Employee Enigma: When the client pays, who tips?

by epi on December 30, 2011

Q: A regular client has offered to have me and two other employees in the firm go to lunch ‘on him’ as a holiday gift. He will not accompany us, but has told me to let him know when we are going, and he will make arrangements with the restaurant to pay the bill. I feel that we should pay the tip, since we are the ones who are receiving the service, but the other two disagree with me. Should we pay the tip, or leave it for the giver to include it when he pays the bill?

A: Since the client made the arrangements with the restaurant for paying the bill, you should inquire if his payment includes the tip.  If it does, you aren’t obligated to tip but certainly may add to the tip if you feel you received exceptional service.  If not, it would be appropriate for the three of you to leave a tip.

{ 6 comments… read them below or add one }

Jerry January 1, 2012 at 11:55 am

Wait a second . . . your client (i.e., one who pays you) is going to pay for your team’s lunch even though the client isn’t going to be there? Ok . . .

The EPI advice here is dangerous and short sighted. Unless you’re going to Charlie Trotters, don’t ask the client if his generosity includes the tip or not. You should tip anyway for three very practical reasons: (1) Tips are generally not a lot of money and you can swing 15% or so of the cost of the free meal, which leads me to . . . (2) you sound cheap if you ask the client if he is also paying for certain itemized expenses, and (3) If you both tip, the restaurant will likely mention it to the client and you get to be seen as a generous person in the client’s eyes, which can lead to more business or referrals down the road.

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Winifred Rosenburg January 1, 2012 at 7:40 pm

I interpreted it to mean you should inquire with the restaurant.

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Jerry January 2, 2012 at 11:02 am

A valid interpretation, Winifred. But this distinction doesn’t offer much of a difference.

If the client is on good enough terms with the restaurant that he can “make arrangements with the restaurant to pay the bill,” you have to assume that he has a significant business or personal relationship with the restaurant and that anything you say or do will get back to your client. In fact, a cynic would say that anything you say or do would get back to the client in an amplified manner; if you are polite, the restaurant will report back that you were exceedingly polite. But if you ask if you have to tip your waitress (and there is no way to ask whether you have to tip your waitress and not sound like a cheapskate or a jerk), that will be reported back to your client as well.

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Zakafury January 3, 2012 at 11:49 am

My initial reading was also to ask the restaurant manager if the arrangement already included a gratuity. While this might work fine, I would feel obligated to leave some additional tip anyway, simply to avoid appearing cheap.

I think the best approach is to look at it like a gift certificate for your meal. You are still responsible for tipping the wait staff, the bartender, and the valet.

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Jodi Blackwood January 1, 2012 at 8:36 pm

I agree with Jerry. This luncheon is a gift and the only appropriate response is “thank you” … not “So, are you going to be covering the cost of the tip too?” That could then easily segue into “What about our parking costs or better yet, valet parking?” Perhaps not, but I’m sure you get the point.

This should be treated as any other business luncheon. Order middle of the road items in terms of price, do not go all out in terms of appetizer, salad, entree and dessert — select one or two in addition to your entree, no more, and leave a tip for your server. If your host includes a gratuity when the bill is paid, then there will be a happy server that night, but it is not something to appear cheap or nit-picky about with your client.

Remember to send a note to your client immediately upon returning to your office, thanking him for his generous hospitality!

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Maggie January 3, 2012 at 5:06 pm

Since you seem worried about it, know that you will never look bad (to the server, to your client, to your co-workers) by leaving extra gratuity–especially around the holidays. But these comments make it seem like you have more to worry about than you probably do.

Logistically, after you choose the restaurant, your client (or his assistant) will probably just call and leave credit card information to cover your bill. He will be asked at that time whether he wants to include a gratuity. And that will likely be his only interaction with the restaurant. If there is a second round of phone calls (i.e. the restaurant conveying the total cost to his assistant, etc.) it is highly unlikely the manager or hostess who makes the call will have any knowledge of whether you left a tip or how generous it was.

If he did just pay the bill without including a tip (which I honestly think is unlikely) the server will find a way to quietly convey this to you–probably by bringing a bill with the total food amount credited but with a tip line.

In either instance, leaving a gratuity with a “happy holidays!” to your server can only make you look generous and cheery to all involved.

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