Service charge and gratuities

[LEAJO]

Can someone tell me if service charges and gratuities are one and the same thing or different.

Edited June 22, 2016 by LEAJO

[cb at sea]

Same thing....

[ColinIllinois]

Read the other thread a few posts up from NLH Arizona on this subject. Also check out the Frequently Asked Questions:

 

https://www.ncl.com/faq#tipping

 

https://www.ncl.com/faq#service-charge

Edited June 22, 2016 by ColinIllinois

[SeaShark]

Can someone tell me if service charges and gratuities are one and the same thing or different.

 

Service charges and tips/gratuities are NOT the same thing. (If they were the same, there would be no reason to differentiate between the two in the FAQ).

 

 

What is a tip or gratuity?

 

These are the general characteristics of a tip/gratuity:

 

• The payment must be made free from compulsion.
  
• The customer must have the unrestricted right to determine the amount.
  
• The payment should not be the subject of negotiation or dictated by employer policy.
  
• Generally, the customer has the right to determine who receives the payment.
  

 

What is a Service Charge?

 

Service charges will usually be clearly indicated as such. If any of the above listed traits for a tip are missing, however, then it is usually a service charge. In other words, a service charge is, when:

 

• The payment is mandatory.
  
• The customer does not possess the unrestricted right to determine the amount.
  
• The payment is the subject of negotiation or dictated by employer policy.
  
• Generally, the customer does not hold the right to determine who receives the payment.
  

 

 

In short, if ALL four characteristics are present, then it is a tip. If one or more are not present, then it is a service charge.

[Love my butler]

Can someone tell me if service charges and gratuities are one and the same thing or different.

 

As far as NCL is concerned, they are exactly the same thing. They can also be referred to as tips. Different words, same meaning on NCL.

[Sissaaaaaa]

They are the same thing.

[luddite]

Can someone tell me if service charges and gratuities are one and the same thing or different.

 

Many of us can answer that question.

[BirdTravels]

Can someone tell me if service charges and gratuities are one and the same thing or different.

 

From the perspective of being on an NCL cruise, they are exactly the same thing.

[fshagan]

In short, if ALL four characteristics are present, then it is a tip. If one or more are not present, then it is a service charge.

 

The IRS and their definition for taxation of tip income is not the authoritative source for NCL's use of the terms.

 

NCL says the DSC is a gratuity, and NCL says it is a "Discretionary Service Charge", and NCL says it is "tips". It all means the same thing to NCL, notwithstanding what the IRS says.

 

For US-based employees NCL must treat any monies from the DSC/gratuity/tip pool as income and collect income tax and any payroll tax due on that amount (including any taxable benefits). For Filipinos, NCL does not withhold income tax on the passed through tips/DSC/gratuities.

 

The term isn't what we insist it is, it is what NCL says it is. That's why they made up the term "Discretionary Service Charge".

[SeaShark]

The IRS and their definition for taxation of tip income is not the authoritative source for NCL's use of the terms.

 

NCL says the DSC is a gratuity, and NCL says it is a "Discretionary Service Charge", and NCL says it is "tips". It all means the same thing to NCL, notwithstanding what the IRS says.

 

For US-based employees NCL must treat any monies from the DSC/gratuity/tip pool as income and collect income tax and any payroll tax due on that amount (including any taxable benefits). For Filipinos, NCL does not withhold income tax on the passed through tips/DSC/gratuities.

 

The term isn't what we insist it is, it is what NCL says it is. That's why they made up the term "Discretionary Service Charge".

But NCL also says that tipping is never required on their ships. That doesn't seem to fit with your attempted interpretation. Why have 2 different FAQ answers if it is the same topic?

[sparks1093]

But NCL also says that tipping is never required on their ships. That doesn't seem to fit with your attempted interpretation. Why have 2 different FAQ answers if it is the same topic?

 

NCL made it clear when it switched to the service charge model that the service charges were replacing the suggested gratuities because the service charge model was easier to administer under the Freestyle concept. Since functionally the service charge is the same as the gratuities charged on other cruise lines it makes little sense to quibble over it, especially since the service charges can be adjusted by the passenger at will.

[tggs726]

This thread clearly needs some clarification.

 

OP are you referring to the Daily Service Charge or the Service charge on the "free at sea" amenities?

 

Depending on which you are referring to will change the answer to your question.

 

-Matt

[SeaShark]

NCL made it clear when it switched to the service charge model that the service charges were replacing the suggested gratuities because the service charge model was easier to administer under the Freestyle concept. Since functionally the service charge is the same as the gratuities charged on other cruise lines it makes little sense to quibble over it, especially since the service charges can be adjusted by the passenger at will.

More unsourced opinion? We already have enough of that, no?

 

FWIW, having to pay in advance, filling out and sending in paperwork afterwards, and then waiting for approval hardly (IMHO) qualifies as "at will".

[ColinIllinois]

This is now as clear as mud for the O.P. :D

[sparks1093]

More unsourced opinion? We already have enough of that, no?

 

FWIW, having to pay in advance, filling out and sending in paperwork afterwards, and then waiting for approval hardly (IMHO) qualifies as "at will".

 

When I sail on CCL I pay a specified amount a day and may adjust the amount if I wish to and this amount is used to pay the frontline staff.

 

When I sail on NCL I pay a specified amount a day and may adjust the amount if I wish to and this amount is used to pay the frontline staff.

 

If it walks like a duck and talks like a duck it's a duck.

 

And while NCL does require a passenger to make the adjustment after the cruise is over this does not change the fact that a passenger may make the adjustment for any reason they wish to and that is what I consider to be "at will".

[Aquahound]

As far as NCL is concerned, they are exactly the same thing. They can also be referred to as tips. Different words, same meaning on NCL.

 

They are the same thing.

 

I agree. They're the same. The Service Charge can be removed, therefore, it's a gratuity. Period.

[SeaShark]

When I sail on CCL I pay a specified amount a day and may adjust the amount if I wish to and this amount is used to pay the frontline staff.

 

When I sail on NCL I pay a specified amount a day and may adjust the amount if I wish to and this amount is used to pay the frontline staff.

 

If it walks like a duck and talks like a duck it's a duck.

 

And while NCL does require a passenger to make the adjustment after the cruise is over this does not change the fact that a passenger may make the adjustment for any reason they wish to and that is what I consider to be "at will".

 

And that is the core of the whole issue. It isn't facts that matter, everything comes to "what I consider" opinions.

 

Since you consider it to be, then therefore it must be and no amount of fact or opinion can change that.

 

Problem is that one is a gratuity and the other is a service charge...they are not the same...no matter who "considers it to be".

[Crusin6]

Let's keep it simple here....even though it's not all that simple because most cruisers feel guilty ....

 

 

They charge 18% for drinks and specialty restaurants...charged to you upfront even if you get the free ubp perk

 

 

They charge $13.50 per day per person to your account for a service charge ....you can prepay this or just let them charge you daily or remove it completely if you choose...and tip in cash...or not at all

 

 

Do you need to tip anyone extra....nope....not even for room service.....not even that favorite bartender you found

 

 

Do others tip extra....sometimes

 

Do others not tip extra....sometimes

 

 

Will posters here now be all concerned about making sure the dishwasher gets a tip too...and the guy in the engine room stoking the coals....yep....but that's just them

 

 

What do I do?....

 

 

I leave the $13.50 in place

 

I tip my room steward $20 or $30 extra in cash on the last morning

 

I don't do concierge or butler because I see that as an intrusion and would never book a room with one

 

If I buy something that charges 18% I just leave it on

 

 

 

 

 

Sent from my iPad using Forums

[sparks1093]

And that is the core of the whole issue. It isn't facts that matter, everything comes to "what I consider" opinions.

 

Since you consider it to be, then therefore it must be and no amount of fact or opinion can change that.

 

Problem is that one is a gratuity and the other is a service charge...they are not the same...no matter who "considers it to be".

 

I said that functionally they are the same and they are, just different terms for the same thing (yes, there may be legal distinctions between the two but as a paying customer those distinctions make no difference to me).

[SeaShark]

I said that functionally they are the same and they are, just different terms for the same thing (yes, there may be legal distinctions between the two but as a paying customer those distinctions make no difference to me).

 

But again...they are not functionally the same...despite the fact that to you they appear to be.

 

Those distinctions may make no difference to you, but they do make a difference to others.

 

Can you live with that, or are you just going to keep this discussion going?

[iluvdietcoke]

So is the $13.50 per person, per day mandatory?

[Cruzaholic41]

The daily service charge is a gratuity. It's been explained time and time again on these boards by people in the know (BruceMuzz comes to mind). Different lines use different terms - tips, gratuities, daily service charge, hotel service charge, etc. But it is all still a gratuity for tax purposes. If the daily service charge couldn't be removed by the passenger, it would not be a gratuity. But it can, so it is.

 

So is the $13.50 per person, per day mandatory?

 

It is only mandatory in the way it gets charged to your account on board. You can remove it after the cruise though. So technically, no, it is not mandatory.

[NLH Arizona]

So is the $13.50 per person, per day mandatory?

Just like every other cruise line (cruise lines have different names for it), it can be adjusted or removed. Here is what NCL says about it: If I cancel my cruise are the service charges refundable?

Yes! The service charges are 100% refundable. If there is a service issue can the service charges be adjusted on board? Guest satisfaction is the highest priority at Norwegian Cruise Line. We have structured a guest satisfaction program designed to handle any concerns about service or on-board product quickly and efficiently. However, in the event a service issue should arise during your cruise please let our on-board guest services desk staff know right away, so that we can address these in a timely manner. It is our goal to reach a satisfactory solution to any issue when it happens and make sure our guests can focus on enjoying their cruise. Should your concerns not be met with satisfaction you can adjust the charges.

 

Here is what Celebrity says: At your discretion, the gratuity payments may be adjusted onboard at Guest Relations, in which case they will not automatically be added to your onboard SeaPass® account.

 

Here is what Carnival says: Should a guest not be satisfied with the service they receive, they can contact the Guest Services desk while onboard. This will allow us to address their concerns in a timely and appropriate fashion. At the discretion of the guest, they may adjust the gratuities at any time while onboard. Gratuities will be deemed undisputed unless a request to modify is received prior to disembarking the ship.

 

Here is what Princess says: Please note gratuities will be deemed undisputed unless a request to modify is received prior to disembarking the ship.

[sparks1093]

But again...they are not functionally the same...despite the fact that to you they appear to be.

 

Those distinctions may make no difference to you, but they do make a difference to others.

 

Can you live with that, or are you just going to keep this discussion going?

 

Of course I can live with it, I'm just passing time as I recover from surgery;). In both cases the money is used to pay the frontline crew and in both cases the passenger has the ability to adjust the amount if they wish to, so why wouldn't I see them as functionally the same since they serve the same function?

[SeaShark]

Of course I can live with it, I'm just passing time as I recover from surgery;). In both cases the money is used to pay the frontline crew and in both cases the passenger has the ability to adjust the amount if they wish to, so why wouldn't I see them as functionally the same since they serve the same function?

 

Why wouldn't you? How about the other side...why would you?

 

 

I mean an apple provides nourishment.

I put the apple in my mouth.

I bite off a portion of the apple.

I chew and swallow the apple.

My body digests the apple taking what it needs and expelling waste.

 

I can also make all of the above statements for a steak.

 

 

And while the steak and the apple serve the same function (as food), seeing them as the same is still not correct...one is still a fruit and the other is still a piece of meat.

 

It is easy to see things as the same when you only consider the similarities, it is the differences you aren't taking into account that matter.

 

 

I mean, seriously, if they were the same, then why wouldn't NCL, the IRS, and a ton of other businesses just all just use one common definition and term?? Why does NCL have one FAQ on Gratuities and another on Service Charges? Why doesn't the FAQ on Service Charges just say "Service Charges are the exact same thing as Gratuities. Please see the FAQ on Gratuities for further information."??