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March 3, 2010
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The government is launching a campaign to encourage customers to ask where their tips go

Tips make great stories. In 2007, A waitress at a Pizza Hut restaurant in Indiana received a $10,000 tip, rumoured to be the largest tip ever. It may well be the largest tip given in a restaurant but, according to this interview on the Big Hospitality site, it pales compared to the £136,000 tipped by the Sultan of Brunei following a three week hotel stay.

While tipping makes brilliant headlines, it is a controversial subject in the restaurant trade. Customers like to think that any money they leave behind goes to the staff but that isn’t always the case. Until recently, some but by no means all restaurants used the money left behind for tips to make up staff pay to the national minimum wage.

Effectively, customers were subsidising the restaurants’ wage bill. It is a practice that most customers would object to but, for the restaurateurs who did it, it was seen as a means of competing in an industry where profit margins can be very low.

Since October of last year, using tips to top up wages to the  national minimum has become illegal. However, this doesn’t mean that all tips have to go to the staff. The actual business or its owner can still take a cut of tips.

The Department of Business Innovation and Skill (BIS) is launching a national campaign today calling on consumers to ask, ‘Who gets the Tip?’ Their research shows that two out of three customers are more likely to return to a business that clearly displays their tipping policy than one that doesn’t. The moral being that if restaurateurs want repeat custom then they should be upfront about where your tip goes.

Among the other factoids thrown up by the survey were the following:

Scots are the most likely to tip all the time (45% compared to 30% overall figure), but are the least likely to see any information displayed about tipping.

The English fall behind the Welsh, Scots and Northern Irish as the least likely to leave a tip.

Scots are the most likely to feel uncomfortable asking the question about tipping policies (54% compared to 39%).

Only one in seven Scots ask what happens to their tip (14%), with over half (54%) not feeling comfortable in doing so.

The majority of Scots are more likely to go back to a business that does provide tipping information (67%); and that allows staff to keep the majority of their tips (72%).

Men are more regular tippers than women (80% compared to 77%) but women are more likely to tip in hairdressers / beauty establishments (50% compared to 26% of men).