When you own a bar or restaurant, implementing a POS can streamline your service, and expedite the process of billing and collecting payment from customers. However, because your staff may need to predict how much gratuity they can reasonably anticipate, it’s important that all business owners know the impact that a POS can have on tips. Here’s a look at the factors that motivate customers to leave a gratuity, and how POS systems may impact the tips your staff members receive.
Happier employees lead to happier (and more generous) customers. Tipping expert and Cornell University professor Michael Lynn writes that behavioral scientists think customers tip for all kinds of reasons—including a desire to help the employees who serve them, to reward a positive experience, to buy future service, and in some cases to fulfill their own social esteem. Though the psychology behind why, when and how much customers tip can be complex, the basic premise of gratuity is simple. It’s a monetary means the customer can use to thank an employee for making them feel appreciated and positive about their experience.
Employee happiness is impacted by a variety of factors, including your business culture, engagement in the job and opportunities to advance in the organization. But some studies indicate that giving employees operational support and capabilities like a POS can be a key ingredient that leads to job satisfaction. When employees are equipped with the tools they need to do their jobs confidently and effectively, they’re more likely to feel successful. Not only will their positive attitude be apparent to customers (who may in turn feel motivated to tip them for providing a positive experience), your business model as a whole could benefit. As Jack in The Box CEO Linda A. Lang once told the Society of Human Resource Professionals, the fast food chain noticed, “restaurants with happier employees had happier guests and higher sales and profits.”
POS systems streamline the tip process. POS system providers differ in how the option to tip is presented to the customer. Some may allow you to choose whether you want to give the customer the option of a range of tip percentages, to present a flat tip amount based on the payment due, or that prompts the customers to customize their tip amount. Regardless of which tip format you incorporate into your POS, customers are more likely to respond to suggestions that eliminate the amount of effort and thought they must invest into the tip process.
People spend more when they don’t have to monitor their cash. A POS system gives customers control over how they want to pay, which may include cash, a gift card, credit card or debit card. Studies repeatedly confirm that people spend more freely when they use a form of payment other than cash. When customers have the ability to choose how they want to tip, they aren’t forced to choose based on an amount in their checking account, their wallet or to choose if they can afford to tip at all (based on their other expenses).
Records of tips can increase gratuity likelihood. Lynn found that customers are especially motivated to tip bartenders and servers, compared to housekeepers and bellhops. He writes that part of the likelihood to tip the former is primarily driven by customers’ collective desire to help servers, reward good service and fulfill social obligations—especially if they expect to return to your business. When customers pay using a POS system, they may have a greater sense that their past purchases (and tip history) could be retained in their customer profile (regardless of whether it is in reality). As Lynn notes in his research, this sense of social obligation to service staff can act as a form of motivation in tipping behaviors.
Today’s customers are accustomed to having a choice—in where they spend, how they pay and whether they’ll tip. Though a POS doesn’t force the customer to leave a gratuity, it adds one more form of payment convenience that customers (and your service employees) will likely appreciate.
Kristen Gramigna is Chief Marketing Officer for BluePay, a credit card processing firm. Follow her on Twitter at @BluePay_CMO.
