We recently returned from a Regal Princess cruise to Alaska and I asked one of the staff, who depended on tips, about charging tips to our on-board account. My question was: "do you receive the full dollar amount of the tip I designate (and charge to the room), or something less?" The answer from the staff member was: "they charge us $1 per day for their handling of the tips." That, fellow cruisers, means that if you were a couple on a 7-day cruise and you tipped your room steward $42, the folks at the Purser's Desk would deduct $7, resulting in a net tip to the room steward of $35.
Unfortunately, this is not disclosed to the passengers when this method of tipping is offered. As a result, to reward the room steward his/her fair tip the passenger needs to either increase the amount of the tip or use cash.
As most everyone knows, the credit card firms charge a percentage of the total transaction amount to the vendor, so if Princess let the passenger use a credit card there is truly some cost to them.
We have used cash in the past and will continue to do so in the future to avoid the service charge being passed along to the staff and reducing their income.