Gratuity?

[lentil]

Someone mentioned a gratuity in another thread. I'm having a really hard time with this one. I usually write on the contract "Gratuity is NOT included.", but rarely do we receive one although our events go very well and I usually pick up one new event from each current event. Even the wedding in the rain and wind at the beach got us rave reviews, but no tip. I am perplexed about this.

I add in a service charge which pays my staff at the event, and that is clear on the contract. I altered shroomgirl's contract last year. How can I get people to understand that the service charge and the tip are different? Think I should hide the service charge in the food cost and add on a tip?

[shroomgirl]

service charge and tip do sound like the same thing....I put food, labor, rentals, tax.....gratuity not included, 15-20% is normal. Then I ask if they'd like me to include a gratuity.....as they are paying the final balance....and I make sure to have it bold on the contracts.

[lentil]

Makes sense. What percentage gratuity is fair? 15%? More? Guess I'll be redoing my contract.

[lentil]

Originally Posted by shroomgirl

service charge and tip do sound like the same thing....I put food, labor, rentals, tax.....gratuity not included, 15-20% is normal. Then I ask if they'd like me to include a gratuity.....as they are paying the final balance....and I make sure to have it bold on the contracts.

Sorry- reread this one again with morning eyes. 15%-20% is fair.

So are you saying that the rentals, food, labor- are all rolled into the pp cost without any explanation? I have a section that itemizes the rentals, but maybe hide the 20% mark-up I tack on to the total rental fee? Not so sure I feel good about that.

Thanks again shroom.

[shroomgirl]

NO.
most of the time it's broken down....
Per person cost.
Food
labor per staff per hour, 4 hour minimum
rentals and I tell them flat out what the markup is for rentals.
Tax is 7.414%

Then in bold. This does not include gratuity which is normally 15-20%.
I then ask them closer to time if they would like me arrange the gratuity.
I got burned on the last one....the groom was out of checks at the reception but wanted to tip the 11 staff $30 each. Said he would mail a check when he got back to Ark in a couple of days. it's now two and 1/2 months later and I'm still trying to collect $330. That will teach me......

Weddings I get the balance prior to the reception day. Then bill for any incidentals. I've not gotten jammed on tips before....figured with so many staff that were not regulars to me I'd go on and tip them out that night. WRONG.

Benefits that have a PP inclusive rate for labor/rentals/food the staff usually don't get tips. Bummer but reality, that's why I have a higher labor price.
Even if they do tip it's nominal. This ends up being about 20% of my gigs.

[lentil]

[quote=shroomgirl]NO.
most of the time it's broken down....
Per person cost.
Food
labor per staff per hour, 4 hour minimum
rentals and I tell them flat out what the markup is for rentals.
Tax is 7.414%

Okay. I'm slow here. Say the pp cost is $50. I would then break down the $40 into food, labor, rentals, tax? I've been starting from $40.00 pp for food and adding on rentals etc. How do you differenciate between the labor/hour cost and the gratuity on your bills?

Sorry for my fogginess.

[Rivitman]

Well, we are in deep doo doo.
Our owner charges a 17 percent "service charge".

Our waitstaff sees nary a dime. Yes, the owner pockets it. It is my understanding that unless he represents it as a gratuity to the customer, this is perfectly legal.

Our waitstaff are not permitted to accept tips, though we in the kitchen know it happens from time to time with some.

Needless to say, our front of the hours staffing is now at crisis level.

[shroomgirl]

Okay. I'm slow here. Say the pp cost is $50. I would then break down the $40 into food, labor, rentals, tax? I've been starting from $40.00 pp for food and adding on rentals etc. How do you differenciate between the labor/hour cost and the gratuity on your bills?

Sorry for my fogginess.


Menu
blah, blah, blah
$27.50pp

Labor
1 cook $25, 6 hours $150
3 waitstaff $20pp (4hours minimum) approximately 5 hours $300

$450
*this does not include gratuities, 15-20% is average

Rentals
blah, blah, blah
$1500, 10% included in balance

Tax 9889798%

estimate total$***

[lentil]

Oh, I get it. Thanks so much!

Had a meeting with a MOB and Bride today. Sheesh! I'm going home early to take a nap. Some days, I wonder why I do this at all. But most days, I really love this business.

[lyneotto]

Service not included....
!8 to 20 percent. State it!
Donn't screw your people!
L

[lentil]

Originally Posted by lyneotto

Service not included....
!8 to 20 percent. State it!
Donn't screw your people!
L

Are you talking about a service charge or a gratuity? I charge service, but because of the way my contracts are written, I think it gets misunderstood as gratuity. I don't "screw" either my staff or my customers.

[tigerwoman]

instead of calling it a service charge, call it a "business operations charge"
that would include fuel, insurance, overhead, accounting, etc 9depending on how you break your proposal out. Don't explain this unless you have to.

then say gratuity is at your discretion.

but make sure you charge a high enuf labor rate that the staff is not dependant on tips. I sometimes tip even if the customer does not - say an extra hour or two.

If I am charging $25 for labor to the customer I usually pay around $15-18.

[shroomgirl]

Business operation or service charge is rolled into my fees....not separated out.

I know several caterers that have the fee but it just does not appear kosher to me, so I don't do it.

[lentil]

Tiger and shroom, so I could get rid of my "service charge" of 18% and roll it into my bill. That would leave room for the gratuity. It makes sense if I think of it as a restaurant- when you pay your tab, it's not broken down into various catagories beyond food, liquor, and tax. You don't see dishwasher, cook, busboy, server, but ou are expected to leave a gratuity.

I've been paying my people $10/hr with no taxes taken out since I use them infrequently. This summer is a different story as I've been very busy and use them a few times a week. They understand that since I'm just starting out, all my $$ go right back into the business for little things like Cambros (!). Up until now, they've been women I'm friends with and cater with me for the fun of it. Again, now that I'm using more people from off the street, so to say, I've got my accountant setting up the workmen's comp and tax stuff. I must say, I'm not entirely happy about this, but it means business is good...and I do like that.

Thanks for your help.

[tigerwoman]

I like to roll it into the price too if possible but sometimes in a bid situation some customer only see the price not the add ons (like tax and service charge) so they think you are higher when you bundle it.

If I call it a service charge rarely get gratuities - calling it a business operations charge gets questions (what is it?) but often gets tips/gratuities.

I used to tell people what the bottom line price would be right up front in the first conversation but found that scaredthem off. Somehow starting lower and building up to the final price once you have their confidence seems to work better for getting the jobs.