Tipping has always been an option to show appreciation for good service. If you run a business with tipped employees, you can set up your credit card machine to encourage tips that reward your employees. The way you present the tip prompt, when it appears in the payment process, and how it’s worded or displayed can all have an impact on the amount your customers choose to tip. In this post, I’ll explain how your credit card machine’s setup impacts tipping behavior and give insights into optimizing your process to encourage tips.
Customer-Facing vs. Employee-Facing Machines
One of the biggest factors that influences tips is whether your credit card machine faces your customer or faces your employee. These setup options impact customer comfort during the tipping process, and generally speaking, customer-facing machines lead to better tips.Customer-Facing Machines
Credit card machines or POS system screens that face your customer allow them to enter their tip amount themselves. When customers can input their tip without a cashier or server looking over their shoulder, they feel more comfortable tipping. Additionally, customer-facing terminals often let you determine pre-set tipping options. Many customers will simply choose one of the options rather than entering a custom tip. You can use this tendency to go for the quick pre-set option to your advantage by listing appropriate tipping ranges for your industry.Employee-Facing Machines
By contrast, employee-facing machines require the employee to take the card from the customer and ask about adding a tip. Many customers find that awkward and, depending on how the question is asked, may even decline to tip. There’s less time for the customer to think about their tip, so even if they do tip, it may be lower than they would have been prompted by pre-set amounts on a customer-facing terminal. If you have a choice, the customer-facing machine is likely to boost your tips, so it’s worth considering if you’re in an industry that relies on tips to supplement staff income. Not interested in a dedicated customer-facing screen? You can go for a “best of both worlds” approach by using a swivel screen POS system that allows your staff to conduct the transaction but spin the screen to face the customer when it comes time to select a tip.Default Tip Choices
I mentioned that customer-facing screens can often be programmed with default tip choices. Many terminals offer this functionality, allowing you to list a few pre-set options. This is usually available either as percentages or dollar amounts. In general, percentages are best for higher value transactions, while flat dollar amounts are good for small transactions, such as coffee shops, where a percentage would be a very small amount. Default tip options increase the likelihood of tipping in some situations, by making it an expected part of the transaction process. Additionally, the preset amounts eliminate the need for customers to do the math, instead turning the tipping decision into a choice between a few options and a quick button press. There’s some indication that when presented with three tip options, many customers will choose the middle option. It’s a good idea to set the options at a reasonable tipping range for your industry. Customers may resent percentages or dollar amounts that feel too high and your staff may resent artificially low default tip amounts. If you include default tip options, be sure there’s always an option for no tip. Even though you hope customers won’t choose that, you’ll want to let them have the option to tip or not according to their own experience. Additionally, it’s important to give an option to leave a custom tip. Some customers may want to adjust based on their personal perception of the quality of service they received.When in the Checkout Process to Prompt for Tip
The timing of your prompt for a tip can also affect customer behavior. The ideal timing is before the transaction is finalized but after the sale amount has been shown. To most customers, that feels like a natural step - they’ve seen the price of their order, they have the option to add a tip, and then they will see the entire total and finalize the transaction. Asking too early, such as before services are rendered, can be off-putting to customers.Design
Keep your tip prompt screen uncluttered and direct. Don’t add too many pre-set tipping options and keep the ones you do have in a logical sequence, increasing from smallest to largest. Customers faced with too many choices, or choices in a confusing sequence, are more likely to skip the tip.Should you ask for tips?
Of course, this advice all assumes you’re in an industry where tipping is standard or expected. However, some customers report that businesses which have traditionally not asked for tips have begun to do so. It’s important to be aware of a phenomenon called tip fatigue. Tip fatigue is when customers are constantly prompted to tip and may start to feel weary of it or annoyed by it. Be careful about enabling tip prompts in industries that aren’t commonly known for tipping, such as retail stores. Just because your credit card machine allows it doesn’t mean it’s always the best idea. If you're in a non-service business, consider carefully whether a tip prompt is truly appropriate and if it enhances or detracts from your customer experience. If tips are appropriate for your industry or business, your credit card machine is more than just a way to process payments. It’s a silent influencer on customer behavior, especially when it comes to tipping. The setup of your payment process and tip prompts affect whether your customers tip, and how much. If your business relies on tips, it’s important to optimize tipping to make it easy for customers. Be sure to check your credit card machine for the option to add suggested tip amounts and set up the prompt at the right time in your checkout process.
Ben Dwyer began his career in the processing industry in 2003 on the sales floor for a Connecticut‐based processor. As he learned more about the inner‐workings of the industry, rampant unethical practices, and lack of assistance available to businesses, he cut ties with his employer and started a blog where he could post accurate information about credit card processing. As the blog gained in popularity, Ben began directly assisting merchants in their search for a processor. Ben believes in empowering businesses by providing access to fair, competitive pricing, accurate information, and continued support. His dedication to transparency and education has made CardFellow a staunch small business advocate in the credit card processing industry.
