favorable of those people who thought the DSC was a gratuity. Service Charge does mean a gratuity in many service industries. I see no reason to continue this conversation - Happy Cruising!

[SeaShark]

The tone of some of the posts here was less than favorable of those people who thought the DSC was a gratuity. Service Charge does mean a gratuity in many service industries. I see no reason to continue this conversation - Happy Cruising!

 

Please accept apologies on behalf of everyone here. :rolleyes: Once you send some more time posting it will become clear that the "tone" of this place is more geared to providing verifiable, factual information than it is in forwarding the erroneous "thoughts" of a vocal minority.

 

You know what they say: "This is a forum - not a support group. We do not "owe" anyone unconditional acceptance of their opinions."

[pliskin]

I have to take issue with spark1093 who has no clue about how restaurants work. Waiters usually get 4 table stations and as you said, its called lunch "hour" not lunch 5 hours. So yes, only getting 4 or 5 tables in a lunch rush is rather common. Next, the server has to tip out support staff like bartenders, bus boys and food runners. Then they have to pay taxes on the tips regardless of what they actually received as hey are based on your sales. So if a table leaves a bad or no tip, it may actually cost the server money to wait on them. And when I waited tables, making $2 an hour, my pay didn't cover my taxes so my pay checks were always zero. OK, off soap box.

[Dr_Obbins]

Please accept apologies on behalf of everyone here. :rolleyes: Once you send some more time posting it will become clear that the "tone" of this place is more geared to providing verifiable, factual information than it is in forwarding the erroneous "thoughts" of a vocal minority.

 

You know what they say: "This is a forum - not a support group. We do not "owe" anyone unconditional acceptance of their opinions."

Its all good. :)

FYI the only other cruise we have been on was a Celebrity and we assumed that the NCL service charge was the same. They have a Prepaid Gratuities option and word it as such:

Pre-Paid Gratuities (Optional)

 

You may elect to prepay gratuities or service charges for all guests in your reservation below.

[sparks1093]

I have to take issue with spark1093 who has no clue about how restaurants work. Waiters usually get 4 table stations and as you said, its called lunch "hour" not lunch 5 hours. So yes, only getting 4 or 5 tables in a lunch rush is rather common. Next, the server has to tip out support staff like bartenders, bus boys and food runners. Then they have to pay taxes on the tips regardless of what they actually received as hey are based on your sales. So if a table leaves a bad or no tip, it may actually cost the server money to wait on them. And when I waited tables, making $2 an hour, my pay didn't cover my taxes so my pay checks were always zero. OK, off soap box.

 

You may take issue with me all you want, but I do know how restaurants work so saying I don't have a clue is not called for. My entire premise was that a lot of people thing that just because someone is working for tips they aren't making a decent living. That may be true for some, but for many it's not the case.

[hpecorari]

Next, the server has to tip out support staff like bartenders, bus boys and food runners.

 

::looking for the "like" button!::

 

Not to mention that some restaurants have the servers tip out the hosts that seat you. In addition, should a customer, and it DOES happen, leave without paying their bill, some servers are responsible for paying that bill.

 

Harriet

who wonders who the bell hop at the Resort has to tip out daily.

[pliskin]

That place must suck if they can't attract more customers than that on a lunch hour

 

Your statement above: your own math says 4 tables per hour and you call it the lunch hour...if you can't see the flaw in your logic, not sure what to tell you.

 

you think those at the bottom represent the entire class whereas I see that they are the exception, not the rule.

 

You have that backwards. In a really good restaurant, you might average $100 a night in tips * 4 shifts a week = 20K per year with no time off and you will likely owe taxes on those tips at the end of the year and have gotten little to no paycheck.

 

At the end of the day, tipping is part of dining out and the whole business model is built around that. It give me as a cusomer the flexibility to reward great service by tipping more or penalize bad service by tipping less. There are some restaurants here in LA that have eliminated tipping but as expected, the cost of the meal is higher to compensate. It will be interesting to see if that model works and catches on or fails.

[njhorseman]

Your statement above: your own math says 4 tables per hour and you call it the lunch hour...if you can't see the flaw in your logic, not sure what to tell you.

 

 

 

You have that backwards. In a really good restaurant, you might average $100 a night in tips * 4 shifts a week = 20K per year with no time off and you will likely owe taxes on those tips at the end of the year and have gotten little to no paycheck.

 

At the end of the day, tipping is part of dining out and the whole business model is built around that. It give me as a cusomer the flexibility to reward great service by tipping more or penalize bad service by tipping less. There are some restaurants here in LA that have eliminated tipping but as expected, the cost of the meal is higher to compensate. It will be interesting to see if that model works and catches on or fails.

 

The flaw in your logic is that you're taking the term "lunch hour" literally to mean a one hour lunch service. In every restaurant I've ever eaten in (and I eat lunch out almost every day) "lunch hour" runs for a minimum of two hours, say noon to 2pm, up to four hours...11 am until 3pm. In addition in many places...for example diners, a table can be turned in as little as a half hour, simply because they're geared to provide quick service to people who have to get back to work. So a waiter/waitress with a 4 table station can serve a lot more than four customers during lunch "hour".