As the adoption of iPad point-of-sale (POS) software continues to increase, it’s imperative for restaurant operators and their servers to understand the effects these systems have on tipping.
Restaurant professionals should be heavily invested in this information: Greater tips often lead to happier employees, which can facilitate improved customer service and experiences—which typically leads to happier customers who tip more frequently, and in greater amounts.
Software Advice surveyed patrons familiar with leaving tips via iPad POS software at food and beverage establishments to learn their preferences for using these systems to tip.
The data, along with expert commentary, will help restaurant operators and servers understand how to best leverage this technology to improve customer experiences and increase tips.
- Over 50 percent of respondents say using an iPad to leave a tip at food and beverage establishments is “not at all difficult.”
- A combined 41 percent say close proximity to the server/cashier while entering a tip amount would “probably” or “definitely” increase their likelihood to tip.
- Eighty-six percent of respondents with a preference prefer to use iPads to input tips themselves, rather than having the server/cashier do it for them.
- Thirty-five percent of female respondents would tip more if the server or cashier input the tip for them, compared to only 19 percent of male respondents.
- Twenty-nine percent of respondents say they would be more likely to leave a tip if required to press a “no tip” button to opt out of tipping.
Forbes predicts that mobile POS systems—particularly iPad POS technology offerings—are the future of restaurant POS software. These systems are helping to usher in a new dining experience: Servers, for example, can send orders to the kitchen or bar while continuing to interact with customers at their table, and complete payments in seconds from right where they stand.
Customers, meanwhile, can use these systems to select tip amounts in preset increments (e.g., 15, 20 or 25 percent) to leave on credit card payments, eliminating the need to do math or write out tip amounts on receipts.
The impact of iPad POS technology is two-fold. On the one hand, there are many operational benefits for restaurateurs: Servers can spend more time ensuring customers’ needs are met, and these systems can be programmed to upsell customers on additional items such as toppings, sides and drinks.
An improved customer experience often leads to greater tips, while upselling increases the average bill price, and thus can yield both increased revenue and larger tip amounts.
On the other hand, there are certain pressures these systems can inflict on customers, such as the effect of a server’s proximity on a customer who is selecting a tip amount, or having to select a “no tip” button to actively opt out of tipping.
While these nuances may be an inevitable byproduct of the digital age of payments we currently live in, they nonetheless can have a significant impact on customer tipping tendencies.
This report explores how iPad POS systems can enable key customer experience improvements; all of which directly or indirectly encourage greater tips. It also explores customer preferences for using this technology, which can help restaurant professionals maximize the benefits of using these systems.
To obtain the most accurate results, we filtered the survey responses collected to include only those who tip using iPad POS systems at least once per week.
Customers Split on Ease of Using iPad POS Systems to Tip
We first asked customers in our sample how difficult they find the process of leaving a tip using iPad POS interfaces. The results are almost an even split: 51 percent say it’s “not at all difficult.”
And although 50 percent experience some degree of difficulty tipping through iPad POS systems, the overwhelming majority of these respondents only find it “minimally difficult.” When taken with those respondents who find tipping on iPad POS systems “not at all difficult,” we see that a combined 89 percent of our sample experience little to no difficulty.
Difficulty Tipping With iPad POS Systems
Ben Harrison, senior vice president of brand/creative at software vendor POS Lavu, believes it’s important to minimize the difficulty of these systems so they’re easy for customers and servers alike to adopt and use.
“Having an intuitive, easy-to-learn customer-facing payment interface,” Harrison says, allows customers to pay and tip confidently—which is exactly what restaurant operators and servers want.
According to Cameron Lillico, senior marketing manager with software vendor TouchBistro, many respondents in our sample find these systems easy to use because the technology is “ubiquitous in everyone’s day-to-day life.”
However, this could also explain why 38 percent of respondents find the systems at least a little hard to use: many people are still unfamiliar with or new to iPads, and thus may have a harder time adapting to these systems. Still, Lillico believes these systems offer a quick, easy and efficient payment process.
Nir Eyal, author of “Hooked: How to Build Habit-Forming Products” and researcher on consumer behaviors, says that the ease of use iPad POS systems afford can also help consumers feel more comfortable spending money.
“Any time that money isn’t seen as money, you avoid the psychological problem called the ‘pain of paying,’ which has been studied by quite a few researchers,” Eyal explains. “The more cognizant we are of paying, the harder it becomes. And so when we make paying less obvious, I would assume [customers] would tip more frequently and in higher amounts.”
POS systems do make paying less obvious: Instead of leaving dollars on a table or tangibly writing out an amount on a receipt, customers can tip a predetermined amount simply by pressing a button that reads “20%,” for example.
The typical iPad POS interface shows these preset buttons in the middle of the screen. There’s usually a button underneath these that users must select if they don’t want to leave a tip (more on this later). There’s also usually a button that, when selected, allows users to type in a customized tip amount rather than the preset percentage or amount buttons.
Proximity of Server Increases Likelihood to Tip for 41%
Given that many respondents find it easy to use iPad POS systems to leave tips, we wanted to determine what other factors might affect their likelihood to do so. First, we asked whether the physical proximity of the server or cashier to the customer would affect the customer’s likelihood to leave a tip.
Effect of Nearby Server on Customer Likelihood to Tip
A combined 41 percent of respondents say that close proximity of the server or cashier would “definitely” or “probably increase” their likelihood to tip. Another 41 percent say the server’s proximity would have no impact, as they would leave a tip either way.
The fact that server proximity increases tipping likelihood is not surprising to Eyal. “There’s the social pressure of actually looking another person in the eye, and there’s the conformity pressure, as well,” he says.
This data is particularly interesting for sit-down restaurants. Unlike at a fast-food or counter-service restaurant, where customers pay at the register in close proximity to the server/cashier, servers typically leave the bill and walk away in a sit-down dining experience.
In establishments that use iPad POS systems, however, the server often remains with the customer through the gratuity to the signature. This at-the-table payment process innately allows the server to be in close proximity during the entire payment process.
Lillico points out that this proximity allows the server to walk the customer through the necessary steps, if necessary, or to simply make friendly small talk throughout the process. At the end of the day, he says, the server is responsible for the device, so their presence is expected.
Along these same lines, Lillico believes this at-the-table payment process enables servers to close the conversation with the customer so their dining experience ends positively.
“If tips are the most important thing to you as a server, because that’s where you’re getting the majority of your income, then obviously you’d want to be there at [the] point where that actually happens,” Lillico explains. “For you, it’s probably one of the most important points of the table service that you’re giving.
86% of Customers Prefer to Input Tips Themselves
We next wanted know whether customers prefer to input tips themselves or have their server/cashier do it for them. Most POS systems give cashiers the ability to flip the screen over to the customer after swiping their cards. The customer can then select a tip, sign and pick their desired form of receipt (email, text, printed or none).
“Using an iPad enclosure that rotates gives customers the option to easily input their own tip,” Harrison says. “This is a very unintrusive process, and has a ‘cool’ factor for customers. These types of enclosures make the process very simple for servers and cashiers.”
But not all transactions occur this way: Sometimes the server or cashier will input the tip themselves (based on the customer’s preference) before handing the iPad to the customer to sign. So, which is the preferred method?
Customer Preferences on Who Enters Tip
This practice is clearly undesirable to many: 86 percent of respondents who have a preference prefer to input tips themselves. To ensure a positive customer experience, servers and cashiers should thus offer patrons the ability to enter their own tips.
Digging deeper, we next asked respondents whether they would tip more, less or the same amount if the server entered their tip for them. In this scenario, 25 percent would tip more, 17 percent would tip less and 55 percent would tip about the same.
Even more interestingly, when broken down by gender, the data shows that women are nearly twice as likely as men to leave a higher tip when the server or cashier inputs it for them (35 percent versus 19 percent, respectively).
Tip Amount When Input by Server
Gender Breakdown: Tip Amount When Input by Server
Given this finding, servers and restaurant operators may be inclined to exclusively input tips for female customers. However, Eyal advises against servers entering tips at all. He believes it’s not worth it in the long run, as one bad experience may deter customers from returning.
“Customers are worth more than a one-time tip,” he explains. “It’s a lifetime value in relation to what the customer is worth to a business. On one hand, the server might receive a higher tip [if they input it themselves], but on the other hand, the customer might be less satisfied with the service.”
POS Lavu’s Harrison agrees. “Doing anything that makes your customers uncomfortable is a bad idea,” he says.
In other words, iPad POS technology should not be used simply to try and maximize tips, but to try and enhance the overall customer experience so patrons are more likely to return in the future.
‘Opt-Out’ Button Increases Likelihood to Tip for 29%
As mentioned, the tipping screen on most iPad POS systems typically comes after the payment is entered, but before the digital signature and receipt-selection screens. In other words, to complete the transaction, customers usually have to move past the tipping screen—and if they don’t want to leave a tip, they have to select a button that says “no tip.”
A February 2014 article from the San Francisco Gate claims that the “best way” to get tips is to “force customers to press a button if they don’t want to leave one.” To test this theory, we asked respondents if the presence of such an “opt-out” button would affect their likelihood to leave a tip:
Impact of Opt-Out Button on Customer Likelihood to Tip
A combined 29 percent of respondents say that this button would “definitely” or “probably increase” their chances of leaving a tip. For the majority of respondents, however (a combined 52 percent), this would have no effect.
Eyal (who is featured in the San Francisco Gate article) says one reason for the discrepancy between the article’s claim and our results may be that respondents underestimate the effects of an “opt-out” button. He believes that, despite what our respondents say, in reality, they would actually be more likely than not to tip in this scenario.
Regardless of the “opt-out” button’s effects, Harrison and Lillico both say that iPad POS systems are valuable for providing customers with easy-to-use buttons that visualize the recommended percentages of tips.
“Having easy-to-find ‘Quick Tip’ buttons helps increase the amount customers give servers,” Harrison says. “There may be an option to continue without tipping, but most customers will leave a tip once they see this screen.”
In fact, Harrison says that restaurants that set their default percentages to 18, 20 and 25 percent see higher tips than those restaurants that let their customers enter their own tips.
Lillico believes it is beneficial for customers to realize what dollar amount a certain percentage comes out to, compared to the fixed amount they might normally tip. For example, say a customer typically tips a quarter for their cup of coffee—until they use an iPad POS system, and see that a quarter is only a 5 percent tip. Lillico says that customers who have a revelation like this would likely be inclined to tip more.
Additionally, Lillico notes that an iPad POS tipping prompt removes the need for the server or cashier to ask the customer for a tip—thus eliminating any sense of entitlement that could be communicated to the customer through this ask.
Fast Casual/Casual Restaurants Ideal for iPad POS Tipping
Restaurant types run the gamut, so we next wanted to know which settings customers prefer to tip using iPad POS systems in.
Preferred Restaurant Type for Using iPad POS to Tip
Similarly to the findings from a previous Software Advice report on self-service POS systems, respondents strongly prefer to use this technology to tip at casual establishments (typically sit-down restaurants) and fast casual establishments (counter-service restaurants, such as Chipotle and Panera), indicated by 68 percent and 50 percent, respectively.
However, one restaurant segment that shouldn’t be overlooked is fine dining. Given that less than 50 percent of respondents prefer to tip using iPad POS systems at these establishments, is it worth it for such restaurant operators to consider adopting them?
Lillico believes so, as mobile POS systems bring additional benefits for the server beyond simply making tipping easier for customers. These benefits enable servers to improve customer experiences.
“In terms of fine dining, you can have a restaurant with hundreds of bottles of wine, and the server can turn the screen to the table and actually flip through [so the customer can see] what the bottle looks like and get a description of the wine,” Lillico explains. “Having all that information at their fingertips really allows for great service.”
Our findings indicate that, when using iPad POS systems, close proximity of the server or cashier as well as the use of an “opt-out” button can affect a customer’s likelihood to tip. Furthermore, 35 percent of female respondents say they’d likely tip more if the server input the tip, compared to just 19 percent of male respondents.
While it’s unclear from this report alone why females feel greater pressure than males in this scenario, all respondents clearly feel some type of pressure: 75 percent of customers using these systems, male and female alike, prefer to complete the tipping process themselves.
For restaurant operators and servers to truly maximize the benefits of iPad POS systems, it’s important to recognize that software is just one factor in a customer’s decision on how much to tip. Servers must take advantages of the benefits enabled by these systems to forge stronger relationships with patrons and provide greater overall service in order to make a real impact on the tip amount left.
As Lillico explains, “When the bill comes, [the customer] doesn’t just see a number at the bottom of the bill, they’re picturing your face helping them out and getting them everything they needed. It’s about customer experience and the service. That’s what people are tipping on.”
The detailed methodology for this report can be found here.
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