Question:
We have a new POS setup and the default on the tip buttons is 18%, 20%, 25% or of course people can leave whatever they want. My staff is pushing for me to change the buttons to 20%, 22%, 25% since they say that most people just mindlessly hit the middle button. I want to support them, but will this alienate guests?
– Owner, Café Concept
Answer:
One of the many challenges of restaurant management is being in the middle of so many competing interests and needing to satisfy them all. Guests, employees, investors, suppliers, the community and others are all pulling for your attention and favor. Inevitably, what satisfies one constituency, in this case your staff, may have negative repercussions that hurt another, such as your guests. To be sure, there has been tipping inflation or “tipflation,” where tips that used to seem acceptable (15%) are now seen as sub-par and what used to be considered a good tip (20%) is now seen as the expectation. I think your default numbers reflect that upwards trend.
You raise a good concern: will making the lowest default 20% alienate or frustrate guests who would prefer to tip less and have to make extra efforts to do so? Does it send a message that you are bilking them? If not, this could be a win/win where your staff earns more, you are more likely to retain and motivate them, and guests are satisfied. There are a number of factors that may go into how this change could be perceived by your guests: your location, concept, competitors, and the quality of your offerings, especially the quality of your service.
To test out this proposition, I’d suggest conducting a small short-term experiment. First, benchmark your proposed settings against other operations in your area to be sure they are in the ballpark. Next, try to change the defaults on just one of your devices or all devices for a short time such as a week or two. Track customer feedback, tips, and revenue compared to another period. Be clear with your staff that you will try it out but might revert to the original default if your experiment is unsuccessful.
Importantly, remember that no consumer behavior strategy will work without your core competencies in place: excellent food and hospitality. More on tipping structures here.