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In this edition we’re talking tipping. Moolah, dough, coin, chedda— whatever you call it, your staff wants it. But where did this concept come from? Should we still do it? How do we make it more fair? We explore these questions, and more.
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The history of tipping |
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The current situation |
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Insights from the industry |
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Anything in there for me? Read on to learn how customers feel about shelling out tips in 2024.
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THE MORE YOU KNOW
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You gotta understand where things come from to know where they’re headed. Tipping is standard in North America, but in other parts of the world it’s not expected and could even be considered rude.
How did we get here? The dark origins may surprise you.
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BY THE NUMBERS
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66%
of diners feel too many places are asking for tips these days |
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64%
of diners think automated prompts make tipping easier |
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56%
of diners believe that a small tip is a good way to reprimand tipped employees for poor service |
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61%
of diners prefer to pay a slightly higher price for items to get rid of tipping |
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QUOTABLE
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Digital tipping is here to stay. But what are the rules of engagement? When it comes to counter service, is the tip screen any different than the old-school cash tip jar? Does that well-known rule of 20% for sit-down dining apply to counter-service and takeout? A professor, server, and etiquette coach weigh in on tipping:
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“It does seem like these [tip] screens are turning a passive failure to tip into an active decision not to. If I don’t put money in a [cash] tip jar, it’s a sin of omission. If I choose not to tip on a screen, it’s a sin of commission. We tend to be more forgiving of the former.”
– Mike Lynn, a nationally-recognized tipping expert, and Professor of Services Marketing at Cornell University’s School of Hotel Administration“If it’s a job, such as a barista, where you have an active part in assembling the order, [tip screen] tipping is fine. However, if it’s just me who takes the order and does [nothing] afterward, I feel like I’m getting paid to do nothing. It makes me feel bad to ask, if I’m being honest, because I’m well aware of the iPad tipping meme.”
– Adrienne, a host and server from Colorado
“Often, it’s not the employees’ choice to put the tip screen up. It’s the business owner or even the software itself. So there’s no need to feel awkward not tipping for a coffee. Electronic tip requests should never ‘guilt’ you into leaving a tip. Your purchase, a smile, and saying ‘thank you’ is often enough, but remember that tipping is easy—and for many service workers, a meaningful way to express gratitude for exceptional service. How do you want to be remembered?”
– Deborah King, Founder and CEO Final Touch Finishing School
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BECAUSE YOU COULD USE A LAUGH
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STORIES FROM THE FLOOR
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There are 101 ways to dole out restaurant tips – from percentages to points to by role. So we got four restaurateurs from diverse backgrounds together to talk about it. Consider their advice before you start evaluating your own tip structure:
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💰 Have a deep understanding of your labor costs
Kelly Phillips said, “Do the math…because that’s going to be your biggest challenge now. Not how great is your food, but can you actually afford to pay people what they need to make? You need to be actively managing your labor.”
💬 Keep communication flowing
Ksenia Adams said, “Once you make that decision to make a change, be transparent at every step. Make sure people understand what exactly you’re doing, and why you’re doing that. How are they gonna win in this situation?”
⚖ Know your local laws
Ji Hye Kim said, “You have to really understand your state’s law…I can do what I can do because I’m in Michigan. I wouldn’t be able to do it in New York because they don’t allow sharing across the department.”
👨 Take care of your BOH
Since Michigan allows tip sharing (excluding salaried managers), Miss Kim starts both FOH and BOH staff at the same wage. They have the same base pay and rate of tip share to keep it equitable and easy to understand.
😵 Use tools to save stress
Gavin Kaysen said, “The fact that we call it an industry – we need to be calling it a profession. And in order to embrace a profession, we would have to embrace all that entitles them. That’s technology, human interaction, equity of pay, all of the things that any profession would take into consideration.”
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Read more ways to develop your restaurant’s tip strategy here, (which also includes the full video roundtable you can watch instead).
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Take the pain out of managing your team’s tips 💸
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Ditch the calculator, spreadsheets, and manual data pulls. From tip collection and sharing to tip payment, automate your tip processes to increase efficiency and boost retention.
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DEBATABLE
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Q: Is it better to pay your team their tips in cash or digitally?
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A: Restaurant transactions have been moving away from cash and towards electronic forms of payment for years—and that’s extending to tips now too. So much so that 84% of restaurant transactions are cashless.
While this is convenient for customers, what are the implications for restaurants—and is this good for employees? According to Forbes, yes. Americans who leave their tips digitally tip nearly 15% more than when they tip with cash.
However, more digital tips means less cash passing through the restaurant on a daily basis. This causes managers to waste time running to the bank to restock cash for employee tip outs. And employees have to wait days or weeks to receive their earnings with potential real-life consequences for those with tipped minimum wages whose income depends on tips.
That’s why tip payment software was born. Read this to explore the pros and cons of digital vs cash tip payouts in restaurants.
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À LA CARTE
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You don’t have time for pointless articles. These aren’t those.
📖 Read: 4 Tips for Effective & Efficient Restaurant Staff Training
Tips are often a thanks for a job well done, boosting employee happiness. But to be good at their job, employees need to be set up for success. Investing in comprehensive training programs is essential for creating a cohesive and skilled team that sticks around.
📖 Read: 21 Tip Jar Ideas + Advice on Getting More Tips For Your Restaurant or Cafe
🎥 Watch: The Past, Present, and Future of Tipping (in 3 minutes)
📩 Free Download: Excel Tip Sharing Calculator
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