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How to Use Mobile Payments to Raise Your Tips

For most goods and services, the price is the price — end of story.

Though in some industries, gratuity is incredibly important. In fact, voluntary tips represent the bulk of what some service providers receive.

Take waiters and waitresses, for example. The average base salary for this group is $5.01/hour, which is well below minimum wage. Yet, a successful restaurant server can make a very comfortable living thanks to tips.

As a business owner, those tips may not affect you directly, but remember that there’s a direct correlation between worker satisfaction and customer satisfaction. If your employees are dependent on gratuity, it’s a good idea to increase the frequency and amount of tipping within your business.

How do you accomplish this when moving from traditional POS solutions to smart devices?

Let's take a look.

Leveraging Mobile Payments to Boost Tipping

People tend to spend more freely when using non-cash payment options. This is precisely why:

  • Casinos use chips.
  • Carnivals use tickets.
  • Restaurants use credit cards.

Cash substitutes create distance between the benefits received and the pain of paying. This price insensitivity bodes well for tipping — but only if you set your mobile payment environment up the right way.

Below are some “tips” to get you started.

Automatic Gratuity Fields

The most important step involves including a “tipping line” with all mobile payment screens or printed receipts. Having this extra field encourages customers to take that next crucial step – i.e., leaving gratuity.

This may seem obvious, but you'd be surprised how many businesses don't implement this step.

Suggested Tip Amounts

This strategy is even more powerful: Instead of including an extra blank field, all of your mobile payment screens or receipts come with suggested tipping amounts. This is the same tactic many charities use to boost donations — and it works for one simple reason:

You’re no longer asking the customer if he or she wants to tip — yes/no. You're asking him or her to decide between leaving 10 percent, 15 percent or 20 percent. Note that the customer can still leave nothing — but doing so requires far more effort.

This strategy works so well that it has helped increase gratuities for services you don’t normally associate with tipping. Many ice cream shops across the country now use this “guilt tipping” technique — often with remarkable success.

The Human Touch

Some tip-dependent businesses already use the above strategies with their existing POS payment options, but when you take the process mobile, there's one final benefit. Plus it's mostly automatic, meaning you don't have to do anything special.

Let’s revisit that restaurant example to understand how this benefit works:

With traditional POS credit card payments, the server isn't around when the diner decides what (if anything) to leave as gratuity. The customer signs the receipt in relative privacy.

Not so with mobile payments.

The server remains tableside until the entire transaction goes through — including the tip.

Again, customers are under no obligation to leave anything at all; but having the server right there makes it more difficult to justify not tipping.

Of course, this tactic works best when the service is already top notch. However, as 20 percent tips become more common in your business, the service quality will likely improve.

More Tips for Raising Tips?

To accept mobile POS payments for your business contact our payment team today for a free consultation.

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Topics: Mobile Payments, Payment Technology, Small Business Tips

Welcome to the BluePay Blog!

Whether you're a small business, an enterprise corporation, a financial institution, or a software partner, we have created a series of blog posts to help you and your customers, learn more about the complex nature of payments. Take a look to learn how payments can help to simplify your business operation, and may even help to grow your revenue.

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