How Suggested Gratuity Can Increase Tips

In the restaurant business your employees can become like a second family. You want to see your waitstaff excel in their positions and that means maximizing the revenue they bring in from tips. However, many types of customers can come between your employees and their 15 to 20 percent, including: drunk customers who forget to tip, customers from overseas who aren’t familiar with tipping customs in the U.S., cheap customers who will tip as little as they feel they can get away with, split check where no one remembers their servers, and more. Yet your employees depend on their tips to make a living. According to Consumer Reports, the federal minimum wage for tipped employees (or workers who make at least $30 monthly in tips) has stagnated at $2.13 per hour. This wage has remained the same since 1991, when it was equal to 50 percent of a regular wage, then $4.25. Minimum wage today is close to $9 an hour, depending on your state. 

If your servers don’t make enough in tips to cover the difference between their hourly rate and minimum wage, it’s your job as a businessowner to come out of pocket to ensure your staff is making enough to make a living. And nobody wants that. So, let’s take a look at how you can use suggested gratuities to increase tips for your waitstaff. 

Reduce Customer Confusion and Anxiety Around What to Tip

Although it’s tempting to get mad at diners who don’t fulfill the social contract of tipping in restaurants, many of the prime offenders when it comes to tipping sincerely don’t know any better. Visitors from other countries, for instance, may not be familiar with tipping customs in the U.S. Others are bad at math and may be too embarrassed to whip out a calculator in front of their dining companions. CNBC suggests that tips between 15 percent to 20 percent pretax are expected. However, although 18 percent is the median “normal” tip amount within the U.S., tipping expectations are different at quick serve dining establishments or at partial self-service diners. Figuring out where a restaurant falls on the spectrum can put unnecessary pressure on diners and servers alike

Because it’s so easy to get tipping all wrong, do your customers a favor by giving them the option to choose a suggested gratuity at checkout––thus reducing concerns about whether they did the math correctly, or how much of a tip is standard at your type of establishment. The less customers have to worry about coming up with the right amount for gratuity, the more they can focus on enjoying their meal at your restaurant. 

Show Servers You Care about Their Hourly Wage

Few customers still pay in cash. In fact, Payment Depot reports that 75 percent of consumers use their debit or credit cards when dining out at a restaurant. This presents an opportunity for you to show your waitstaff you care by adding investing in a POS system that offers suggested gratuity as an option at checkout. You can do this by adding suggested gratuity to your touchpad POS system if customers walk up to the register to pay their bill. Or, if you operate a more formal dining establishment, you can add suggested gratuity percentages to the paper check that’s brought to the table. 

Your tipped wage employees will appreciate that you’ve gone the extra mile to help them make a good hourly wage. Ensuring customers tip your employees competitively may help increase employee satisfaction and reduce turnover––quite the feat in the restaurant industry, which CNBC reports faces 130 percent employee turnover a year.

Tiered Tip Suggestions Let Customers Feel Generous

Nobody wants to be told exactly what to tip at checkout, so it’s a good idea to give your customers a few options that they can choose from based on their opinion of the overall service. A good jumping off point is: 15 percent 18 percent 20 percent 25 percent and “other,” which allows customers to write in the exact dollar amount they want to tip. Most customers will tip between 18 percent and 20 percent nowadays, and some will even add a few dollars in cash if they receive additional service, such as packing up their meal, giving them a good museum recommendation, bringing them an after-dinner mint or toothpicks, or the like. While this may not seem like a lot at first glance, two dollars an hour in cash equates to $18 per nine-hour workday and $90 at the end of a five-day workweek, and this extra cash can have a big impact on your servers’ financial autonomy over time. 

Use a POS system that splits the suggested gratuity when your customers split the bill and, if you serve alcohol, be sure that the suggested gratuity is in a bold and legible (not aggressive) font.  The Cheesecake Factory was actually sued a few years back for not splitting the gratuity on shared bills, so it’s important that your POS system does the math correctly. 

Bringing It All Together 

Caring about whether your servers are tipped fairly is one of the first steps towards ensuring your restaurant provides a great dining experience for customers and a wonderful working environment for your waitstaff. Show employees you care by adding suggested gratuities to your customer’s bills. When your staff makes as much take-home cash as possible, you’ll never have to foot the difference and it will work wonders for improving employee morale and turnover.