The debate was sparked when a pro-cash campaigner spotted a sign at the Glendola Leisure’s Well & Boot pub in Waterloo, announcing that a 4%, optional, service charge would be automatically added to drinks orders at the bar.
Cue outraged headlines about “rip off practices” and “tipping culture out of control” in the national press.
But it has opened the debate for pub operators - should you be applying a service charge across the board? Traditionally, some operators have added optional service charges for food or table service, but standing at the bar and ordering a drink has always been left to the discretion of the individual punter.
Glendola has defended the move and said: “We have a discretionary service charge in line with common practice across the sector. Importantly, 100% of this goes to our staff through a fair and tax-efficient Tronc system, ensuring they benefit directly. With the pressures facing hospitality, only compounded by the recent National Insurance increases, this approach helps us support our teams in the most sustainable way.”
“A bit cheeky”
However, they did not comment further around the decision to add it to the bar, with some operators pointing to the low 4% as “odd” when most service charges are around 12.5%. “It’s almost like they know they’re being a bit cheeky”, said one pub owner.
“I think it’s idiotic adding service charge to the bar,” said another. “It’s generally bad for business.”
So in UK culture, where tipping is broadly discretionary, and the myth that punters will pay extra for good service rolled out as a deflector to mandatory service charges, do we risk alienating customers if we ignore that?
People are starting to become attuned to paying, or being asked to consider paying, a service charge for things like table service - although it can prove to be a friction point.
The tradition of queueing up at the bar is a different matter - the “one for yourself” line used to be enough, but in these days of rampant inflation and soaring tax is the service charge the only answer for desperate employers that struggle to pay above minimum wage?
And does adding a service charge also serve to reinforce the idea that working in hospitality is a minimum wage profession made bearable by tips?
Going down well
Phil Sutton, who runs the Doghouse in Perry Hill, South London, said: “A service charge is a more palatable way of paying staff more where customers can directly see that that is where it is going.
“If we stuck an extra quid on pints or our chips and said we pay staff better then it wouldn’t go down as well.”
When asked why he charged a service charge, Lock In podcast co-host and pub operator Heath Ball said: “Because no-one will put up with serving customers for just minimum wage! I’ve got a KP who earns £22 per hour thanks to service charge, he works like a dog and he’s stayed with me for nine years now.
“To be honest, the whole system is broken. The problem is we’re so heavily taxed, if we weren’t, you imagine going, ok, pay the people £20 an hour, but give us a break on the taxes, but they don’t. I don’t think it’s the right system, but I don’t think it’s the wrong system either.”
The issue is certainly one that divides the sector. In an online discussion, Marc Birch, a food and drink consultant from Herefordshire said: “It’s another deterrent! We need to encourage customers, not deter them. I know pubs who add service charges who have lost business to pubs who do not.”
Jez Nash, who runs the Strait and Narrow in Lincoln, said: “I don’t like it as a customer or an operator. I like to tip for good service and I like to know who it’s going to. As a wet-led bar in the middle of the UK I think we’d severely compromise the customer experience by adding one onto the bill.”
While some defended tipping in general, they did not subscribe to the idea of adding it to bar service. Shaun Tippings, md at Tippings Pubs, said: “It’s no problem as long as you’re clearly upfront, ie on menu/website, and you actually get what you pay for, which is service.
“However, adding this onto ordering drinks at the bar yourself or ordering at the bar is taking the mick. We personally don’t add service charge, instead give customers the option to tip if they like at the end of the meal.”
Changing times
But maybe times are changing, says Ben Thomas, CEO of TipJAR. “Our research says that tipping culture is shifting. Younger generations tend to tip more—often because not long ago they were the ones serving the drinks or clearing the tables.
“For them, tipping feels like paying it forward, rather than the view of previous generations who could see tipping as condescending or high-handed.
“When run properly, service charges mean staff can get a little extra without national insurance costs for the team or their employer. Service charges also can remove some of the awkwardness around tipping — providing a clear, fair way to show appreciation, and benefitting both the business and team when it’s done right.”