Gratuity and service charges

[Lynniepoo]

Some of the posts I have read on this subject in the past swear they remove the auto tip but tip the people they encounter (that give good service) a high dollar tip, and much more than the auto-tip would have been. While you may not agree with that strategy, they are not "stiffing" people.

 

Personally, DH and I leave the auto-tip in place. We also always give the room steward extra, because even the average ones work so darn hard, and will give extra to our waiter and wait staff if we enjoyed their service.

[Lynniepoo]

Yes, but doesn't expect them. My point is pay staff a guaranteed wage that they can live on, not depending on tips.

 

If you pay a guaranteed wage, you remove the motivation to work hard for a tip. You also pave the way for the automation of those jobs by a computer that doesn't need to paid, and the job gets eliminated.

 

If you keep the low wage in place, then even great workers will get less than what they deserve by people who see an opportunity to pay less than they should.

 

IMO, there is no easy solution.

[Colo Cruiser]

Some of the posts I have read on this subject in the past swear they remove the auto tip but tip the people they encounter (that give good service) a high dollar tip, and much more than the auto-tip would have been. While you may not agree with that strategy, they are not "stiffing" people.

 

 

One of which is very boisterous on this very thread, and trust me they don't hunt down staff to compensate them. :rolleyes:

Please tell me how those who remove the auto-tip will walk in the kitchen and "take care" of the cooks/dishwashers/chefs etc? Oh and the housekeeping staff behind the scenes that the passengers never see or interact with? Blaming it on a "society". :confused: Yes its stiffing people.

[Lynniepoo]

One of which is very boisterous on this very thread, and trust me they don't hunt down staff to compensate them. :rolleyes:

Please tell me how those who remove the auto-tip will walk in the kitchen and "take care" of the cooks/dishwashers/chefs etc? Oh and the housekeeping staff behind the scenes that the passengers never see or interact with? Blaming it on a "society". :confused: Yes its stiffing people.

 

I think the point they make (but I don't really know for sure) is that they compensate (richly, according to them) the people they have direct contact with. I don't know if they really do either, I can only take what others say at face value.

 

I understand the other side too, though, because I agree that people should be compensated for how hard they work. I just think taking the broad stroke of calling all non-auto tippers cheap stiffs might be a little too general.

[Ombud]

Keith, valid point. I can't huntdown those in laundry & although I prefer the same server for my long black with cream not half & half, sometimes I get someone else.

 

Ship staff work 9 long hours to be able to take 3-6-9 months off at home. It's not glamorous but they enhance our trips. tip accordingly!

[c-boy]

You keep posting this.

 

Somehow princess is about to collect a mandatory service charge for drinks,

and use it to pay bar staff.

 

Yet somehow princess can't collect a mandatory hotel charge and use it to

pay dining and housekeeping?

 

That makes no sense.

 

Further, there are many, many promotions where the hotel charge is included. Somehow

princess is able to juggle that.

 

The only reason the hotel charge isn't mandatory is because it would make the upfront selling

price look bad.

 

If princess wanted to do the accounting, they could.

okay now I'm following your thinking.....

[RDC1]

You keep posting this.

 

Somehow princess is about to collect a mandatory service charge for drinks,

and use it to pay bar staff.

 

Yet somehow princess can't collect a mandatory hotel charge and use it to

pay dining and housekeeping?

 

That makes no sense.

 

Further, there are many, many promotions where the hotel charge is included. Somehow

princess is able to juggle that.

 

The only reason the hotel charge isn't mandatory is because it would make the upfront selling

price look bad.

 

If princess wanted to do the accounting, they could.

Several reasons. Competition is certainly one of them. US finance law is another. If all of their competition were to change how gratuities are handled they probably would as well. Until then the financial reporting treatment requires that they be removable. As does some consumer protection laws. Not so for service charges.

 

 

When they include tips as a package the tip amount is an expense when they transfer the funds to the tip pool, just as with any other marketing program.

[antsp]

One of which is very boisterous on this very thread, and trust me they don't hunt down staff to compensate them. :rolleyes:

Please tell me how those who remove the auto-tip will walk in the kitchen and "take care" of the cooks/dishwashers/chefs etc? Oh and the housekeeping staff behind the scenes that the passengers never see or interact with? Blaming it on a "society". :confused: Yes its stiffing people.

 

 

I have never removed the auto tip in my life, and you also won’t read a thread where I’ve said I have. I live in the USA and UK and adapt to either countries customs as necessary. What annoys me is the blinked attitude from some who think it’s the American way or no other way.

[pablo222]

Several reasons. Competition is certainly one of them. US finance law is another. If all of their competition were to change how gratuities are handled they probably would as well. Until then the financial reporting treatment requires that they be removable. As does some consumer protection laws. Not so for service charges.

 

Princess calls the 'service charge' added to a bar purchase a gratuity. And yet, it is not removable.

 

See the 'Gratuities' section of this page:

 

https://www.princess.com/learn/faq_answer/onboard/experience.jsp

 

"A 15% gratuity is added to bar charges, dining room wine accounts, and Lotus Spa® services. This is shared amongst the beverage staff, their support staff and Lotus Spa® personnel."

 

It's pretty hard to follow your argument that a hotel charge gratuity is a gratuity, and a bar charge gratuity is not.

 

Carnival had created a Panamanian corporation to run the casinos on the world's leading cruise lines.

Who knows why? Probably not for the customer's benefit...

 

 

If for some reason Carnival / Princess wished to make the hotel charge mandatory, I'm sure they

have enough clever lawyers and accountants to create a Panamanian corporation (or some other method)

to collect and distribute the charges without any US tax consequences.

[oskidunker]

Disagree. If service is bad, you need to have the abilitybtonremove tips. Otherwise there is no incentive to provide good service. Inhave been on 25 princess cruises and only reduced the tips once when we hadvreally terrible, uncaring service. I complained to the head waiter to no avail and gave them a chance to get better but they did not.

[RDC1]

Princess calls the 'service charge' added to a bar purchase a gratuity. And yet, it is not removable.

 

See the 'Gratuities' section of this page:

 

https://www.princess.com/learn/faq_answer/onboard/experience.jsp

 

"A 15% gratuity is added to bar charges, dining room wine accounts, and Lotus Spa® services. This is shared amongst the beverage staff, their support staff and Lotus Spa® personnel."

 

It's pretty hard to follow your argument that a hotel charge gratuity is a gratuity, and a bar charge gratuity is not.

 

Carnival had created a Panamanian corporation to run the casinos on the world's leading cruise lines.

Who knows why? Probably not for the customer's benefit...

 

 

If for some reason Carnival / Princess wished to make the hotel charge mandatory, I'm sure they

have enough clever lawyers and accountants to create a Panamanian corporation (or some other method)

to collect and distribute the charges without any US tax consequences.

 

Using the definition in US financial codes. The bar amount is a service charge, and does not meet the definition of gratuity (tip). First and foremost it is not optional. That means that any money received must be considered to be income by the cruise line or the appropriate contractor, and money paid out to servers must be considered to be salary (not tips). Tips must meet a couple of standards. First is that they must be able to be set by the person paying (as in they can be removed or the amount changed. Princess meets that requirement). The second is that all money received must be distributed to the members of the pool. If they meet those requirements the money received is NOT considered to be revenue to the company, and payments to employees are NOT considered to be an expense to the company. From the employee side any such funds are NOT considered to be salary. Basically it flows outside of the companies books being neither revenue or expense.

 

The issue is NOT US tax consequences, the issue is US financial reporting, which the cruise lines must follow because their stock is primarily listed on US stock exchange. As a result their accounting must meet US financial reporting standards and regulations. Part of which is accounting treatment of tips vs service changes.

 

Basically no difference to the company as far as tax, is a difference to the employees that receive money from the tip pool, based upon their country of residence (which can impact income tax and national retirement system contributions). In many countries tips get different income tax and retirement tax treatment than salary.

 

If the hotel did not qualify then all the money received would be revenue and payouts would be expense which would raise both by the same amount. Tax neutral to the company, though it would be negative to net margin. All payments would have to be considered to be expense and reported as salaries by employees subject to the tax law in each of their country of residence.

Edited September 16, 2018 by RDC1

[Luvmyrotti]

Why are you all letting this thread get you all jacked up? You do realize this was a one-time poster who has not come back to comment. Clearly this post has done what it intended, which was to create a bunch of nasty name-calling.

[c-boy]

emotion .... it gets the best of us.