Restaurant Tip Distribution Solutions

Restaurants provide their guests with a simple method to tip the staff for the service they received. The ever ubiquitous preset options (15%, 18%, 20%) have become a norm in certain types of establishment. However, a persistent issue lies behind the scenes in the restaurant industry: the inequitable distribution of tips among employees. In this blog post, we will explore the current need for enhanced employee tip distribution and the potential solutions that can create a better working environment. 

The problem with current tip distribution practices is that servers and bartenders typically are the primary recipients of tips, which leaves other essential staff, such as bussers, hosts, dishwashers, and bar backs to be tipped out from the direct tipped employees which can be discretionary and inconsistent. Restauranteurs are doing their best to make this tip distribution fair and equitable, however, this usually involves complicated spreadsheets and little to no commonality from one restaurant to the next which is confusing to employees.  Not to mention the fact that 80-90% of tips are left on a credit card making tipping out cash a hassle. Restaurant and bar owners should be applauded for working as hard as they do to fairly compensate all of the staff they rely on to run a successful operation.

PYMNTS reports that many restaurant owners "are seeking ways to improve the tip-divvying process, both reducing labor needs all told by taking time out of the payout process and making it easier for staff to get their payments." These owners can take advantage of software solutions, sometimes already built into their POS system to simplify, automate and standardize the tip-out process. Heartland Restaurant pos supports both tip pooling and automatic tip distribution with some simple configuration that can accommodate most operations. Tips can be paid at the end of the night/shift or included with payroll. 

For more complicated tip distribution needs, third party companies can customize tip distribution with interfaces into the POS and payroll and some are now offering the ability to fund debit cards with tip pay outs each day. Software applications to consider tip automation that can interface into a point-of-sale system are: TipsSender, 7Shifts and Kickfin

Implementing fair tip distribution practices utilizing software tools in restaurants can yield several benefits. Firstly, it motivates all employees to provide exceptional service, knowing that their efforts will be adequately rewarded. Secondly, it helps reduce turnover rates by improving job satisfaction and fostering a sense of inclusivity among staff members. Lastly, it improves accuracy and reduces the time managers and owners spend managing the tip distribution process. It is time to toss the spreadsheet and implement tip automation into your operation. 

If you would like more information about how Spark can help you please contact us!


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