NCL Cruise Service Charge Refund

[Love my butler]

The worst part is being away from their families for months on end.

 

Thats what makes me sad, they are away from their families, just so their families can have a better life. I teach at a private boarding school and one of our teachers is a Filipino. This person hasn't seen their spouse in 5 years. All the money they make goes to their spouse and children. That is why I bring a strap of dollar bills and hand them out when someone helps me, I know I am helping them help their families and maybe it helps them form missing them a bit

 

You do realize there are many thousands, tens of thousands of US military personnel on deployments for that long and longer. They are making very low wages and don't see their family for months to years right? They work their butts off and often give their life for this country. Do you hand them dollar bills when you see them too?

 

P.S. Countdown to this thread being locked/deleted.

[cathi007]

I guess it ticks me off when there is the "pay the DSC because the crew is so poor, overworked, and exploited and you are a terrible person if you remove it because it comes out of the poor workers' paychecks if you don't". And the way it is set up if every single person you come in contact with does a terrible job (never happened to me, just sayin') and you wouldn't tip them on land because you are so dissatisfied, if you remove it then (according to some on the boards) you're "punishing" all the poor, overworked and exploited behind the scenes staff who are (presumably) meeting expectations.

 

The real problem here is that the DSC is positioned as a gratuity/tip. That implies a one to one where exployee x interacts with you in a service role and you pay them directly based on your satisfaction with the service you have received. You ordinarily have a base tip (let's say 15-20%) for reasonable service; go above for outstanding, and go to the bottom of the range or lower for poor; rarely zero without extreme circumstances. But YOU get to decide how much to give, and it only affects the individual worker, not all the behind the scenes staff (for the most part).

 

That's not the case for DSC according to the vocal posters. Even if your steward does a terrible job, you can't reduce his tip without affecting everyone. And that makes this NOT a tip or gratuity at all, but part of the fare, and the "extra tip" becomes the way to tip above your standard range.

 

Maybe in the future the DSC cheerleaders might want to consider this alternative approach. The "poor, starving, underpaid & overworked & exploited crew member" approach is disrespectful to the crew and to me drips with charity and entitlement. Combine that with "this is a discretionary tip" and that's why we have these flame wars. After all, if the reason to pay the DSC no matter what is so we make sure the crew has a living wage so their families don't starve, IMHO that argues for REMOVING the DSC entirely and (honestly, no BS excuse) tipping each performing crew member directly MORE than their DSC share - but then what about the back-end people? OR - stay home and send your entire cruise fare to a charitable organization of your choice that cares for the poorest of the poor.

 

I AM passionate about this. The guilt trip insults my intelligence and common sense, and is demeaning both to me and to the crew. If the goal is to make sure we all pay our DSC, then just position it as I've said - it's part of your cruise fare, it's industry-wide, and it's positioned as a tip by the cruiselines just so you won't be taxed on it AND as a marketing trick to make their fares appear lower than they really are. ALL cruiselines do it - they utilize the US norm of tipping those in the service industry to get away with this.

 

It wouldn't surprise me if some of the "poor, poor crew member" posters either work for NCL or benefit in some other way from DSC being paid (or have someone they know benefit).

 

Now I'm going to try to shut up and go earn my paycheck to pay for my upcoming cruise and my DSC :>

 

You make valid points and I do agree with you. Frankly I wish it was added to our fare for the people behind the scenes and envelopes for the people who we directly deal with. I have never removed a DSC, nor would I ever (too much work anyway :)), and I always carry 100 singles to tip as I get good service. I have a daughter who served while in college, and I can't tell you how many people don't tip at all....it's crazy, as she was making a little over 3.00 and hour :(

[NLH Arizona]

Frankly I wish it was added to our fare for the people behind the scenes and envelopes for the people who we directly deal with. :(

I wouldn't want to go back to the envelope tipping time, because on the last night in the MDR when it is time to give out the tips, folks would skip the dinner (you would see so many empty tables), so they didn't have to spend their money to tip the Server and Assistant Server.

 

BTW, some have said that they wouldn't have an issue if they just added the DSC to the fare, but what I don't understand is whether it is in the fare or a separate DSC, it is the same, so why is one way better than the other? Also, if NCL were to include the DSC in the fare, I think that the crew would make out, because some would still tip, but can't you hear it now "look how much NCL raised their fares, they are just greedy". Look at what happened in the UK, they included everything in the fare and now some complain that the price is too high.

[cathi007]

not neccesarily. cruise ships are similar to restaurants in that in some/most restaurants the waiters tip out busboys/bartenders, etc., a room stewart might tip out laundry people or off duty crew that help him/her with his/her rooms. so that if he/she receives no tip they may still be paying other crew. this may be why behind the scenes people were added to the dsc. just wanted to point that out as it is often overlooked.

This just happened to my daughter the other night. She is serving while attending college and she worked the other night. She didn't get much in tips, yet she still had to tip out the bartender and bus boy. The only good thing about where she works is, if they don't make minimum wage, the restaurant makes sure they get minimum wage for the hours they work. Her old restaurant did not do that

[cathi007]

I wouldn't want to go back to the envelope tipping time, because on the last night in the MDR when it is time to give out the tips, folks would skip the dinner (you would see so many empty tables), so they didn't have to spend their money to tip the Server and Assistant Server.

 

BTW, some have said that they wouldn't have an issue if they just added the DSC to the fare, but what I don't understand is whether it is in the fare or a separate DSC, it is the same, so why is one way better than the other? Also, if NCL were to include the DSC in the fare, I think that the crew would make out, because some would still tip, but can't you hear it now "look how much NCL raised their fares, they are just greedy". Look at what happened in the UK, they included everything in the fare and now some complain that the price is too high.

 

True, I forgot about that. I wouldn't mind it being in the fare either, as long as it goes to the crew. This way if people want to tip more they can and if people don't want to they don't have to. Some people will always find something to complain about, I feel sad for them

[Seminole1975]

Quite bold of you to state that there is never any justification for removing the Discretionary Service Charge. Should we check with you on all matters to get the final word?

 

No and ridiculous question. I said some people. I never said never. Some people just do not like to tip. That is quite obvious reading their posts. And that is their choice no matter what anyone thinks of them.

 

In reading your posts, it seems as if you are trying to get into an argument with someone Mr. Butler (it is Mr.?) You are not showing the Love!

Edited August 9, 2018 by Seminole1975

[RDC1]

Do you really think the staff are getting your dsc handed to them directly?

 

It goes into a pool...and we have no clue at all where it goes or how it's distributed or how often. It's a negative comment card that is the real danger to crew not someone removing dsc

 

My take....

 

Ncl grabs dsc from us

 

They do whatever they do with it

 

They give a small bonus check perhaps on a monthly basis based on a prearranged % that is more than likely a minimum agreed upon % via contractual arrangement

 

 

Removing dsc isn't hurting anyone because ncl will pay their employees a satisfactory amount or risk losing them

 

And is your decision

 

Give cash if you want

 

Don't concern yourself with crew salary etc.

 

That's Ncl's responsibility

 

Crew are not slave labor

 

They take the jobs willingly

 

 

 

 

 

 

Sent from my iPad using Forums

The NCLH, the parent company is listed on the US stock exchange and therefore must follow US accounting rules. That means that tips, in order to qualify for tax treatment as tips, must

 

1. Be able to be adjusted by the customer

2. Be fully distributed to employees.

 

So the fact that you can adjust or remove your tip amount is the best indicator that the pool is fully distributed to employees.

 

So removal will negatively impact t but e employees.

[KateQ22003]

The NCLH, the parent company is listed on the US stock exchange and therefore must follow US accounting rules. That means that tips, in order to qualify for tax treatment as tips, must

 

1. Be able to be adjusted by the customer

2. Be fully distributed to employees.

 

So the fact that you can adjust or remove your tip amount is the best indicator that the pool is fully distributed to employees.

 

So removal will negatively impact t but e employees.

 

They don't call it a tip, they call it a service charge. Big difference.

[Seminole1975]

So removal will negatively impact t but e employees.

 

???

[Barb Nahoumi]

If someone feels that a certain employee is not doing his or her job properly, they can submit an uncomplimentary comment card about that person.

 

That may carry more weight about the employee's future with the cruise line.

[NLH Arizona]

If someone feels that a certain employee is not doing his or her job properly, they can submit an uncomplimentary comment card about that person.

 

That may carry more weight about the employee's future with the cruise line.

Or they can ask to speak with their supervisor and discuss the issue.

[LMaxwell]

The NCLH, the parent company is listed on the US stock exchange and therefore must follow US accounting rules. That means that tips, in order to qualify for tax treatment as tips, must

 

1. Be able to be adjusted by the customer

2. Be fully distributed to employees.

 

So the fact that you can adjust or remove your tip amount is the best indicator that the pool is fully distributed to employees.

 

So removal will negatively impact t but e employees.

 

NCLH can account for its revenue however they wish. They are not registered in the US. Additionally, the ships are foreign flagged, operated by sublease companies, and staff foreign.

[Expat Cruise]

You are dancing all around the point without actually hitting it. Nobody is saying you aren't free to post within the rules...this isn't being denied by anyone. All that I've been saying is that there is no NEED to explain, and or obtain agreement, on your reasons for what you decide to do with regard to service charges, gratuities, or both.

 

IOW, why can't you just do your thing without having to explain to people why...especially given that people aren't even asking why. :rolleyes:

 

Because everyone is free to express their opinions on the subject. Only weak sacred small people try to stop the free flow of opinions. Left everyone express their opinion and explain why or not their choice. The readers can make the judgement they want. Some say no need to explain, I say no one has the right to try to stop anyone from posting as long as it is within the rules of the site and the laws of the jurisdiction the site server is located within.

[SeaShark]

Because everyone is free to express their opinions on the subject. Only weak sacred small people try to stop the free flow of opinions. Left everyone express their opinion and explain why or not their choice. The readers can make the judgement they want. Some say no need to explain, I say no one has the right to try to stop anyone from posting as long as it is within the rules of the site and the laws of the jurisdiction the site server is located within.

Except that nobody has said a person can't have or state their opinion. It is just that some people don't want to hear it. You can speak, but you can't force others to listen.

[RDC1]

They don't call it a tip, they call it a service charge. Big difference.

 

What they call it makes no difference. You can call it service charge, gratuity, tip, etc. the name makes no difference. How it is handled does.

 

The charges that are added to drinks, that you cannot modify are treated differently as far as US financial regulation, compared to those that you can adjust or remove.

[RDC1]

NCLH can account for its revenue however they wish. They are not registered in the US. Additionally, the ships are foreign flagged, operated by sublease companies, and staff foreign.

 

Actually they cannot, because while they are not registered in the US they are listed on US stock exchanges, and must file financial reports that follow US financial regulations. As such they are subject to US treatment of tips. Otherwise they would not be in compliance, and the SEC would have something to say about their 10Q and 10K reports.

 

If you go to edgar and pull the 10k and 10Q filings you will see all of the places where their reference all of the various US regulatory requirements that they are following in their filings.

 

For example

 

 

Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

Edited August 10, 2018 by RDC1

[Expat Cruise]

What they call it makes no difference. You can call it service charge, gratuity, tip, etc. the name makes no difference. How it is handled does.

 

The charges that are added to drinks, that you cannot modify are treated differently as far as US financial regulation, compared to those that you can adjust or remove.

 

As others have said it makes a big difference in how the money is handle and how the income is shown. If it is a mandatory service fees it is handled one way but if it is a optional fee represented to be gratuities, it is account for and taxable in a completely different way.

 

But making these fees optional, NCL can save millions in taxes on this income. It is in NCL best interest to use these optional "service fees" to increase corporate profit.

[RDC1]

As others have said it makes a big difference in how the money is handle and how the income is shown. If it is a mandatory service fees it is handled one way but if it is a optional fee represented to be gratuities, it is account for and taxable in a completely different way.

 

But making these fees optional, NCL can save millions in taxes on this income. It is in NCL best interest to use these optional "service fees" to increase corporate profit.

 

 

Not quite. What I said is that using the terms service fees, tips, gratuities does not matter. What does matter is if they meet the accounting standards which has two primary requirements 1. All moneys received must be distributed to employees 2. They must be modifiable by the customer.

 

If they did not follow 1, then there is absolutely no reason for them to do 2. The fact that the cruise line makes it possible for people to remove them, is the the primary reason to be fairly certain that they are also following the full distribution rule as well. After all if they were not then there is no reason to allow removal.

 

Now for fees that cannot be adjusted, such as the fixed number added to drinks, because they are not adjustable, do not have to be fully distributed, those must be considered to be revenue and payments made from those funds to employees must be classified as salary, not tips.

 

Actually they do not avoid taxes. What the rule does allow is that tips are accounted for outside of the corporate revenue/expense system. They are not considered revenue, and payments to employees are not considered to be expenses (but all money must go to employees thus no additional income to the cruise line). Now if the rules were not followed then they would be revenue, but the money paid out would be considered expense, so as long as all money is paid to employees not following the rules would be tax neutral to the cruise line.

 

What would be different is that both revenue and expense would go up, lowering the cruise lines net margin vs their peers. It also could negatively impact their employees since depending upon country tips might receive different tax and retirement system treatment.

[Cafedumonde]

Actually they cannot, because while they are not registered in the US they are listed on US stock exchanges, and must file financial reports that follow US financial regulations. As such they are subject to US treatment of tips. Otherwise they would not be in compliance, and the SEC would have something to say about their 10Q and 10K reports.

 

If you go to edgar and pull the 10k and 10Q filings you will see all of the places where their reference all of the various US regulatory requirements that they are following in their filings.

 

For example

 

 

Certification of the President and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934

No, this is not true. There are Chinese companies on the US stock exchange. They just have to comply with security law. They are not required by US law to comply in any way with tips because NCL's ships are not registered in the US. Except for Pride of America. I bet tips are handled much differently on that ship.

[Maniacal Cruiser]

The NCLH, the parent company is listed on the US stock exchange and therefore must follow US accounting rules. That means that tips, in order to qualify for tax treatment as tips, must

 

1. Be able to be adjusted by the customer

2. Be fully distributed to employees.

 

So the fact that you can adjust or remove your tip amount is the best indicator that the pool is fully distributed to employees.

 

So removal will negatively impact t but e employees.

 

Very poor argument, all poodles are dogs but all dogs are not poodles.

[Expat Cruise]

Not quite. What I said is that using the terms service fees, tips, gratuities does not matter. What does matter is if they meet the accounting standards which has two primary requirements 1. All moneys received must be distributed to employees 2. They must be modifiable by the customer.

 

If they did not follow 1, then there is absolutely no reason for them to do 2. The fact that the cruise line makes it possible for people to remove them, is the the primary reason to be fairly certain that they are also following the full distribution rule as well. After all if they were not then there is no reason to allow removal.

 

Now for fees that cannot be adjusted, such as the fixed number added to drinks, because they are not adjustable, do not have to be fully distributed, those must be considered to be revenue and payments made from those funds to employees must be classified as salary, not tips.

 

Actually they do not avoid taxes. What the rule does allow is that tips are accounted for outside of the corporate revenue/expense system. They are not considered revenue, and payments to employees are not considered to be expenses (but all money must go to employees thus no additional income to the cruise line). Now if the rules were not followed then they would be revenue, but the money paid out would be considered expense, so as long as all money is paid to employees not following the rules would be tax neutral to the cruise line.

 

What would be different is that both revenue and expense would go up, lowering the cruise lines net margin vs their peers. It also could negatively impact their employees since depending upon country tips might receive different tax and retirement system treatment.

 

NCL can give the money to anyone they want. If they want they can give part to the Captain, even to other ships withing the line. They also can take all the "costs" of processing the money and giving to the workers. They can charge conversion fees and hanlde through several accounts, and other ways to reduce the amount.

 

Very easy to take a large amount of money and turn small amount with creative but legal accounting. The simple fact that the cruise lines will not tell you exactly who gets these funds and what the breakdown of the funds is, that alone is enough to not trust NCL. Added to the statement that CEO Del Rio made in which he said for every extra dollar per guest he can get the cruise line makes a 15 million dollar profit.

Edited August 10, 2018 by Expat Cruise

[Letsgo 2]

I must be missing something, it says the OP was from Sept 24th 2017 and its still being debated almost a year later ? WOW

Marion

[Wyoming2010]

I must be missing something, it says the OP was from Sept 24th 2017 and its still being debated almost a year later ? WOW

Marion

 

This thread was rebooted in June on page 6 -- post #111

[RDC1]

No, this is not true. There are Chinese companies on the US stock exchange. They just have to comply with security law. They are not required by US law to comply in any way with tips because NCL's ships are not registered in the US. Except for Pride of America. I bet tips are handled much differently on that ship.

 

You are not correct. Security law also means meeting US standards for financial reported (audited financial reports by the way certified to meet US financial regulations)

 

The US companies file financial reports to the SEC. You can go to the SEC's edgar site and read all of the US financial filings. These filings require the companies to follow US accounting standards and follow FSB regulations. Those regulations define how tips must be handled in corporate financial systems that produce those reports.

 

If tips meet the following rules 1. All money distributed to employees and 2. Customers can adjust or remove the tips then the tips are not considered to be revenue to the company and payments to employees are not considered salaries.

 

If those two rules are not followed then the company must include the amount in their revenue and must include payments to employees as salary.

[RDC1]

NCL can give the money to anyone they want. If they want they can give part to the Captain, even to other ships withing the line. They also can take all the "costs" of processing the money and giving to the workers. They can charge conversion fees and hanlde through several accounts, and other ways to reduce the amount.

 

Very easy to take a large amount of money and turn small amount with creative but legal accounting. The simple fact that the cruise lines will not tell you exactly who gets these funds and what the breakdown of the funds is, that alone is enough to not trust NCL. Added to the statement that CEO Del Rio made in which he said for every extra dollar per guest he can get the cruise line makes a 15 million dollar profit.

 

Actually not. They cannot give it to people outside of the defined tip pool. There are several legal cases that have clearly defined that limit. In this case the pool of employees are staff and supervisors in the hotel services portion of the ship. Those employees outside of hotel services, for example those on the ship side such as engineering, bridge, deck, etc are not included. Nor are any land based employees. Not entertainment personnel are also not in the tip pool.

 

They can take some money from a pool in one ship and move it to another to account for tipping shortfalls on a specific ship or route.

 

The only fees that the cruise line can apply to tips are those associated to actual credit card processing fees for those tips paid by credit card (I would expect a maximum of that to be in the 1.5 to 2% of tips paid by CC or about 27 cents of a $13.5 tip). Internal financial system costs are not allowed.

 

The kinds of manipulation you are claiming would be a violation of financial reporting standards and would cost the company far far more than any money they might want divert from tipping.