How is COVID-19 impacting tipping culture? | A Ready perspective
Having recently been featured in an article by the Globe & Mail about tipping culture in the time of COVID, we decided to put together a tipping Q&A from a contactless payments perspective. It's been an incredible time of transformation across the entire hospitality industry, but tipping was the area we hadn’t considered nearly as much as others. So we dove a little deeper.
How is technology helping restaurants during COVID?
Technology is helping from so many standpoints, but the one with the biggest impact is simply reducing physical touch points and additional workload for staff.
From a Ready perspective, our tech has allowed businesses to pivot to contactless menus, ordering and payments quickly - with some of our venues going live with contactless orders for takeout within 48 hours of mandates coming down. The speed at which technology can be implemented has been a significant factor in the survival of many hospitality venues and will continue to play a role in their success moving forward.
How has the dining experience itself changed since the start of COVID?
A lot has changed so quickly, COVID has absolutely accelerated the demise of cash and kiosks – both freestanding ordering kiosks and at the table tablets, as well as payment terminals. We’ve now seen a much faster rise in what we call ‘Connected Dining’. The ability for guests to connect directly to the restaurant to view the menu, order, pay and tip all on their own device.
BYOD technologies have been around for several years, just waiting for their time and within a few short months they've been catapulted into the mainstream thanks to the pandemic.
Has tech improved tipping in general?
It’s certainly streamlined the process and removed any awkwardness traditional tipping could create (e.g. server watching over you). It’s also enabled us through our post payment reviews to provide direct guest feedback should a tip have been lower than usual. As we all know, a low tip might not be an indicator of subpar service at all. It could be anything from the toughness of a steak to how loud the music was, with traditional tips its incredibly hard to know.
These reviews have been an incredibly powerful tool for our clients who can enact service recovery then and there, or improve business operations based on the feedback provided longer term if themes emerge.
Are restaurants finding higher tipping where technology is implemented?
Since the beginning of Ready the one consistent stat we’ve seen is that server tips have been from 7 up to 15% higher than with traditional payments. Guests appreciate having the control over their orders and payments – as well as the time it saves.
Now more than ever before, providing the guest options and the power to choose contactless payment is becoming the cost of entry - an operating essential instead of a nice to have.
Are restaurants finding lower tipping amounts with higher unemployment rates?
We can only speak for payments processed through Ready, but overwhelmingly, no. Which we’ve found surprising and really heartening. There are of course many factors at play when it comes to tipping as well as altered levels of service but what we’ve found is the average tip is 18% across the board.
People want to support local restaurants and we can only assume that if they’ve set money aside to eat out when things might be a little stretched at home financially, they still ensure the restaurant or server is tipped appropriately. Which of course has been encouraging to see as it’s been a trying time for everyone.
Is there a difference between tipping for takeout vs. dining in?
There’s been a general theme of incredible gratitude for those still operating local restaurants, as such we’ve been people tipping above the 10% mark for takeout as well as more than one instance where the discount offered on the food has been matched by the tip. So, not ‘above average’ but several examples that feel more like a gesture in kind.
Has COVID impacted tipping culture?
Almost certainly it has impacted cash tipping, which is likely one of the reasons why restaurants are so urgently seeking alternatives through technology that don’t put a burden on their guests or place their staff at risk.
Card payments are great, but making it contactless, secure and convenient – using things like Apple Pay, Google Pay, PayPal and Venmo are key, especially as these become more ubiquitous.
In general, how much should customers be tipping?
Commensurate to the service provided of course, but also bearing in mind the challenges restaurants and service staff are facing. It may have been a different experience to what you’re used to, but a good litmus test is “did the venue work hard to make you feel safe and welcome?” If so, tip accordingly.
What will be the new normal for tipping in the post-COVID world?
Word within the industry is largely that the new trends we are seeing and focus on removing touch points aren’t going anywhere. Cash tips are dead. Payments and tips requiring the physical exchange of a credit card, pen or a payment kiosk will also diminish rapidly over time.
A post-COVID world won’t look the same as before, but this presents an opportunity for us to reimagine the dining experience, something we’re working tirelessly with our partners to do in both the short and the long term.
Read the excellent article or more perspectives on what will be a dramatic shift in restaurant tipping culture industry wide.