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EXPLAINER: If you have 'tippers regret', can you really ask for a refund?

Jun 18 2019 05:00
Marelise van der Merwe

A local waitress made headlines when she received a R20 000 tip – and promptly lost most of it, when the patron's wife requested that it be returned.

News24 previously reported that a patron at Paarl pub Breezy Hill felt particularly generous after running up a R379 bill that included several drinks, topping it off with a tip of R19 621 to be charged to his credit card.

The waitress told Netwerk24 the man had originally wanted to pay her R1m.

When the beneficent customer's wife requested the money to be returned the next day, pub owner Andy Parr refunded it, as the money had not yet cleared. The waitress received a R100 tip in the end.

In this case, the request was not contested, and life went on. But where does the law stand on such requests? Who owns tips? How are they regulated? Are they taxable? Do customers have the legal right to ask for their tips back? And if it's contested, who wins? Fin24 found out.

Who owns tips? Not just for wait staff, but service staff in general?

"Tips are in fact classified for the waitering staff only as they are normally given to the individual person and not to the staff in general. 

"However, many restaurants have a policy in place which everyone has signed that all the tips will be pooled and given equally to everyone including the kitchen staff," says labour lawyer Michael Bagraim.  

Can an employer keep tips to distribute or not distribute as they see fit?

The employer cannot make a decision just to keep tips and distribute them as they see fit, says Bagraim. As in the example above, an organisation may have its own agreement between staff.

If a customer requests their tip back for whatever reason, can the waiter or employer legally refuse or dispute it, should they wish to do so?

The large tip in the Paarl example was "of interest", says Bagraim.

"If a customer requests the tip back it is in fact not for the restaurant to give it back but for the individual owner of the tip. There are no circumstances when the restaurant is forced to give it back as they are the mere custodians of the tip."

However, he says, there may be circumstances in which it is deemed fair to return the tip, for example if the patron in question were under the influence when giving a very generous tip. "There is a concept in our Roman Dutch law known as 'snatching at a bargain'. The gentleman could claim that he wasn’t in full control of his senses," Bagraim told Fin24.

How well regulated is the earning of gratuities in the service industry? Where is there room for improvement?

Although tips are taxable, this does not mean the earning of gratuities is well regulated. The practice is "open for abuse", says Bagraim. "Many restaurants in fact keep the tips and use it to pay for breakages etc., which is both unfair and wrong."

There are widespread problems, says Bagraim. "The restaurant industry do, to a large degree, abuse the situation and often charge all sorts of extra expenses such as their credit card expenses and everything else they can think of."

Unfortunately there is also little recourse for service staff, he adds. "There is a bargaining council for the service industry but this is not universally implemented and to a large degree ignored.  

"There are still hundreds of waiters and waitresses who work purely for tips and in fact are employed illegally because the employers are ignoring the minimum wage legislation."

tipping  |  hospitality  |  restaurants
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