Should you ask customers for tips?

Recently, tipping has become a hotly debated topic online. Some people believe that so-called “tipping culture” has gotten out of hand and are taking to social media to complain. Customers say they’ve been prompted by POS systems to tip at places they’ve never tipped before, such as convenience stores, supermarkets, coffee shops, car washes, and ecommerce stores. One woman even claims her mortgage company has been asking for tips. 

Although some customers may resent being asked to leave a tip, gratuities can help supplement your employees’ wages, making you a more competitive employer. If you’re a solopreneur, asking for tips puts more money directly in your pocket. However, is collecting tips worth the risk of turning off some of your customers and leaving a bad taste in their mouth? Here are some of the pros and cons of asking customers for tips to help guide you in making a decision. 

Pros and Cons of Asking Customers for Tips 

Customers May Resent the Social Pressure of Being Asked for a Tip

Before modern POS systems were widely adopted, coffee shops and counter service restaurants would place a tip jar on the counter for customers who wanted to leave a gratuity. Now digital POS systems prompt customers to provide a tip. This forces them to publicly opt out of tipping. Everyone around the customer (including the cashier and other patrons) can see which tipping option they choose and judge their generosity. As a result, customers feel more pressure to tip at businesses that use touch screen POS systems.

Although asking for gratuities on a digital POS system generates more tips, it can leave customers with a bad taste in their mouth. Customers who didn’t plan to leave a tip may feel resentful that they were asked for one in a public way. And patrons who can’t afford to leave a gratuity may feel guilty they opted out. 

If your customers have this type of negative interaction in the checkout line, they may be less likely to return to your store or restaurant. So if you’re worried about customer loyalty and retention, it may be best to stick to more private receipt-based tipping or a physical tip jar. 

Gratuities Put More Money in Your Employees’ Pockets 

On the plus side, asking for tips on a digital POS system may put more money in your employees’ pockets, or your own if you’re a solopreneur. Since customers are more likely to leave a gratuity when prompted, asking for tips will help you generate more money to pass on to your employees. 

Paying your employees more tips may increase employee retention. After all, workers who are happy with their income are more likely to stick around. Distributing tips to your workers allows you to pay them more without increasing your labor costs. Many businesses have even started mentioning the possibility of tips in job ads to attract employees. So opting into tipping culture could help you attract and retain top talent. 

Customers May Not Like Automatic Gratuity 

Automatic gratuity is often applied at restaurants when there are several guests at a table. Sometimes coffee shops may use automatic gratuity as well when particularly large orders are placed. However, research has shown that customers generally don’t like automatic gratuity even if they were happy with the service. 

Customers appreciate being able to choose their own tip amounts so they can reward servers for good service. When the service is poor, customers resent being forced to tip more than they believe the server deserves. 

As a business owner, you want to ensure your servers and baristas are compensated fairly. However, customers may be less likely to come back to a restaurant that applies automatic gratuity, which is something to consider when creating your tipping policy. 

Don’t Expect Tips 

At the end of the day, tips are bonuses, so you shouldn’t rely on them. Don’t price your products and services with the expectation that you’ll receive gratuities, even if you’re a solopreneur in an industry where tipping is the norm, such as hairdressing or housekeeping. As a freelance writer, I sometimes receive bonuses from clients as a thank you, especially around Christmas. But I never expect or ask for bonuses and price my services high enough to meet my income expectations and needs. 

If you decide to use a digital POS system to ask customers for tips, remember to keep the suggested gratuities realistic and provide a clear way to opt out. You don’t want to annoy your customers with confusing buttons and inflated suggested tip amounts. 

It’s also worth thinking twice about collecting tips if you run a convenience store or other business that hasn’t historically asked for them. As you can see on social media, some customers are annoyed that they’ve been asked to tip on purchases that don’t require much preparation.

Although you and your employees work hard and deserve to be compensated, you may alienate certain customers if your POS system asks for a tip on the sale of a bottle of water or other low prep item. In that case, it may be better to raise your prices across the board instead of asking customers for tips. 

Do you ask for tips from your customers? How do you collect them (tip jar, POS, etc.)? Share your thoughts on tipping in the comments below! 

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