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Should Your Firm Allow Tipping?

By Michael Morrow

The practice of tipping began in the taverns of 17th century England. At that time it was common practice for adult beverage drinkers to hide money under their empty glasses so that bartenders and waiters would provide them with preferential services, and later extra shots of alcohol. The word “tip” is an acronym for the term, “to insure promptitude.”

Although the practice was prevalent in England it was not a widely accepted practice in the Americas due to negative connotations. Many in the Americas believed tipping was morally wrong and created a caste system in society.

However, during the 1800s, wealthy Americans embraced the tipping custom. Tipping became widespread and was adopted as an acceptable way of showing someone gratitude for providing excellent customer service. To illustrate, hotels would hire doormen, suited in high fashion, to open doors for patrons. These doormen mastered the art of remembering the names of hotel guests. It was a custom and an act of respect to tip the doormen for carrying umbrellas during inclement weather and for opening the doors of carriages.

Today, tipping is not only an accepted practice it is expected in many service sectors. Recently, an acquaintance of mine hired a very pricey moving service to transfer his furnishing to a new home. The owner of the moving company participated in the move and became upset when each member of his five person crew did not receive a tip.

From hospitality to foodservice to transportation, tipping is expected in many industries. It doesn’t matter if a person is serving cocktails, bussing tables or dropping someone off at the airport, most service people expect a tip.

In the service sector, homeowners are expected to tip plumbers, electricians, roofers and HVAC technicians, to name a few. This practice has crossover to include window cleaners, housekeepers, and yes, carpet cleaners.

Consumers believe they are obligated to give a tip to anyone working in a service capacity to ensure that the people they employ provide extraordinary work. Oftentimes, the consumer will offer beverages and sometimes food upon arrival to set the right tone. Some customers will take the time to ingratiate themselves early on to make sure that the work performed at their homes will meet their expectations. Customers are all the more delighted if a service person is motivated to exceed their expectations.

Some customers will even punctuate a forthcoming tip by saying, “If you do a good job, I will give you a generous tip, how does that sound?” They perceive that as a strategy to make sure the employee working at their home provides extraordinary work.

Sadly, tips are factored into the income of far too many occupations in the services sector, which has become dependent on the gratitude of their customers.

There has been a debate in the carpet cleaning industry over the years to determine whether companies should allow tips or not. Many are vocal about the pitfalls of allowing their technicians to receive tips. On the other end of the spectrum, there are many who allow it.

In light of my previous background as a carpet cleaning technician and owner operator, I would like to share some thoughts regarding this topic for your consideration. Having trained and worked with technicians throughout my career, I can honestly say that I have never met a technician who likes a “no tipping” policy. Not one! If technician retention is of importance to you, you might reconsider this policy.

There are three common reasons most companies do not allow tipping:

1.     Tracking of tips can become burdensome. How do you track a tip? More succinctly stated, how do you track tips from 50 technicians? The accounting time involved alone is mind boggling to say the least. It is never a good experience to be in the presence of a technician who is upset because he or she did not receive a tip. In my experience, I have seen a multi-truck carpet cleaning operation create an excel spreadsheet as a means of tracking tips. They had petty cash on hand in the amount of $500 at all times to keep tips off the books. After a year of wasted hours trying without success to manage tips, a decision was made to reverse their policy nationally to a “no tip” policy. If you are allowing tips it can become a no win situation.

SUGGESTION: If you do allow tips: Consider allowing technicians to receive cash tips only. Any tips on a check or credit card will be paid at their normal pay. This will limit having to track tips and keeping petty cash on hand. If you allow your technicians to receive cash tips, this will give your customer an honest way of rewarding the technicians for a job well done.

2.     Technicians have manipulated the tipping policy. There are a few technicians who will find a loophole and exploit it. Loophole finders may not believe that “leading a customer to a tip” is a manipulative practice. How can you manipulate a customer? If a technician says, “If you give me tip I’ll clean this or that for you” or “I take tips!” These two expressions are very manipulative. Sometimes, customers try to manipulate a technician by saying, “If you clean my (insert the service), I’ll give you a tip!”

SUGGESTION: If you allow tips, be sure to train your technicians on the nuances of your tipping policy. The policy should be clear and transparent to ensure that loopholes are nonexistent. This way, technicians and customers can stay clear of gray areas when it comes to your tipping policy.

3.     Technicians have cheated the company. Sadly, most restrictive policies on tipping are based on a few technicians who have “cheated” the company and given the wrong message to the customers that we hire dishonest technicians. Please keep in mind that dishonest technicians always come to the fore. When someone flagrantly cheats, their deception will be exposed. For example, while working as a commercial sales manager, an upset husband called the operations office to complain about a technician who cleaned his home. Apparently, this technician was also asked to clean a neighbor’s home across the street. The technician told the spouse, “If you give me the money in a tip, I’ll clean your home for a big discount.” The husband was upset at his wife but was mortified at the company for hiring such a “crafty lowlife” (his words not mine). The company refunded all their money without a hesitation and brought the technician into the office. Yes, he was fired on the spot for stealing.

SUGGESTION: Employee orientation is the ideal time to ensure that technicians are aware of company policy. If you are concerned about technicians using company equipment to perform “side jobs” on company time, you might ensure that this policy is covered during orientation and explain the consequences for engaging in these behaviors. 

Whether you allow tips or not, it is very important to explain and reinforce your tipping policy on a regular basis to help keep everyone away from the shifting sands of right and wrong. With properly set boundaries in place, you can allow customers an opportunity to reward technicians for excellent work.

 

Michael Morrow is an IICRC instructor and has been in the service industry for more than 30 years. He has extensive knowledge of the restoration sales process and cleaning methodologies. He currently works for Relationship Building Academy in Arizona.

 

 

*For helpful tips and resources to market your business, visit the Certified Firm only section of the IICRC website at http://www.iicrc.info/certfirms/marketing.html. If you don’t have your login information, enter your Certified Firm number as your username and the last four digits of your primary business phone number on record with the IICRC as your password. Please email help@iicrc.org if you need more information. 




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