The tipping point! Behind the scenes to know how money travels

A server gets the swiping machine at a table at Woodside Inn, Colaba. Cash tips have taken a nose-dive since demonetisation

It's 8 o'clock on a Thursday evening at Woodside Inn, Colaba's "friendly neighbourhood bar" that opened its doors to patrons in 2007. Nestled in the 120-year-old Indian Mercantile Building on Wodehouse Road, this place offers an escape to both locals and travellers who come here to sample the craft beer while nibbling on its modern European fare. The dimly lit ambience is an apt match to the peppy music, which makes the place come alive without deafening you. The Happy Hours revellers have just left, so there's a slight breather, especially at the bar. Around 20 diners are scattered around its compact interiors, well-settled into their dining experience. Four to five servers go about their business as the shift manager keeps an eye on the workings.

Card payment receipts sans tip

On an average here, a meal for two with alcohol, would cost nearly Rs 2,500, on which a service charge of 10 per cent is levied, as is the norm at most restaurants. Typically, a service charge ranges from 5 per cent to 20 per cent, with most restaurants preferring to stick to 10 per cent of the grand total. It is this percentage that has been a talking point both online and offline, following the Department of Consumer Affairs' clarification on January 2, stating that service charge is subject to discretion of the customer, and not compulsory.

Money for smiles
What exactly is the service charge for, we ask Sean Perreira who has been managing this outlet for over five years. "Right from the second you step through the door, to the time the valet shows you out, it's an assembly line that ensures a quality experience. The livelihood of all these people depends on the service charge. And for the long hours they put in, their take home is not much," he says. The minimum take home (for an apprentice) at a restaurant and bar of this kind would be around R8,000, which can go up to Rs 35,000 for the managerial level. "Also, in no other industry, does the management look after the food, travel, uniform and the general upkeep of the staff on a daily basis. So, we won't shy away from taking service charge," he adds.

Sean Perreira

While to most customers it may seem that the tip or service charge he pays goes to the server directly, that's not case, at least not at Woodside. It trickles down to every member of their staff of about 70, right from the face at the door, Sunny Anthony D'Cruz who greets you. The 36-year-old has been strategically positioned at the door, as he's the one the staff relies on to read the customer. His 14-year stint at Athena, Colaba's erstwhile buzzing nightclub, where he encountered "everyone from politicos and celebrities to even gangsters" has taught him a thing or two about human behaviour. "Sunny gets the pulse of a guest, he alerts us, that perhaps we'd want to keep their card, should they escape without footing the bill or create a fuss over the service. We suffer if we don't pay heed to him," Perreira smiles, adding that such incidents occur once a month.

D'Cruz's "soothsaying powers" as Perreira puts it, comes in handy for head bartender Thadaeus Raja, especially. "Sometimes there are guests, who especially during happy hours lose count of how much alcohol they have consumed - could be by mistake or on purpose. Sunny gives us a heads-up to keep an eye, if he finds anyone suspicious. That helps," Raja says, adding that on a couple of occasions he has had to pay for the drinks when his customers escaped without footing the bill.

Rahul Jadhav, one of the head servers, is a sought-after name among regulars. In between catering to the regulars, right next to the entrance, he tells us how they always look to him for recommendations, sometimes without even looking at the menu. However, not everyone is easy and the more discerning and difficult a customer is, Jadhav smiles harder. He too gets his share of troublemakers. "It happens mostly during happy hours. Say I serve a guest his free drink, and move to the next table. He quietly mixes that drink into his first glass and then demands his 'free top up' with a straight face. That's when you need to handle it delicately, with patience. Sometimes we need to show him the CCTV footage, and then they accept it," Rahul says, adding he has even paid the bill for walkouts twice. "It was deducted from my salary." But they take care not to be too harsh with a guest. Perreira says, "Most times, it's the regulars who do this, and we don't want to lose them. So we coolly say, 'it's okay, happens' and move on. But, we take note and exercise caution the next time."

Not about happiness
Cash tipping has been at an all-time low at Woodside, where the wooden box that stores the monetary appreciation has been ringing empty. Jay Javeri, city-based entrepreneur, who dines out regularly and frequents Woodside Inn too, says, "I always check the bill, if there is a service charge, I won't add a tip. But if the service has been exceptional, I'll add a little. Like say, if there was something complimentary or if the waiter went out of his way with the service. Yes, one can say, they are just doing their job, but it's a way to let them know they are appreciated. Overall, I think it's better to let the customer decide, but in a country like India, where people generally under tip, I don't think it's wrong for a restaurant to include a service charge. What they might be doing wrong, is not passing that on to the staff."

Jadhav (left) and Raja take a breather between servings. Both have had their salaries deducted to foot the bills of defaulting customers . Pic/Satej shinde

At Woodside though, the process is transparent. The cash tips here, typically, range from anywhere between Rs 20 to Rs 500. Usually, they collect around Rs 8,000-14,000 a week, but post demonetisation, we are told, the number has taken a nosedive. "It's around Rs 4, 000-6,000 nowadays, which gets divided on a weekly basis among the entire staff of around 70. This includes kitchen, servers, housekeeping, valet, security and the central kitchen. Whatever is the slice of that pie, it is handed to the staff on Monday, and helps them take care of their week's travel, knick-knacks etc." Perreira says. The service charge collected gets credited to the staff's salary according to a point basis, based on their designation. The service charge is 10 per cent on the grand total, to which the government tax is added. "Once a group of foreigners did not want to pay all the taxes. They said they didn't get why they had to pay our government if they were pleased with the service the restaurant provided. We told them, we could waive off the service charge, but the taxes are not in our control. They understood and paid," Pereira said. He recalls another incident narrated to him by his former staff member, who works for a big restaurant chain now. "He called to check how we were doing, post the declaration. Last evening, it seems, all customers there walked away without paying the service charge. It started with one customer arguing, and when it was waived for him, others demanded the same for themselves too!"

On Thursday evening at Woodside, we waited around to see if at all a guest adds a cash tip. The wait never ended. From morning, till about 11 pm, not one guest had offered a cash tip, we were told.

Should service charge be replaced with a cash tip?

Perreira says, "A service charge not only helps the staff, but also the guests. They know what they need to pay, and removing it will create confusion. There's no regularising a cash tip. The business of hospitality is built on service charge, since centuries. And since the service charge becomes a part of my salary, I am being taxed on it. Once that goes, my tax bracket changes. I might not be eligible for the loans I've applied for. The government doesn't want to waive their taxes, (on the bill, which is about 5 per cent), but wants to eat into poor people's incomes," he adds.

Moreover, a tip is not necessarily a sign of a happy customer, points out Perreira. "He may be happy, he may not have the cash to show it."