Service Charges and Tipping
One of the most difficult questions we get asked by clients is about tipping. Should they give a tip? And, if so, how much?
Now, back in Britain, when I was growing up we never had a system of service charges imposed on the bill. In a restaurant, the price on the menu was what you paid. If you felt that you had received good service then you left a tip. Often, people would just round up the bill and not expect any change. Then a few places started to include a service charge – a practice adopted from the States or Europe – I am not sure which. Usually the service charge was 10%, but I have known a few places where it was 15% or even 20%.
Here, during the Soviet period, it was, apparently, not usual to ‘tip’ people like waiters and waitresses. The official attitude was that tipping was a “capitalist” practice and it was frowned upon … the salary was thought of as the reward for doing the job and tips were not necessary. Some people even took the suggestion as not only unnecessary – but even as an insult. Since the collapse of the Soviet Union, attitudes have changed and nearly everyone likes to receive a gratuity.
We, for example, don’t include a “service charge” at either the Silk Road Lodge or our Guesthouse in Naryn. In our opinion, whether or not to give someone a “tip” or “gratuity” is a personal decision taken on the basis of wanting to reward someone for particular or exceptional service.
We actually ask clients NOT to put a tip onto the bill when charging to their room or paying by credit card, a common practice in the West. We prefer people to give the “tip” to the person concerned because:
- it personalizes the gratuity (identifies both the “giver” and the “receiver”;
- identifies it with particular or exceptional service, thereby rewarding and encouraging further good service, (I remember a story about a diner who felt particularly unhappy about the service he had received at one restaurant and so he paid the bill and left without leaving a tip. He hadn’t got far down the street when the waitress came running after him and said: “You forgot the tip,” to which he replied, “No I didn’t. I didn’t leave because I didn’t think the service warranted it,” then turned around and walked away leaving the flabbergasted waitress standing, no doubt cursing him under her breath, but hopefully contemplating what needed to be done to improve the level of service so that it did warrant a tip.); and, just as important,
- it means that the person concerned receives the full value of the gratuity (If it is paid to us (e.g. by being charged to the room) then it is counted as our income and tax has to be deducted … VAT, retail tax, profits tax, income tax, social security contributions and others … so that less is available to be distributed).
Unlike the situation in America – where there are guidelines on how much to give when “tipping”, issued by organizations such as the American Society of Travel Agents, there are no “Tips on Tipping” for the Kyrgyz Republic. Almost any sum will be appreciated – but please remember that the salary levels in the country are generally low, much lower than they are in the West. For example, a teacher or a doctor may receive as little as 1000 som a month, (i.e. about USD25). Indeed, a tour guide may well be a teacher working in their summer holidays … in order to supplement their income.
It is not necessary to tip Taxi drivers, although many people round up the fare such as 80 som and hand over a 100 som note.
Many hotels and restaurants, however, will add a Service Charge to the bill. This can range from 5% to 20% – always check the menu! If there is a service charge – then there is no need to leave an additional tip.
Now, there are many definitions for the term “service charge” and a number of heated opinions about when and where such charges are justifiable. A standard definition of a service charge is: “a fee for some service rendered that is in addition to fees already paid for that service”.
One type of service charge, in particular, that has many people confused is when a restaurant adds a set percentage of the bill as a service fee. This is because, in the West, this is usually in lieu of a tip. A fee, of course, is not a tip and belongs to the restaurant owner and not to the waiter or waitress. This means the owner can distribute the fee in any manner he sees fit, or can keep all of it. The Inland Revenue in both the US and Britain have investigated a number of catering establishments on just this issue and some have faced hefty supplementary tax bills as a result.
Here, the price on the menu is for the goods that you are buying – the food that you eat, and the overheads such as the cost crockery and cutlery, the energy used to cook the meal, the surroundings, (decoration, etc.). It does not include an element for the waiter/waitress service. Hence, the service charge in a café or restaurant is not in lieu of a tip. It actually constitutes the fund from which the wages of the staff are paid. There may be a formula for dividing it between the different members of staff – so much for the waiters, so much for the cooks and dishwasher, so much for the barman, and so on. Perhaps more controversial, in my humble opinion, is the practice that several establishments operate whereby if there are no clients then the staff don’t get paid – even if they have been at their place of work for the whole shift. The logic is simple: No clients, means no service charge, means no salary fund, means no salary.
Bishkek