finance

Tipping point: the apps that make rewarding good service easier and fairer


Restaurant tips are going completely digital as the pandemic accelerates the shift towards a cashless society, prompting a debate about how best to reward hospitality staff for the service.

The number of transactions made in hard currency fell by more than a third in 2020, a report found this week, with 13.7 million people living an entirely cashless life, double the number who did so in 2019.

The change also presents a problem for workers who rely heavily on gratuities. More than one in 10 Britons say they are keener than ever to tip now that hospitality has reopened, according to a survey commissioned by workplace management platform Planday, which found people in Sheffield were most likely to leave a little extra with about half of customers tipping, compared with just 29% of Nottingham residents at the bottom of the scale.

But the money may not end up where customers expect. Last month, it emerged that Pizza Express had cut the share of tips taken by waiting staff, sharing the money with typically better-paid kitchen staff.

Companies such as Tip Pot, TiPJAR and Easy Tip claim the solution lies in cashless systems.

“There’s been a stigma attached to tipping in the past and I don’t think UK hospitality pre-pandemic has always carried itself in glory with tipping structures,” said Tip Pot founder Adam Pritchard. “But there are more and more people who are less likely to carry cash but do want to leave a tip.”

Businesses – not just in hospitality but in areas such as hairdressing or taxi services – pay a subscription fee to use its app. The company takes no commission but Stripe, the payments provider that supports its systems, does. If you tip £5, Stripe gets 27p.

All staff can be given viewing access to the tips account, ensuring employers who skim off the top would be caught in the act.

Tip Pot’s model collectivises gratuities, although that approach has not been universally welcomed. At Pizza Express, some waiting staff felt that the chefs were already paid enough and that it was front-of-house staff who needed the extra.

Visitors to BrewDog bars can use TiPJAR, a slightly different system founded by James Brown, the managing director of the Scottish craft brewers’ bars division.

BrewDog has faced criticism recently, amid allegations from former employees of a “toxic” workplace culture. But TiPJAR appears to have gone down well with staff.

Customers of BrewDog and chains such as Honest Burgers and Le Pain Quotidien scan a QR code to reward their server, who can withdraw the cash at any time.

TiPJAR takes a 4% commission on tips – which come in at an average £4.60 – but customers are given the option to make up the shortfall. More than 98% do and tipping has soared since hospitality reopened, the company said.

“We wanted it to be as fast as getting out your wallet,” said the chief executive, Ben Thomas, who claims tipping this way can take as little as four seconds.

Where staff prefer a collectivised approach, TiPJAR makes a physical terminal that drinkers can tap with a contactless card. Staff can see the bar’s tipping account and check they’re not being short-changed.

Its rival, EasyTip, also uses QR codes, printed on customer receipts, but takes a 2.9% transaction fee, as well as allowing customers to leave feedback for the staff member of venue. “It allows staff to regain their earning power,” said its founder, Evgeniy Chuikov.

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The new systems are designed to be improvements on the tronc, a tip distribution method that derives its name from the alms boxes found in French churches. Troncs – in which a committee of staff members decide how tips are allocated – have been open to misuse by employers which exert control over how the money is divided rather than properly gauging the wishes of staff.

However, the trade union Unite remains sceptical about the rise of tipping apps.

“While we support any progressive attempt to make tipping easier, apps […] are not the answer,” said Bryan Simpson, industrial organiser for the union’s hospitality division.

“We need the government to honour the promise it gave in 2016 for tips to be made fairer by introducing legislation which ensures 100% of gratuities remain with workers. You can have the best tipping app in the world, but nothing could replace a tronc committee which is genuinely democratic, accountable and representative of the entire workforce, reinforced by legislation,” he added.



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