The Culture of Tips and Service Charges

March 05, 2010

Tips and service charges were always a surprise to me. Initially, in my childhood, there were not too many places to eat out, and many of them were the neighborhood place where you took food from an open serving place, paid at the time when the food was given to you, and either took the food home, or ate in the open, sitting on some sort of plastic chairs. Voila ! No tips or service charges. And then slowly, as one grew up, more restaurants started showing up and we also started going out more. And, a few years ago, came across this concept of something labelled as service charge (I recall the first time that I had gone to a restaurant where there was a small (*) at the bottom of the menu that stated - 10% service charge extra). I ignored that, but guess what, this was my party, and then I got the bill. There was a charge at the bottom called Service Charge - and 10% of the total, wow ! First reaction, why should I pay !! And then the people whom I was with, looked at me, and were like - is this the first time you have been out? This is normal? So I swallowed my pride, my questions, and paid the full amount.

Then, it started becoming more normal, with more and more restaurants charging service charge (and some of them actually putting a notice on the wall stating 10% service charge extra - very tacky). However, I did put in a policy to the effect that no tips if there is a service charge. Not that I was a heavy tipper, since if the bill came to something like Rs. 2000, I would certainly not pay out Rs. 200 or more as a tip, more like Rs. 80-100. In this one, I had full agreement of friends and family (with some dissenters claiming that I paid too much. I also learned that the waiters and others at such places really did not earn too much, and tips were a good way for them to supplement this income. But if I took a taxi or an auto, there was no concept of paying a tip.

Then I learnt that India has a long way to go. In the US, it soon became apparent that tips were not optional, it was supposed to be 10-15% of the bill. Even when I was returning to India, I had booked a luxury limo (company paying for the limo taxi); with friends over there reminding me to tip the driver. Tip the driver for a taxi? Wow! Anyhow, since it was a long distance with an expected rate of around $80-100, the going rate for tipping was around $10. Imagine paying a tip of Rs. 460 for a taxi.

Then a recent tourist trip to Egypt really showed me how much India is backward in this respect. There, as part of the actual rates provided by the local tour operator, there was a paragraph related to tips; with the expected tipping rate of $6 per person per day, increased to $8 per person per day if this was a Nile cruise. I was flabbergasted, since this was a family trip of 8 people, and those dollars were quickly adding up. And when we met the Egypt travel agent, he quickly reminded us of the same, and told us the total expected tips, since the same tips need to be provided to the taxi driver, the waiter, the cook, the doorman, the person who cleaned the rooms, and everybody else. If I paid the travel agent, they would take care of all this; and this was almost non-negotiable. Apparently, the income levels are so level that tips make up a sizable portion of the salary. If you are traveling somewhere, and need to use the rest room, there will be a person outside the rest room asking for a tip of 1 pound to use the rest room, and he is none too polite if you refuse. If you are in a hotel, and look at the rate, there will be a note at the bottom of the menu that for everything, taxes and service charges will be applied extra, and tips are on top of that.

Hi, I write about the entertainment market in India, concentrating on the Hindi language programmes on TV, and on the Indian movie market, Bollywood. I am also interested in information on how to improve Health (). I also list out Hindi Movie Songs along with lyrics.
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