From a few euros for a good meal to several tens of euros for a dinner in a starred restaurant... The use of tips is a well-established tradition in France. However, restaurant professionals have noted a decline in tips in recent years. The reason? Inflation and the almost systematic use of credit cards.
However, some digital solutions seem to represent a great opportunity to encourage customers to express their generosity via credit card payments, while facilitating the work of restaurant owners. So, what do we need to know about the use of tips? What are the rules? And how can you get your customers to like tipping again?
Our answers right below. 👇
What is a tip?
Definition
A tip is a sum of money given by the customer to an employee in the form of a cash or credit card payment. The tip is used to show a customer's satisfaction with a good service.
Even if it remains traditional in certain professional sectors (waiter, usher at the theater, gas station attendant, etc.), it is always optional and left to the goodwill of the client.
But by the way, why do we say tip?
Tipping is a tradition that dates back to the 16th century. Composed of for and drink, customers would leave money as a reward for service and offer a coin: "To drink to my health." This gratification allowed the person who received it to buy a drink. Thus, waiters, cafetiers, doormen and bistrotiers were offered several rounds by satisfied customers!
It was not until the mid-twentieth century that this practice became commonplace in restaurants, cafes and theaters.
How important are tips in the restaurant business?
It is well known that the restaurant business is physically very demanding, with long hours and breaks during the day. As wages are generally not very high, tips are a real leitmotiv for the teams as they can considerably increase the income of the restaurant employees. Thus, tipping is a great motivator that pushes employees to perform even better.
Is tipping mandatory?
In France
No, tipping is not mandatory. In France, no profession can demand it from its customers. The tip is not a salary in the restaurant business. It is left to the goodwill of the customer, as a thank you for a job well done.
Abroad
Generally speaking, when traveling abroad, it is good practice to leave a few coins with the waiters. In some countries, it is even mandatory to leave 15% to 20% of the bill, while in other countries, such as Japan, tipping is considered an insulting practice.
In the United States, tips are not a supplement to salary but are the main income of waiters and bartenders. It is mandatory to leave "tips" when paying the bill. This practice of mandatory tipping also exists in Canada, England, Scotland, Australia and Mexico.
In some European countries, the tip is already included in the bill. This is the case in Norway, the Netherlands and Ireland. In this case, do not add anything! In Germany, no change is ever left on the table. Customers tell the waiter directly how much they want to leave as a tip when paying the bill.
How much can I expect as a server?
It is commonly said that the customer should leave 5% to 10% of the final bill to the waiter if he is satisfied with the quality of the service.
Who manages tips in a restaurant?
The head of the establishment is responsible for estimating the amount of tips received by his or her staff and recording them in the accounting records.
How to share tips?
Here are 4 ways to share tips within a restaurant team.
- Everyone keeps what they have earned:
This method is certainly the simplest to implement, but perhaps also the most questionable: each staff member keeps the tips he or she earns and the tips are not shared. Too bad for the cooks who are not in contact with the customers...!
- Prorated Tip Sharing:
This is a very common method of collecting tips from everyone and then distributing them equally among all employees at the end of the shift.
- Team Tip Sharing:
This method can be applied in large restaurants. It involves sharing tips according to the room (waiters in room 1 share the tips of room 1, etc.).
- Hybrid tip sharing:
A rarer but proven method of sharing. The waiter keeps a part of his tip and shares the other part with the rest of the team. For example, Ahmed gets 20€ tip, he keeps 50% and shares the rest in the common pot. Anna earns 12€ in tips. She keeps 6€ and puts 6€ in the common pot. So, at the end of the service, the total of the common pot (= 16€) is made and divided in two. On this day, Ahmed will have earned 18€ in tips and Anna 14€.
What does the law say about tips?
French law is relatively flexible with the use of tips.
An administrative tolerance
In the restaurant business, tips are tax-tolerant. Voluntary tips left by customers are not subject to VAT, unlike service charges which are included in the bill. Tips left in cash are, in fact, spontaneously excluded from any charges.
In practical terms, this means that cash tips are not subject to any legal framework. It is accepted that they do not appear in the restaurant's accounts because of their opacity.
The 2022 Finance Act
Since the 2022 finance law, tips left by customers are now excluded from social security contributions and income tax. This measure, which has been in place since January 1, 2022, mainly concerns tips paid by credit card when paying the bill.
Before this date, restaurant owners had to declare and tax tips paid by credit card. Included in the restaurant's turnover, they are then paid by the employer to the employees, after deduction of social charges. The aim of this measure is to allow restaurant owners to accept tips by credit card.
Scheduled to apply until December 31, 2023, this measure is intended to enhance the attractiveness of the food service industry and remedy the many difficulties encountered by employers since the Covid-19 epidemic.
👉 Going further: 9 tips for finding restaurant staff
How to increase tips through digital?
Apps represent a real lever to encourage customers to tip, while making the job of restaurant professionals easier!
According to a recent CSA study, the French seem to be largely in favor of the development of mobile applications that allow them to leave a tip in a dematerialized way.
From the customers' perspective, it allows them to give the amount they want, without being constrained by the coins or bills they have (or don't have) in their wallet. According to respondents, digital tools also make it easier to tip more often.
Many solutions, such as ordering at the table via QR code, or online ordering, now make it easy to leave a tip at the time of payment, by choosing :
- a percentage of the bill,
- an amount to be pre-selected,
- or an amount of your choice.
When paying the bill, customers choose the amount of the tip they wish to give to the restaurant staff. A great way to give back the taste of tips, in a simple and fun way!
👉 To go further: why adopt the QR code in your restaurant?
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Are you a restaurant owner who wants to optimize the management of your establishment? Contact an Innovorder expert and get personalized advice.
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