American-Style Tipping Is Testing British Pub Culture

(Bloomberg) — For UK pubgoers, the biggest choices are generally straightforward: beer or whisky, draft or bottle, pint or half.

But now, beer-drinking Brits face a new and increasingly frequent quandary—to tip or not to tip.

Some of the country’s biggest pub chains are asking guests to top up the tab with a gratuity of 10% or more, making for awkward moments at the public house, an institution whose age-old appeal is ingrained in the reliable fabric of British tradition.

“It’s not normal for us to give a tip, when I’ve had to go to the bar and wait in a queue and all they do is give me a drink,” says Juliette Layne, a 59-year-old project manager in London, as she sips a rum and Coke with friends at the Phoenix, a pub just steps from Buckingham Palace. “To me it doesn’t resonate.”

Until recently, pub tips were modest: a few odd coins tossed into a jar on the counter after pints were poured. Using a card to tip was often impossible and could even elicit eye rolls from an unsympathetic bartender. But that’s changing, as transactions go cashless and as US bar and restaurant routines infiltrate UK pub culture. The brewing shift—spurred on by strained pub-chain profits—has made it confusing for customers who aren’t used to shelling out extra money for a beer.

The pandemic has also played a role: When pubs and restaurants reopened after lockdown, QR codes had replaced physical menus in many spots, giving establishments a chance to nudge customers on gratuities as they paid by phone.

“You’d get prompted like 10%, 15%, and it was just a click, and it was very, very easy to tip,” says Luke Beavon, who heads UK operations at card-payment company SumUp. “People were excited to be going out again and were feeling generous.”

Tipping is now taking place at pubs, bars and nightclubs with the second-greatest frequency among all merchant categories (higher than in taxis or hair salons), based on UK card transactions tracked by Dojo, which provides digital payment services. The top two sectors, encompassing restaurants, cafes, pubs and bars, account for more than 90% of tipping across the country.

More Customers Tip in the Pub Than in Taxis or Hair Salons | Over 90% of tipping in UK occurs in first two categories

Pub chains are trying to increase tips or related fees to help attract staff at a time when their own profits are under pressure from wage and food-cost inflation. Rules coming into effect in October will also make it illegal for employers to retain any portion of service charges, further squeezing income for some businesses.

“It’s been a challenge for the hospitality sector to make sure they recruit enough staff and retain colleagues,” says Simon Emeny, chief executive officer of  pub chain Fuller Smith & Turner Plc, which passes along all gratuities to employees. “The opportunity to get tips is a big retention factor in the sector.”

Back at the Phoenix, a Young & Co.’s Brewery Plc pub, an order for two pints of Camden Hells lager comes to £14.60 ($18.30), with an optional tip of 12.5%, 15% or 20% suggested by the card reader. Raj Dodhia, part of the group with Layne, says he thinks business owners are encouraging tipping to make up for low wages, as is the norm in the US. “It’s gone too far,” says the 49-year-old IT worker as he nurses an Estrella. “I’ve got a bugbear about this.”

“Tipping in our pubs is entirely at the customer’s discretion,” says a Young’s spokesperson in an emailed statement. “The functionality on our card machines simply makes it easier for them to do so if they choose to.”

Stonegate Pub Co.—the largest UK pub group—was pilloried last year for introducing surge pricing during peak hours at many of its locations to boost profit margins. Stonegate declined a request for comment.

As with so many other industries, technology has been a primary driver of the change. Handheld card readers now allow merchants to suggest an added tip—a feature being rolled out across UK’s service-oriented industries, just as iPad screens galvanized the spread of tipping in America, from Manhattan deli counters to Starbucks registers in San Diego.

Tip Requests Are on the Rise Across the UK |

Customers are also using contactless payments for smaller transactions like a pint, says Kate Nicholls, CEO of the trade body UK Hospitality. “Previously you might have only used a card payment when you’re buying a meal, but now you’re using it for more purchases at lower price points.” That in turn gives guests the ability to add a tip for a beer on their card.

Among the companies facilitating the pub-tipping movement in the UK is Tipjar, a gratuity platform that offers dedicated card readers for bar  customers to tip a standard amount such as £2 electronically, without delaying the main payment for drinks and food.  This way, “the transaction from staff member to customer doesn’t get slowed down,” says Tipjar Chief Commercial Officer Dan Hawkie.

Some pubs are resisting the trend in tipping. Wetherspoon Plc, another large UK chain, says it eschews tips on cards. This week, the company reported a jump in quarterly sales. At Greene King Ltd., tipping differs by its brands (the company’s London locations include Kings Arms in Bishopsgate, Shakespeares Head in Soho and Duke of York in Mayfair). Some of its pubs offer the option to add a tip at the point of payment with cards, while others don’t.

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UK restaurants have largely adopted gratuities as the norm. The optional 10% cash tip has morphed into a not-so-discretionary 12.5% service charge, added automatically to the bill and paid with the tap of a card or phone. The same is true in pub dining rooms.

Still, the multiple approaches can result in tip requests that are truly exorbitant for the UK, and notably in pubs that serve food.

At the Jugged Hare, a gastropub near London’s Barbican specializing in wild game, a recent dinner for five in the dining room came to £385.30 for dishes such as Scotch egg with haggis, and wild Norfolk hare braised in its own blood.

After a 12.5% service charge of £48.16, the card reader prompted the customer to add an additional 10% or more. The result: gratuities totaling £91.51—a 24% premium that wouldn’t be out of place in Manhattan. ETM Group, which owns the Jugged Hare, didn’t respond to requests for comment.

Ironically, tipping may have gotten its start in English taverns four centuries ago. It spread from Europe to the US, where employers like railcar operator Pullman Co. greatly expanded its use after the Civil War, to minimize wages paid to newly freed slaves.

Tipping has become even more widespread in the US since the pandemic, intensifying a debate over when to tip and how much, and over minimum-wage laws that allow employers to pay tipped workers as little as $2.13 an hour.

In the UK, where the minimum wage for all workers age 21 and over is £11.44 an hour, the proportion of merchants asking for a tip has expanded steadily in the past several years, though it’s still relatively low.

The percentage of SumUp clients using the tip function rose to 2.9% in March across all merchant categories, from 2.1% in September 2021, according to tracking data provided by the payment company. In pubs alone, the March figure was 2.4%.

Yet even at the same establishment, messaging can be inconsistent. On a recent Tuesday at the Counting House, a Fuller’s pub in the City of London, two half-pints of Lucky Saint yielded a bill of £7 including VAT, with no add-ons, handled with a simple tap of the card. A little later, at the same counter, a lunch order for two—venison casserole and a BLT with triple-fried chips—came to £31.45. In this case, before the payment screen came up, the card reader first asked the customer whether they wanted to tip 10% more.

The prompts are becoming more common in Fuller’s pubs and are almost always tied to food orders, CEO Emeny says. Card readers at the chain’s almost 400 pubs don’t request tips when only beverages are ordered, a company spokesperson adds.

“It’s very important for UK pubs that they retain their values,” Emeny says, “and actually don’t become like New York or Boston.”

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