Ireland’s consumer watchdog has called for restaurants, cafes, hair salons and other service providers to ensure tipping policies are transparent so people don’t inadvertently pay over the odds.
The Competition and Consumer Protection Commission (CCPC) said technology has changed the tipping landscape, as it issued guidelines to ensure that people more clearly understand where their money is going and why.
It published research into tipping culture in Ireland, which found 90 per cent of consumers tip at least some of the time – with women and the over-35s most likely to tip.
Two-thirds of Irish consumers believe tipping has become less voluntary, while one in five said they had recently paid a bill that included an unexpected extra charge.
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The CCPC highlighted the prevalence of standalone tipping terminals, with one in four consumers saying they had tapped in error.
The CCPC guidance said tipping on payment terminals should be easy to avoid. It reminded service providers of their obligation to prevent accidental tipping by keeping tipping terminals separate and clearly labelled.
It pointed out that mandatory service charges must be clearly communicated in advance and optional service charges must never automatically be added to a bill.
“Newer technologies like payment screens and tipping terminals are changing the way we tip for services. It’s important that businesses using these technologies do so in a way that protects the consumer’s right to decide whether and how much to tip,” said the CCPC’s Simon Barry.
“Transparency is vital. Any mandatory service charges must be flagged well in advance, optional charges must never be automatically added to bills, and tipping terminals should be placed away from payment terminals to avoid any confusion.”
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Meanwhile, a recruitment company has called on the Government to consider removing tips – or a certain amount of tips – from the tax net.
“While new legislation was introduced in late 2022 to ensure that staff get paid their share of tips left by customers, the Government should have gone one step further and considered excluding income derived from tips, or a portion of it, from the tax net, said Shane McLave of Excel Recruitment.
“All tips received by staff are currently taxable, [but] given the often low-paid nature of the work – and the huge staff shortages which the hospitality sector is currently grappling with, more people could be encouraged to work in the sector if tips were not taxable – or if they could earn a certain portion of tips tax free.”
He noted that PAYE employers are already allowed to gift employees up to €1,500 in tax-free vouchers per year and said “a really progressive move could be to introduce a similar scheme for employers and employees in service industries, so that workers might be able to receive tips up to a certain threshold without incurring a tax bill”.
