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Mandatory? Gratuity

3076 Views 15 Replies 8 Participants Last post by  w.debord
Hi there,

My company policy has always been "Gratuity is based on your descretion", where as a lot of my fellow caterers have a mandatory 18% in the contract.

My people work VERY hard, as I am sure most others do as well, my recent caters have found me with a great deal of "Budget " minded clients.
Just recently I did a Wedding $14.00 per person, Pasta's Hor'd, beverages, cake cutting, the clients including the parents on both sides hugged me and said I exceeded their expectations, however no tip, how do I gracefully tackle the gratuity issue?

I bill 1/2 thirty days before the event with the balance due the week of the event (I don't like tracking down clients during the event for payment) I was thinking since they are pre-paying the tip issue may be slipping their mind?

Thanks for any input.
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The way I understand it is the 18% is not really gratutity even though that's how it's billed. That charge is the money used by the cater to pay staff, not to tip staff. Unless someone tells me otherwise, I've never seen it passed on to the staff as a tip over their rates.

There's a piece of your profit right there. Leave it on the table or take it like everyone else. Or change the industry.
I honestly think most pricing issues have to be evaluated with what's happening over all in your market. If everyone is charging it, then you should too. No you don't want to be dis-honest and have hide these fees. I think if your up-front and tell them and additionally you explain (educate) them that everyone caterer does too then at least your helping them compare the real costs. Then of course once they get past the money, your sale is your the best quality in that price range, right.

As far as help, do the same thing. Find out what other caterers are really paying them for exactly what work (hours, set-up and break-down work some do and some don't require it.).There's temp. waitress services in my area, maybe there are in yours. Our help always complained about money and how hard the work was but when we checked... we were paying top dollar. Some people who don't work for other caterers might be mislead that theres more money on the other side of the fence....also some people don't realize this is harder then waiting tables in a restaurant...too bad.

Weddings are hard on the buyers too, their new to all of it and every where they turn there's a fee for the smallest dumbest things. Who would believe someone would charge you to cut the cake? Or that the party consultant doesn't stay for the whole party?....

I say just do your best to help simplify even if it means changing how you price so that at least the clients can really do a side by side comparision.
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As to if "it's standard" I think it depends upon: where you are located (big town/little town), and the size of the catering company. If she' talking to small caterers maybe even working from their homes...well they don't have service charges and alot of other things that established caterers do.

You have to KNOW your market. You can't sell your product with-out knowing what your competitors are doing. Sounds like you need to make some phone calls. You'll never have to backtrack if you really know your business, know your competition.

I think you were premature in asking for this for a couple reasons. First, as the owner of a company you won't be tipped so that was a mistake. Next it's a buffer to cover your labor and as an owner you have no labor.

Bigger companies have all kinds of policies. I was just talking to a freind that owns a big caterering biz this morning and he has a $15,000. min order for parties on Sat. and then a $6,000. on Fridays and Sundays. On weekdays he'll take any size. He can set limits because he has the reputation and gets it. Anything else he'll drop off the food and send some rent a staff people. Not too many caterers can command those min.

But when your small you take anything that keeps your doors open. Yep, that's a learning experince....1 down, tons more to have to start somewhere somehow. Good Luck
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No that not amuteurish at all, and I'm sure someone will jump in with a different opinion then mine. It's all food for thought. It helps to have a place to come and bounce some questions around.

Standard is that owners of any business are not tipped....ocasionally people do but usually they aren't.

No one said you hand over the service charge straight to your employees. Only tips go straight to them (some places don't do that). I think each business has it's own reasons or ways they explain the service fee. To me gratuity means tip, service charge means a fee for providing a service. The service being: providing waitstaff and your costs and work involved in procuring and maintaining them (taxes, bookkeeping, organizing, etc...), or they could hire them themselves (good luck to that).

Don't pay your help much more then the going rate. If you start at sky high wages you'll just need to pay them more and more. Treat them well, praise....not enourmous will one day get you.
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