Many servers have to tip out the kitchen, host/hostess, busser, or other positions with their tips they receive based on a percentage of either their sales or percentage of their tips depending on the restaurant. Many servers earn far less than a standard minimum wage as their hourly pay but then make up the additional money through tips. However, if their shift is slow they can easily earn less than the current federal minimum wage of $7.25, according to Business 2 Community. There is some concern that taking away tips from the servers will demotivate them from doing the same quality of service, although most industries do not receive tips and are still expected to do the same quality of job for their hourly wage. On the other hand, offering a livable hourly wage might make it easier for servers to budget if they know exactly what will be their walk away pay at the end of their shift before it even starts.

There are many angles to look at with this trend and many different opinions that are held. Many consumers will likely not be happy if menu prices are raised a possible 15 to 20 percent to make up the hourly wage so the restaurant can pay their wait staff a decent wage. Others may be happy to be done with the stress of figuring out the appropriate gratuity at the end of a meal. Some restaurant industry veterans disagree with the idea of customer-dependent salary. They believe that instead of every table being a mini HR department that the servers’ performance should be evaluated and rewarded solely by the restaurant’s manager, according to The Washington Post.

Time Inc. Network posted that the first chain to try no tipping is Joe’s Crab Shack at 18 of their 131 locations. Joe’s Crab Shack has raised their prices between 12-15 percent to make up the difference between, for example, a $2.25 per hour wage to the new $14 per hour. Restaurants that have been adopting the no tipping policy have either added a service charge or added a percentage to their menu price.

As more no tip restaurants open and as more current restaurants change their policies customers can decide where to spend their money. For now it is uncertain if this trend will catch on with all restaurants and become the new standard. There might be some restaurants near you that may be changing their tipping policy, or maybe you already adapted the new no tipping policy at your establishment. Will Americans adopt the same no-tipping policy as many other countries around the world?  Only time will tell. Stay tuned or maybe check out a restaurant that has adopted the new no tipping trend!

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While those questions still linger today, consumers have been hit with a whole new thing to think about:  the use of the iPad POS system with the smart tipping option.

There is some debate as to whether or not this tool is consumer-friendly, server-friendly, or maybe some combination of both.  Servers seem to benefit from the technology because “customers are willing to leave higher tips…because paying on an iPad makes the exchange of money less obvious,” according to researchers.  And there is the fact that the server may be lingering, hovering close-by to assist with the iPad payment process.  While this may seem like a win-win for the employee and the customer (and it probably is a benefit to both parties), some will argue that the consumer is somewhat “guilted” into leaving a higher tip amount because their server is on the lookout.  Others, though, will argue that the server being close by to answer questions leaves a final good impression on the diner, compelling them to leave more money as a gratuity.

And technology makes it easier than ever for customers who aren’t sure the amount to leave by using preset suggestions for gratuities.  On screen, the iPad will likely ask for confirmation of payment, a signature, and a tip amount.  Here is the plus…and it’s a big one!  Gone are those days of having to do math in your head, or trying to figure out what percent you want to give, or arguing with yourself that, “if I give five dollars is that enough of a percentage?”  The only thing that consumers need to do is push a button.

Before you go squabbling about “what if the amount I want to give isn’t on the screen?” let me just tell you that most iPad POS systems have an option to input a personalized amount, or even to opt out of leaving a gratuity altogether.  However, the iPad does not allow a customer to bypass the tip screen; you can’t move on to sign the receipt until you have selected from the menu of options.

And it is here that the benefits to the server become extremely evident.  Customers have an option, yes, but it is a fact that nearly 41% of consumers say that they will leave a larger tip if their server is close by. With the use of iPad POS, the server will be close by, to assist you if necessary.  Their tip is elevated, however slightly.   When given the option to tip 15%, 20%, or even 30-40%, and also to choose a number at will, most consumers will opt to push a single button—likely 15% if service was average, but, wait, there is the server, available to answer all your questions and help you through the process.  And 20% is not that much more out of your pocketbook, and this service at the tail end of your dining experience is leaving you with a good impression of your overall meal…pushing the 20% button isn’t all that much of a stretch.  Done.  Server wins, and you didn’t have to fret too terribly much while making the decision.  You never had to count out an additional couple of dollars from your wallet.  Or think about anything at all. The iPad did it all for you.

So while we may still have to ponder over whether or not we should tip on our carryout items, one thing is becoming clear:  whatever we decide can be done with just the single push of a button.

Have you used the iPad POS system during a night out for dinner?  Tell us about the tipping options and how it affected your choices when choosing a gratuity.

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Restaurants may continue to suggest gratuities for large parties, but in order to distinguish between a tip and a service charge the payments “must be made free from compulsion” by customers.  The new rules mean that guaranteed tips essentially vanish when a server waits on a large party.  But does this automatically mean that the server is making less money?  Interestingly, A Good Egg Dining Group out of the Oklahoma City area says not necessarily.  The company kept track “for three months to see how it was actually affecting the servers,” and overall discovery was that they ended up making more without the automatic gratuity.  While there were some situations where the server received less than when the tip was added to the total bill, on average they earned more tip money from the larger parties.

A Good Egg is happily complying with the new law, but there are other restaurants who feel put out by it.  Implementation requires employers to keep track of these tips given to their wait staff, and then manage the money that would normally be cashed out on a day-to-day basis.  They must then ensure that the server receives the gratuity when the pay period rolls around.  Another option is to simply abolish the automatic gratuity policy and take the chance that their wait staff may not be compensated for their efforts.  One restaurant owner feels that the IRS changes aren’t sensitive to the “inherent operations and labor conditions of the industry” and that “the IRS’ broader objective should be to make sure people are paying taxes on their income” without having to micromanage how restaurants work.

Whether you agree or disagree with the new rules, though, is irrelevant.  Full enforcement began January 1, 2014, and the IRS plans to crack down on the gratuity income of servers in 2015.

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