Are you being served? How to navigate the tricky topic of leaving a tip

May I have the bill, please? Take cash if you intend to tip, or ask your waiter to add extra.
May I have the bill, please? Take cash if you intend to tip, or ask your waiter to add extra. Photo: Edwina Pickles

August 1. It's probably not noted in your diary but the date, which marks the end of credit card signatures and the beginning of the PIN-only era, is a red-letter day for the hospitality industry. Widespread fears it will undermine Australia's already patchy tipping culture have led some restaurateurs and waiters to consider it the industry's answer to Y2K. But like the much-feared millennium bug, will it turn out to be a fizzer, or a devastating problem?

It sounds innocuous enough. The eternal end-of-meal question, "What should we leave?" is simple enough to tackle armed with a pen; the current system involves the card being taken away and returned with a slip to sign, complete with a separate line for the tip. Easy. But from August 1, no pen will be required. Signatures will be made redundant and all cards, credit and debit, will require a personal identification number (PIN) only.

So what? Well, consider this. The PIN-only system will require diners to either line up at the cashier or enter their electronic details at a terminal brought to the table. Diners can still leave a cash tip, of course, but failing hard currency they will have to ask to put an extra amount through the terminal. Essentially it means the customer has to proactively seek a way to tip, rather than being automatically presented with one.

At its most innocuous, the new system will be socially uncomfortable, with waiters hovering nearby while diners punch details into a terminal.

It's already the state of play in the United Kingdom; as Grossi Florentino manager Joe Durrant remarked on Twitter, ''standing awkwardly behind a customer while they enter their pin is a Very British Problem''.

Ahead of D-Day, the industry's mood is far from upbeat. Leading restaurateurs have expressed to Fairfax Media fears staff incomes will take a significant hit.

Illustration: Matt Golding.
Illustration: Matt Golding. 

PayWave, where for any transaction under $100 diners can simply wave their card over the terminal instead of entering a PIN number, has already accounted for a significant drop in tips, particularly at the cafe end of the market. Innovative ideas around payWave even include a chip that can be embedded into clothing to make the process more convenient.

John Kanis, general manager of the growing Chin Chin empire, says they are approaching the change in PIN-only card payments with ''trepidation, to be honest''.

''We don't want a reduction in tips to erode our crew members' livelihoods. We know for a fact that 95 per cent of customers who pay with eftpos don't tip.''


Many restaurants have been preparing for the PIN switchover for some time, with consensus holding that a smooth transition depends on good hardware that allows customers to enter a tip before entering their PIN.

Gareth Burnett, maitre d' at Melbourne's Woodland House (formerly Jacques Reymond), which has already introduced the terminals-at-tables approach, says early signs are positive, without much decline in the level of tipping: ''It took some getting used to but we're getting more efficient with it all the time and now are ensuring our guests are becoming more accustomed to it,'' says Burnett.

Come August 1, restaurant staff may have to start doing what Sydney-based restaurateur and hospitality consultant Erez Gordon refers to as the "unthinkable" in Australian culture: Mention the fact that diners are able to leave a tip if they wish. "To date we have all quietly pretended that dining in restaurants is not a commercial transaction at all, so this may come as a shock to some diners."



It's a step already taken by Woodland House, where waiters point out the line on the machine where the tip can be included; beware - it's a line where some customers have mistakenly put their PIN.

Adam Cash, from Melbourne's Union Dining and Wine, says communication will be the key. "It will be about handling the transaction with some discretion and sensitivity. It is always an awkward moment to ask, 'Do you want to leave a tip for the waiter?'."

To tip or not to tip?

It's impossible to have the debate without taking in the broader, and rather uncomfortable questions around tipping in Australia. Namely, do we tip, should we tip, and how much?

The short answer is not really, sometimes, and not enough.

Unlike the United States where the quasi-mandatory tipping system (15 to 18 per cent is the norm) accounts for most of the staff's income, Australian waiters don't have to bank on the public's generosity to pay their rent. Thanks to the minimum wage cushion, tipping here is seen as a token of gratitude for service that goes above the average.

So how much is at stake? On average, a full-time waiter in a Melbourne or Sydney restaurant can take home anywhere from $100 to $500 in weekly tips. Staff at top-end restaurants can expect to supplement their income to the tune of $600 to $700.

During a hospitality career of 20 years, manager of Prahran hot-spot Charlie Dumpling, Jamie Munro-Lynch, has observed tips fluctuate in accordance with the economic climate: "The economy tends to dictate people's frequency of dining out and the percentage of tips tends to trend on economic cycles too."

Cash, a 17-year veteran, has seen "a slight reduction in the level of tipping across the industry'', while Emily Pullen, manager of Melbourne's Smith Street diner Northern Light has seen varied growth in the Australian tipping culture during her 18 years in the industry. "It's part of the dining experience for the discerning diner,'' she says. ''However, as the economy has slowed, the tips have definitely become less."

So how much to tip? The unofficial rule is 10 per cent on top of the total amount. Says Pullen: "Ten per cent is great now, it was less five years ago."

Gordon says the realistic amount is less: "It is rare for a diner to tip more than 10 per cent so, when balanced with diners who don't tip at all, the average return is in the 5 to 7 per cent range."

Whether the level can be maintained post-August 1 is largely a question of how assertive restaurants are willing to be.

Education is the answer, says Gordon. "Frankly, if we can train the public to pick up their dog's poo, we can train them to leave a digital tip instead of a handwritten one. The more difficult job is to educate the public about the reasons behind and the value of leaving a tip."

On the receiving end

Good restaurants can attract and retain great staff with the lure of a fat tip packet. But is that about to change? Will PIN-only payments affect the restaurant industry? Nola James reports.


Emily Gasseng
15 years in the industry

''There's a genuine fear that tips are going to drop,'' Gasseng says, noting that only one in 20 customers who pay with eftpos will leave a tip. ''As a full-time student, tips can mean the difference between making the rent or not.''

Matti Fallon
14 years in the industry

''It's going to give tight-arses another excuse not to tip,'' says Fallon, predicting potential increases in wage costs in lieu of tips. ''Restaurants will be paying more to retain staff.''


Jess Ho
12 years in the industry

''Waiters can look forward to emptier pockets,'' says Ho as she puts a kibosh on the idea that a rise in wages could make up for absent tips. ''If restaurant staff were actually paid according to how hard they work, restaurants just wouldn't make any money,'' she says.

David Bruce
Five years in the industry

The PIN-only system has already created a few awkward service moments for Bruce, who bypasses the tip screen to avoid asking a customer to leave a tip. ''It's good for security reasons,'' he says, ''but tips are going to be down unless people bring cash or are prepared to openly offer to tip on their card.''

Sean Dooley
23 years in the industry

''If you're in the industry for the tips, you're in it for the wrong reasons,'' says Dooley, although he believes that tipping creates an incentive for above-average service. ''If we want to keep that level of service up there needs to be some incentive,'' he says, ''but restaurants won't get that from paying minimum wage.''


Sarah Haywood
Dines out 10-15 times a month

Sarah feels she would be put off if a waiter asked if she would like to leave a tip. ''I like to have the option [to tip] in a subtle way, which is why the signature system works so well.''

Sophie Hart
Dines out 3-4 times a month

As a student working part-time, Sophie isn't a big tipper, although when she pays cash she'll leave the change.

''I probably wouldn't think about tipping if I was using a PIN,'' she says.

Daniel Chan
Dines out 6-8 times a month

Chan says that while he doesn't usually tip in cafes he will tip for higher-end dining.

''Even when using eftpos I will put money in the jar. I normally tip 10 per cent, extra for really good service, but if the service is poor I am not going to tip at all.''

Andrea Makris
Dines out 10-12 times a month

Makris says the new PIN system will make it easier to pay but it won't change her attitude to tipping.

''I don't believe in tipping,'' Makris says. ''I think restaurant staff should be paid what they're worth by their employers.''

Rohan Dredge
Dines out 2-3 times a month

''I'm a big believer in the recognition of good service,'' Rohan says, often leaving over 10 per cent of the bill.

However, with payWave and PIN payments ''people will tip less. Not because they don't care, but because the option [of a credit card form] is gone.''