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 circ*mstances when the restaurant is forced to give it back as they are the mere custodians of the tip."
However, he says, there may be circ*mstances 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."
FAQs
"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 circ*mstances when the restaurant is forced to give it back as they are the mere custodians of the tip."
Can someone refund a tip? ›
Legally, the tip is a gift and does not need to be returned. However, as a matter of good customer service, you and the restaurant are almost certain to lose a customer if you don't return that extra tip amount.
How to answer someone who wants a refund? ›
You can create straightforward responses to these refund requests by following these steps:
- Start with a polite and professional greeting. ...
- Clearly state the purpose of the email. ...
- Provide necessary information about the refund process. ...
- Offer alternatives if a refund is not possible.
Be Polite But Clear
- Give a specific reason why you're declining the request. ...
- You may use apologetic language, such as "unfortunately," "regretfully," or "we are sorry we can't provide a refund on this occasion." However, your position should be clear and firm.
- Show that you've truly considered the request.
If you ever get overcharged, contact the merchant to let them know and ask for the charge to be adjusted. If the merchant won't help you, and you're sure the amount is incorrect, you can dispute the charge with your card issuer.
Do you legally have to refund? ›
Businesses can't take away a consumer's right to a refund or replacement for faulty products or services. It's illegal for businesses to rely on store policies or terms and conditions which deny these rights. For example, policies which say 'no refunds' or 'no refunds or exchanges on sale items'.
Can you refuse to give a refund? ›
If you want to return unwanted items to a bricks and mortar shop, they can refuse, as under consumer law you're not legally entitled to a refund. However many stores, typically the larger chains, do have generous goodwill returns policies, typically around 28 days, (but may be longer).
How to professionally ask for a refund? ›
Dear [Company Representative's Name], I am writing to request a refund for [product/service name] purchased on [Date] with order number [Order Number]. Unfortunately, the [product/service] did not meet my expectations due to [reason for dissatisfaction], and I believe a refund is warranted.
How do I persuade a refund? ›
Call up the business or visit and tell them that you are unhappy with the product or service. If necessary, you can send an email instead of calling on the phone. Don't delay, since some retailers have time limits on returns (e.g., 14 days). Be clear with your complaint.
How do I insist on a refund? ›
The Rules of Asking For a Refund
- You need to have a legit reason to ask for a refund. ...
- You need to ask clearly. ...
- You need to ask for a refund politely. ...
- You need to ask for your money back in a reasonable amount of time.
Most retail stores allow you to return things you buy within a reasonable time for a full refund, credit, or an exchange. When a store clearly displays a limited or no-refund policy, however, refunds and exchanges are not required by law. So don't assume a store will allow you to return an item if you change your mind.
What is the no questions asked refund policy? ›
A no-questions-asked refund policy is a customer service strategy that allows buyers to return products or services without having to provide any explanation or justification. It is often used by online businesses to attract customers and reduce the risk of dissatisfaction.
What to do if a customer is demanding a refund? ›
How to handle refund requests from customers to maintain customer trust
- Make sure you have a clear refund policy. ...
- Respond to refund requests quickly. ...
- Keep your cool and stay professional. ...
- Explain your decision. ...
- Offer an alternative solution. ...
- Ask for some feedback.
If you can't come to a resolution or the merchant does not agree to refund the transaction, you have the option to dispute the charge. If you do not recognize the charge at all and suspect fraud, you do need to involve the credit card company and possibly law enforcement.
What is double tipping? ›
The double-tip trick: When a restaurant party, usually 6 or more, accidentally pays a tip for a bill that already had a gratuity factored in, the server is supposed to let you know of your mistake, or in the case where you already have left the restaurant – remove the second tip from your bill.
Do you tip on top of 20% gratuity? ›
Others may automatically include gratuity when the bill is drawn. If either of these instances is the case, then no, you do not need to tip on top of this price. However, if the service was exceptional and you had a wonderful experience, an additional tip is never a bad idea.
Can customers take back tips? ›
Short Answer: No, You Cannot Take Back a Tip
This policy ensures that the delivery drivers, who often work part-time and rely on these tips as part of their income, can feel secure in the tips they receive.
Can a customer request a tip back? ›
After that, you can change your mind if you like, but you can't legally demand it back, whether it's a tip or a rare book or a used diaper collection. Nor do they legally have to give it to you.
Is refund abuse a crime? ›
Many fraudsters believe this to be a 'victimless crime,' but by governing bodies, they are considered a form of theft, as they can only occur by means of defraudation of stores and online eCommerce platforms.
What happens if the owner takes tips? ›
What happens if a manager or owner keeps a tip? For restaurant owners, the consequences of keeping employee tips could bring down your entire business. Repayment: First of all, you'll owe all of the stolen wages back to the employees, plus a fine of over $1,100 per violation.
