Industry Trends Archives - Page 2 of 4

SITCA: How to Navigate the IRS’s New Tip Reporting Program

Posted on March 7, 2023March 7, 2023 by kickfinadmin

Three things in life are certain: death, taxes, and confusing updates from the IRS.

This year, the IRS has rolled out a new tip reporting program that should help restaurant owners use technology to stay in compliance with tax laws — once we’re all on the same page as to how it works. Here’s a quick rundown of the new program and what it means for employers.

How do employers typically handle taxes on tips?

Most of the burden of tip reporting falls on the employee. They’re responsible for keeping a daily record of tips, reporting tips to their employers, and reporting their tips on their tax returns. And while tips aren’t wages, employers do still have a hand in reporting tips and withholding taxes.

Did you know that even though tips aren’t wages, you still have to pay your share of income taxes on them? That’s why it’s so important to accurately report employees’ tips and keep meticulous records.

In the past employers have had a few options for how to track and report tips:

Tip Rate Determination Agreement (TRDA)
Tip Reporting Alternative Commitment (TRAC)
Employer-designed TRAC (EmTRAC)

All of these programs require employers to educate their employees on the importance of properly reporting both cash and credit card tips — with some minor differences regarding how tips are reported to the IRS.

One key thing to note: the TRDA does not use actual tip revenue to determine tax liability. Instead, employees are expected to report tips at or above an estimated tip rate that is determined by the IRS. If reported tips fall below the established rate, the employer is expected to provide detailed documentation of employees’ names, social security numbers, hours worked, sales, tips reported, and job titles.

The TRAC and EmTRAC programs do not establish a tip rate, but they do require employers to take on the responsibility of ensuring their employees report their tips. No matter which tip-reporting program you choose, they all generally entail lots of paperwork and vague language — but that might change in the near future.

What is SITCA?

Under the new IRS proposal, a new tip reporting program called the Service Industry Tip Compliance Agreement (SITCA) would allow employers to take advantage of their point-of-sale systems and other restaurant tech in order to report their employees’ tips. The IRS created SITCA in order to replace the outdated TRDA, TRAC, and EmTRAC tip reporting programs.

Most diners are paying with credit cards or digital payment methods these days — so the transaction data is right at your fingertips. And rather than take an educated guess at your average tip rate, the IRS will use actual tip data pulled from your POS to determine tax liability for both employees and employers. They can also easily pull employees’ hours worked and sales information to ensure tips are being properly reported.

This move by the IRS should relieve some of the tax reporting burdens and save time for employers by getting rid of the endless forms and paperwork that were previously necessary for tip reporting.

What about cash tips?

As always, employees are required to report their cash tips — which of course can’t be backed up by POS data. The onus is still on the employee to accurately report all tips. If the IRS notices major discrepancies between sales and tips (especially missing cash tips), the employee could be audited.

What do restaurant owners need to know for the 2023 tax season?

For now, you don’t need to overhaul your tax practices. You will remain in your current tip reporting program until one of the following occurs:

Your restaurant is accepted into the SITCA program
The IRS finds you noncompliant with your current TRDA, TRAC, or EmTRAC program
The end of the first full calendar year after the final revenue procedure is published in the Internal Revenue Bulletin

That being said, you should start looking to ensure that your restaurant has everything it needs to succeed under SITCA. Ask yourself: Do you have a POS system that you trust? Do you use a digital tipping solution? With the right technology, your restaurant’s tip reporting and tax liability should run smoother than ever before.

Interested in the SITCA program? Follow these instructions by May 7, 2023 to enroll.

Hot Tips & Takes: Restaurant Accounting Tips from MarginEdge

Posted on January 31, 2023February 13, 2023 by kickfinadmin

How can restaurant operators use tech to stay on top of their accounting? Ask Kevin and Eric.

At Kickfin, we know the right technology helps restaurants run more efficiently — and makes operators’ jobs easier. But if you know, you know: restaurant accounting can be a beast. So we connected with MarginEdge’s Kevin O’Nell (SVP of Payments and Partnerships) and Eric Jeffay (Senior Partnership Manager) to talk about the specific accounting challenges restaurant owners face, and how tech is solving them.

What makes restaurant accounting different from other businesses?

Kevin O’Nell: I think two things stand out when it comes to accounting at a high level. First, most restaurants are structured on 4-5-4 accounting, which is unique from other small businesses and not necessarily supported in QuickBooks Desktop as well as restaurant owners would like it to be.

The second thing: A lot of owners own multiple locations, so they probably run accounting across those locations. Perhaps those locations have different ownership groups, so then when they report out earnings and dividends, they have to account for that as well.

What are some common accounting mistakes restaurant owners make?

Kevin O’Nell: The mistakes someone would make are not unique to the restaurant industry. For example — any growing entrepreneur will see accounting become more and more important as you grow and become profitable.

Sometimes, in the beginning, it’s not always the highest priority. Surely building a business, hiring the right people, putting the right processes in place, and growing sales matters, but as an organization expands and as there are more stakeholders, then all of a sudden accounting really matters.

Many people start off with their accountant as themselves, their spouse, or someone in their family. But at some point, outsourcing or hiring a professional becomes an important piece of growing their business.

Eric Jeffay: Restaurant owners very often are not traditional business people. They don’t have offices and desks, and it’s easy to fall behind on your data entry when you’re doing accounting as a restaurant operator. So they should be aware that accounting is not something that happens on the last day of the period —and certainly not at the end of the year. That’s not the time to do your data entry.

And it’s a fairly common mistake to think accounting is not a daily process. But at the end of the day, somebody has to do the data entry on a somewhat daily basis, whether it’s a software or the restaurant operator themselves.

How does tipping play into restaurant accounting?

Eric Jeffay: I’m sure you guys know this at Kickfin — but tips are liabilities, not assets. It’s important to make sure you have those funds set aside. You’re not realizing those funds, or if you are, you have to be really careful you do pay those out in full. It’s really the same as sales tax. It’s not your money.

How can tech ease the burden of accounting?

Kevin O’Nell: No one wants to have to stay and do accounting either at two o’clock in the morning after a restaurant closes or all day on Sunday morning instead of spending time with their family.

With technology like MarginEdge, QuickBooks, and Kickfin, we are allowing restaurant owners to easily digitize those transactions and that information in a way that just wasn’t possible five or 10 years ago. And so all of the paper processing that you would have done now is in a digital format that saves people tons and tons of time.

Eric Jeffay: I think Kevin is spot on. You just have to realize a lot of accounting reporting is not meant to be actionable on a day-to-day basis or a week-to-week basis. Tech can really translate a lot of those like end-of-period reports into more flash reporting where you can get more actionable data, so you’re not waiting until the 15th of the month to figure out what happened the previous month or period.

“Tech can really translate a lot of those like end-of-period reports into more flash reporting where you can get more actionable data, so you’re not waiting until the 15th of the month to figure out what happened the previous month or period.”

Are restaurants automating their accounting?

Kevin O’Nell: The main way restaurants are automating their accounting is in the data entry. You used to manually enter that data, but now there are a number of tools, including MarginEdge, that do it automatically.

For one, we’re seeing that automation is moving sales from their point of sale system into accounting software. You’re also seeing it in payroll – which is a large expense for restaurants – it can now be pulled into your accounting software on nearly a real-time basis. And, of course, receivables (like food and other orders) can be pulled into their accounting software digitally as well.

Eric Jeffay: Yes and all that data entry is super important. I also want to mention one thing — there’s absolutely a role for an accountant. Tech helps to speed up an accountant’s work to get you more actionable insights faster and to make it more efficient, but there’s 100% still a need for the accountant. Tech is a tool in their belt, but it’s not nearly at the level of replacement.

“Tech helps to speed up an accountant’s work to get you more actionable insights faster and to make it more efficient, but there’s 100% still a need for the accountant. Tech is a tool in their belt…”

What are the advantages of outsourcing your accounting?

Eric Jeffay: The advantage of outsourcing your accounting, especially if you’re a smaller restaurant or a small group of restaurants, is that you need the economy of scale to have an in-house staff accountant that you can afford to pay. So if you are smaller, if you’re growing, if you’re in an early stage, then it’s really much more cost-effective to outsource your accounting. But there are disadvantages to that. Oftentimes, I think when you outsource, you fit into that accountant’s processes and their workflow.

As you grow, the advantage to keeping your accounting in-house is you have more autonomy over accounting. That speeds up your reporting very often, and you can better customize your accounting reporting and your accounting processes if you are doing it in-house. You probably have more flexibility on what your period structure is, what your chart of account structure is, what type of flash reporting you get, and what type of tech you use.

I would also say — obviously all restaurants strive for profitability, but they do so to varying degrees and varying levels. So there are operators who have more of an economic focus on their businesses compared to others, and you probably want to shore up your weaknesses.

If you’re a chef-owner who maybe doesn’t have experience in business school – which, quite frankly, that was me – you would want to shore up by having a really strong accountant. Then you might say, “I’m going to outsource my accounting because I’m not an expert on it.” If you can’t manage an accountant or a team of accountants onsite, it might make more sense to go with experts from the outside who are going to manage themselves.

What accounting advice would you give to new restaurant owners?

Eric Jeffay: Operators often view accounting as almost a dirty word, but accounting can be a really positive thing. It’s much better to know what’s happening in terms of building a sustainable business, taking care of your staff, and making sure you’re efficient with your resources. There’s a real upside to having good accounting practices.

The other thing I would say is to get an early start on it. Make sure that you spend time on setting up systems, setting up software, and setting up processes early on that will help sustain you because it’s really easy.

Accounting is not the focus of restaurant owners and it shouldn’t be, but you should be able to have the processes on the back burner. That way you can focus on what’s happening in your dining room, what’s happening in your kitchen, and what’s happening with your marketing — the things that are sexier and more fun to spend your time on.

I think that’s where we get back into the discussion of tech being helpful. There are a lot of great programs that can make your life so much easier and more efficient by setting a lot of those things on autopilot for you.

Kevin O’Nell: When set up correctly, accounting can be a tool that allows you to spend more time with your customers and know when you’re making a dollar or losing a dollar. Set up incorrectly, it can be a complete blind spot, so it’s completely worth the time to do upfront.

Hot Tips & Takes: How Independent Pizza Restaurants Are Using Tech to Take on Big Chains in 2023

Posted on January 30, 2023January 30, 2023 by kickfinadmin

How are pizza restaurant operators adapting to new technology and taking their businesses to new heights? Ask Steve Green.

If you haven’t seen this year’s Pizza Power Report, you’re in for a surprise. Independent pizza restaurants experienced explosive growth, outpacing their big-chain competitors. We sat down with Steve Green, founder and publisher of PMQ magazine, to talk about the reasons behind independents’ success last year — and how they’ll continue to take off in 2023 with the help of new tech.

Can you define an independent pizza brand and how they differ from a larger chain?

People always ask that and I used to be somewhat uncomfortable with the answer until I just went along with the crowd. According to the companies that do a lot of this research, independent pizza restaurants mean you have fewer than 10 locations. Once you hit 10 stores in a restaurant group, you can define that as a chain.

What kind of challenges are pizza restaurants facing? And how are independents addressing them differently than larger chains?

Labor is the biggest challenge, and of course, adopting technology is a challenge. But there are great solutions coming up, like the evolution of local RDS companies popping up — think: local DoorDash or GrubHub. One way to address the labor problem is by outsourcing delivery to these services.

I’m a former Domino’s franchisee, and it was pretty easy to just follow the program. But problem-solving as an independent is a really tough job. The thing is, 60% of all pizzerias in the US are owned by an independent, so that’s where most of the people are. Independents have been doing things out of an instinct to survive, so that’s where you see most of the creativity and action.

“…Problem-solving as an independent is a really tough job.”

There’s no question about it — things have really changed. Domino’s said they were a technology company eight years ago, and they’ve made it so competitive that our whole industry has become a technology business. I’m pretty optimistic about the independents’ chances, though. I’m surprised by how adaptable they’ve been, and they’ve benefited from the army of technology companies like Kickfin that are helping solve problems. It‘s a great time to be an independent.

Do you believe independents are using tech more creatively than the bigger chains?

Yes, definitely. We’ve been following Andrew Simmons, owner of Mama Ramona’s in Ramona California, and I just love this guy. In the last three months, he’s made a commitment to showing the pizza industry how technology can really make a difference. He decided not to hire any more staff than his current 18 employees, and yet he’s on his way to doubling sales.

He’s introducing robotics, including robotic vacuum cleaners and a Picnic robotic pizza maker. He also switched from a legacy POS system to something that allows more online ordering and automation. He’s tearing down walls, remodeling his kitchen, and ordering a new Hot Rocks pizza oven. And of course, he’s outsourcing labor. His whole idea is that he can reduce the cost of making pizza and let his customers know that they’re getting real value and more pizza for their money. He’s going for the gold, living the dream.

How else can independents keep up with rising food and labor costs without alienating their customers?

I’ve seen a lot of people reminding their customers that they’re an independent pizza restaurant. They care about pizza as more than just a commodity but a part of their community. Independents have an obligation to play the personality card, use showmanship and authenticity that a chain can’t offer in their communications and social media. They need to remind customers that they aren’t choosing to raise the price but that prices are rising from the roots.

“I’ve heard more positive stories than negative ones about customers accepting price increases for pizza that they feel is above average and special.”

How can independents stay competitive in the labor market?

I know that a lot of independents already pay more than a bigger chain would, but how do they do it? It takes a bit of creativity.

When I had a Domino’s franchise in Marin County California – the richest county in California during the ‘80s – it was hard to find drivers (and when you did some of them would be driving BMWs). After we were up and running, I ended up spending my marketing dollars on hiring efforts instead of, you know, telling people about how great Domino’s was. I cut radio ads, I did box topping, I did door hanging, and if I was still in it today, I would be using social media.

My message was that we’re a fun place to work and could use some help. Then I’d introduce you to a driver to tell you what she likes about working at this Domino’s — that she likes to drive and listen to the radio and that it’s about more than the money. This strategy might be something that independents can get away with more so than a chain could these days.

In spite of rising costs and labor shortages, how did independent pizza restaurants manage to grow so much in 2022? Do you expect the trend to continue in 2023?

Yeah, it’s interesting. Most of the time it’s the chains that have the muscle to keep growing. The pizza industry is a mature industry in that there’s always growth.

One theory is that the number of new businesses that opened in 2022 outpaced the number of businesses that went under, giving the appearance that independents grew much more. It could be regrowth from the destruction we saw in the past three years of business. But I’ve also heard a number of people say that maybe the independents weren’t necessarily growing extra fast but that the chains are looking at the risky environment and opting not to grow as aggressively.

On the other hand, you always have new people who want to get into the pizza business who bring new enthusiasm to the industry. It’s like a volcano, always bubbling up with hot, new ideas. And you end up with a steady stream of people coming in to make better pizza and offer a better pizza experience.

Are there any specific trends we should expect this year from both independent and chain pizza restaurants?

That’s always the big question. It’s probably going to be working with less on the labor side and leaning into automation. But it’ll also be creating an experience that seems like it’s not automation — keeping the humanity while also becoming more efficient.

On the consumer side, great pizza at a fair price will just never get old. When you look at the bottom line, that’s always what’s driven the industry.

Do you have any advice for pizza restaurant owners?

Stay on top of new technology. We’re definitely following this closely in our PMQ Think Tank, which is our online community where people in the pizza industry can ask each other questions. We’ve got 15 years of wisdom and information from our users, and it’s a great place to go when you’re just getting started in the industry.

Also, subscribe to PMQ magazine. It’s not written by us as experts but by our readers who are really connected to the industry. We spy on them through our Think Tank, we talk to them, and we do stories about them. And of course, our editor inserts some wisdom from his interviews with people in the industry. We put a lot of effort into it to show what’s really going on in pizza.

Guide to California Tipping Laws

Posted on January 23, 2023January 23, 2023 by Mike Rowan

We’re obviously pro-tipping around here — but even more so, we’re pro-tip-regulation-compliance. With each state having their own unique laws regarding tip pools and minimum wages, it can get confusing.

For our California restaurant owners, we took a deep dive into your specific tipping regulations that you might not know about. Take a look at how California tip pooling laws differ from federal regulations and how you can stay on the up-and-up.

What is Tip Pooling?

Tip pooling is when employees who receive tips collect and share their tips with other members of their team. For example, servers can put their tips into a collective “pool” and then divide them among cooks, dishwashers, bussers, bartenders, etc. This practice promotes team spirit and collaboration among staff, as they all rely upon each other for success.

California Tip Pooling Laws Explained

The Fair Labor Standards Act (FLSA) allows employers to require non-exempt employees (i.e., those eligible for overtime pay) to participate in tip pools, provided that employers follow strict regulations.

California takes it a step further to protect employees’ earnings. Here are a few key differences to pay attention to:

Tip Pooling for FOH Staff Only

Tips must only be shared among front-of-house staff such as servers, bartenders, bussers, and hosts. Back-of-house staff like cooks and dishwashers cannot be included in the pool unless they provide direct table service (so your expo can still earn their share of tips).

Making Tip Pools Fair

While California does not ban mandatory tip pools, the law requires that pooled tips be distributed in a “fair and reasonable” manner. You must set a formula to determine tip distribution — and it’s up to the California DOL Standards Enforcement to determine what’s fair on a case-by-case basis.

Say Goodbye to the Tip Credit

Whether you pool tips or not, this is one to pay attention to. California’s legislation no longer makes a distinction between tipped and non-tipped workers — so there is also no tipped minimum wage. Restaurant owners cannot claim a “tip credit” and must pay their servers the full minimum wage of $15.50.

California Allows “Double Tipping”

In California, mandatory service charges do not count as tips, but they can count as wages. The employer has a right to keep service charges and distribute them as they see fit — so they can distribute them to servers if they choose. Often called “double tipping,” this allows the server to earn money from both a mandatory service charge and any tips that customers leave voluntarily.

In this case, the service fees paid to employees can count toward minimum wage and overtime pay, but employers are required to withhold payroll taxes when distributing service charges to employees.

What’s at Stake?

California’s DOL Standards Enforcement takes wage theft and illegal tip pooling seriously. Penalties for breaking any state tipping regulations include fines of up to $1,000, paying full restitution to harmed employees, and even 60 days in jail.

Knowing both state and federal tipping laws protects you and your employees from improper tip pooling practices and potential lawsuits. As always, consult with a lawyer to ensure that you’re in compliance with all federal, state, and local ordinances.

Looking for a partner that will help you comply with California’s tipping regulations? Kickfin’s digital tipping platform puts up guardrails to prevent improper tipping practices — and our digital tipping software is pretty cool, too. Request a demo of Kickfin today.

How to Comply with Tipping Laws in Texas

Posted on January 19, 2023January 19, 2023 by Mike Rowan

Like many other Texas restaurant owners, you were probably shocked when a Dallas barbecue joint was ordered to pay their employees nearly $900,000 in stolen tips and overtime. It may have even sparked a bit of anxiety about your own tipping policies and practices.

Illegal and unethical tipping practices not only decimate your restaurant financially, but can also tank your reputation. Avoid losing your business and the community’s trust by freshening up on Texas tipping laws.

Who Can Participate in Tip Pools?

In Texas, mandatory tip pools are perfectly legal, so long as you follow the guidelines laid out by the Fair Labor Standards Act (FLSA).

For one, only employees who “customarily and regularly receive tips”— namely servers, bartenders, hosts, and expos — can participate in a tip pool, and back-of-house employees cannot.

Owners, managers and supervisors are also barred from participating in tip pools. Tips belong expressly to the tipped employee, so an owner cannot take a cut of the tip pool, and neither can their agents in the form of managers. If you’re caught distributing tips to owners or managers, it will be considered wage theft, and you will be ordered to pay back the tips and subject to hefty fines by the DOL.

Learn to Properly Calculate the Tip Credit

The tip credit allows employers to pay tipped employees a lower hourly wage, with the idea that the server will earn at least minimum wage or more in tips. In Texas, employers can take up to $5.12 per hour in tip credit. But if used incorrectly, you could end up owing your employees back pay.

In order to take the tip credit, your employee’s hourly wages must be greater than or equal to the minimum wage for their hours worked — at least $7.25 per hour in Texas. Employees also must earn more than $30 per month in tips for the tip credit to apply.

And head’s up — the tip credit can still apply when your employees are earning overtime. Ensure that you’re properly compensating employees when their work hours exceed 40 per week.

Using the tip credit requires a good bit of math (especially when overtime is involved), and there’s room for human error in your calculations. Check out our primer on calculating the tip credit and then go double-check your math.

How to Protect Your Business & Employees

You don’t want to jip your employees — nor do you want to risk your entire business. Now that you’re more familiar with Texas tipping laws, here are a few ways you can comply with them.

Hire an Attorney

It’s best practice to consult with a lawyer with any legal questions. An attorney can give you detailed, personalized advice about what’s best for your business and how to stay on the right side of the law.

Choose Vendors that Protect You

At Kickfin, we partner with restaurants to revolutionize everything about their gratuity management systems — including setting up guardrails to comply with tipping laws. Request a demo of Kickfin today.

What You Need to Know About Florida Tip Laws

Posted on January 19, 2023January 19, 2023 by kickfinadmin

Filled with tourist destinations and great weather, Florida is the perfect place for restaurants to thrive — as long as they can comply with tipping regulations. Like many other states, Florida has unique state tipping laws that are often in flux.

Whether you own a seafood shack right on the beach or a fine-dining spot in a Miami hotel, you need to know the ins and outs of Florida’s tipping laws.

Is Tip Pooling Legal in Florida?

Many restaurants implement tip pooling systems to create equitable pay for servers and foster a collaborative work environment, but laws around tip pools can get fuzzy state-by-state.

Florida restaurant owners can breathe a sigh of relief, though — Florida’s tip pooling laws align with the federal regulations laid out by the Fair Labor Standards Act (FLSA).

Florida’s Minimum Wage & Tip Credit

Florida joins the majority of states in allowing employers to take the tip credit — but not quite as much as other states. Federal rules set the minimum wage at $7.25 per hour and allow employers to take up to $5.12 in tip credit.

At the time of publication, Florida’s minimum wage is $11 per hour, significantly higher than the federal minimum wage. On top of an increased minimum wage, Florida only allows employers to take a tip credit of $3.02 per hour. With these regulations in place, Florida restaurant owners must pay tipped employees at least $7.98 per hour.

But head’s up — the minimum wage is increasing. As of September 30, 2023, Florida’s minimum wage will increase to $12.00 per hour, and will continue increasing each year until it reaches $15.00 per hour in 2026. Looking ahead, restaurant owners can expect to pay a tipped minimum wage of $11.98 per hour.

Mandatory Service Charges Are Wages in Florida

If you’re charging a mandatory service fee for large parties or to reserve a table, you might hope that will count as a tip for your service staff.

Mandatory service charges are not considered tips in Florida, but rather are the property of the employer. The employer may choose to distribute the service charge to an employee, but these would count as wages and would be subject to payroll tax withholdings.

That being said, Florida has not joined other states in requiring employers to make it clear to customers that mandatory service charges are not considered tips.

Tip laws can get tricky, so always consult a lawyer when changing tip policy.

At Kickfin, we want to help restaurants comply with tipping regulations and save you time and energy. We put up guardrails that prevent improper tipping practices and make it easy to instantly tip out your staff. Request a demo to see for yourself.

How to Enable Tipping at Quick Service Restaurants Without Alienating Your Customers

Posted on December 20, 2022January 11, 2023 by Kaley Pigman

Unless you’ve completely sworn off social media at the moment — and if that’s the case, no one would blame you! — you’ve probably heard some chatter around the new tipping model at Starbucks.

Long story short: Everyone has an opinion.

Some customers (and employees) feel that they’re being put in an awkward position because a tip isn’t warranted when there’s minimal guest-employee interaction. But others are grateful for the opportunity to give a small show of thanks for stretched-thin service providers. Plus, those tips can make a meaningful impact on employees’ take-home pay.

We’d venture to guess that this little firestorm isn’t just about Starbucks, but part of a much more layered conversation about tipping practices in general: how they’ve evolved in our digital age, and especially how they’re being embraced (or not…) by quick-service restaurants.

Real talk: Here at Kickfin, it’s no secret that we’re a pro-tipping team. We believe whole-heartedly that service industry employees make the world go round, and that tipping often increases their earning potential far beyond what revenue constraints would allow their employers to pay them. And of course, tipping can benefit employers, too.

But we can’t forget about the guest experience. Ultimately, tipping is voluntary and should always, always be at the discretion of the customer.

While QSRs are wise to keep pace with the times and digitize their tip jars: read on for a few best practices that will ensure your guests embrace the change (no pun intended…) and continue to think of tipping as an option, not a requirement.

But first: Is “Guilt Tipping” Real?

It happens every day: You place your order at the counter, the cashier turns the iPad around, and you’ve got to choose to leave a 20, 25 or 30% tip for the staff. (It seems like those percentages just keep climbing, right?)

Does a 30-second interaction necessitate a tip? Maybe, maybe not — but you find yourself frantically hitting a button because you don’t want to be the jerk who didn’t leave a tip.

There’s a name for that: guilt tipping. No one wants to short-change a service industry worker, and many of us even see tipping as some kind of barometer for morality.

Since tipping has expanded into new areas, there isn’t really a set custom for the “appropriate” amount to tip. Is it 20%, like you would at an FSR? Is it less? This uncertainty often leads people to panic-click on the most reasonable option on the screen out of guilt. Whether real or imagined, feelings of guilt around tipping can lead to major backlash from customers — and displaced anger at employees.

How to make QSR tips work for everyone

The truth is, most employees enjoy the wage boost that tips provide, and customers want to reward good service, even when they don’t have cash on hand. However, the benefits of credit card tips can be overshadowed by the awkward social customs around tipping. That’s why enabling credit card tips requires a bit of finesse.

Here are a few suggestions for enabling tipping without offending customers.

1. Change tip amounts

Rather than prompting customers to tip based on percentage, think of your credit card tips as a digital tip jar. Make the tip suggestions similar to what people would toss into a tip jar — like 75 cents, a dollar, or even just rounding up to the next dollar. Customers won’t feel the whiplash of their coffee order suddenly costing $3 more than it used to, but they still get the option to reward baristas for good service.

2. Avoid verbal tipping prompts

Nothing is more awkward – for employees and customers alike – than asking for a tip out loud. Employees don’t want to pressure their customers into leaving a tip, and no one wants to confidently say “no” in front of a line of people. Some customers may also feel uncomfortable stating how much they’d like to leave — as if they’re announcing how “good” of a person they are.

Instead, keep the tip prompts as private as possible. Include the prompts on the POS or credit card reader so your customers can silently decide on their tip amount.

3. Make it clear that tipping is optional

In the United States, most customers at FSRs are aware that servers rely on tips to supplement their take-home pay — and that they should tip appropriately for their service. But at a QSR, the lines get a little blurry. Is leaving a tip now an expectation (or even a requirement) for counter service?

Take the pressure off the customer, and leave no questions unanswered. Make it apparent that employees are paid hourly and that tips are just an optional bonus to their income, not their bread and butter.

You can also include language in your tip prompts that explicitly reminds customers that tips are optional. That way when the iPad swivels around to the customer, they know it’s not a moral question but rather just an extra thank-you to their regular barista.

Take digital tipping to the next level

Of course, now that you’re accepting more credit card tips, you’ll need an easy way to distribute them to staff. And we’ve got a few ideas. With Kickfin, you can instantly transfer tips straight to your employees’ bank accounts — meaning no cash runs and more financial freedom for employees. Request a demo of Kickfin today to learn more.

What’s Driving Hotel Technology Trends? Key Insights from HT-Next

Posted on December 19, 2022December 19, 2022 by kickfinadmin

Kickfin recently sponsored and attended HT-Next, a premiere hotel technology conference. Over four days in Miami, Kickfin co-founders Justin Roberts and Brian Hassan met with hospitality industry leaders, tech innovators, and top hotel operators to learn about key goals and concerns for 2023. Here are some of the key takeaways from the event.

Renewed Focus on Sustainability

Grant Romundt, co-founder of Ocean Builders, spoke to an industry trend that’s been building for a while (and isn’t slowing down): sustainability. Now more than ever, guests want to patronize businesses that share their core values and beliefs. Specifically, they’re choosing hotels based on how much those brands are doing to protect the environment, especially in beautiful, tropical locations.

Ocean Builders is aiming to do just that by building high-tech eco-restorative floating homes that provide guests with a one-of-a-kind experience while also preserving the ecosystem to serve guests for generations to come.

Expanding the Guest Experience

The hospitality experience you create isn’t limited to the four walls of your hotel. Instead, it extends to every aspect of your guest’s stay, including the activities they do while they’re away from the hotel. With that in mind, HT-Next partnered with Mobi to explore the possibilities of hyper-personalized guest experiences built by AI.

AI now offers you the opportunity to build the perfect trip for each individual guest. Using guest data and your knowledge of the area around your hotel, you can build AIs that will plan a personalized suggested itinerary for your guests, taking hospitality to the next level.

Bouncing Back from Covid

Most of us might feel like things are “back to normal,” but some hotels are still feeling the strain of the Covid-19 pandemic. And they’re turning to tech to bring them back to life.

A panel of Miami hotel general managers shared how they stayed afloat during the height of the pandemic, how the travel and hospitality industries are bouncing back, and how tech has quickly become a huge part of their daily operations.

Solving Labor Shortage Concerns

Labor continues to be a point of contention in hospitality. Questions about how to attract new hires and how to retain the employees you have continue to vex hoteliers in this tight labor market. The answer isn’t as simple as raising wages (although that doesn’t hurt). Instead, industry leaders are looking to technology to help create better work environments and more streamlined processes to get things done, even at sub-optimal staffing levels.

At Kickfin, our goal is to provide hotel staff with more opportunities to earn tips through digital tipping software — allowing for guests to tip more often in an increasingly cashless society. We also simplify the tip payment process so employees have access to their earnings faster (a major selling point for potential hires).

Our main takeaway: Hotel technology isn’t going anywhere. Expect to see more automated hotel operations, better uses of guest data, and sky-high guest experience expectations.

Hotel Trends: 5 Reasons Why Cashless Tipping is the “Next Big Thing”

Posted on November 28, 2022November 29, 2022 by kickfinadmin

BY JUSTIN ROBERTS, CO-CEO, KICKFIN

These days, hotels are leveraging technology across almost every aspect of their operations.

But when it comes to gratuity management, many hospitality teams continue to rely on the same-old analog (and arduous) tip payment processes they’ve used in decades past.

In an increasingly digital world, sticking with a status-quo, cash-based tipping program is a missed opportunity to increase tip volumes, delight your guests, and weed out operational inefficiencies. That’s why the most innovative, forward-thinking hospitality brands are digitizing their tipping programs from end-to-end — that is, from tip acceptance to tip payout — for both their hotel staff and their food and beverage employees.

If enabling instant, cashless tip payments isn’t already on your radar for 2023: here are 5 reasons why it should be — plus, what to look for when selecting a digital tipping solution.

Cashless tipping increases take-home pay for employees.

Fewer consumers are carrying cash today than ever before. That’s a major problem for guest-facing hotel employees, whose tips frequently make up a significant portion of their take-home pay. Without an alternative way to accept tips, your bellhops, valet drivers and concierges might find themselves empty-handed even after providing excellent service — simply because consumers no longer have cash in their wallets.

Making it possible for guests to send instant, cashless tips right from their phones ensures that your employees are consistently rewarded for a job well done, whether or not your guests are carrying cash.

What’s more: A robust digital tipping solution will allow you to automatically calculate, pool and distribute tips, giving more of your employees the opportunity to become tip eligible and increase their earning potential.

2. Guests want a better tipping experience.

Employees aren’t the only ones who get frustrated when they miss out on tips. Most hotel guests have, at one point or another, experienced that moment of panic when they’re face-to-face with a more-than-deserving service provider…but they’re not carrying the right bills (or any bills at all).

Giving guests the ability to send instant, cashless tips directly from their phone is just the kind of intentional, elevated touch that takes hotels to the next level.

Ideally, a digital tipping solution will go “beyond a QR code;” while QR codes are a fast and easy way to launch a digital tipping program, guest adoption can be low. Consider seeking out a digital tipping solution that offers automated, on-brand text “prompts;” at a high level, this technology sends a branded, personalized text message to guests after a service is completed — e.g., housekeeping — and gives guests the option to simply click a link and instantly send a tip from their phone.

3. You’ll have a single “source of truth” for hotel and F&B employees.

Tracking and reporting tip payments when you’re managing both hotel and F&B employees is complicated at best. Digital tipping software can give you the power to manage all tip payments, for all types of employees — in one unified platform.

Think of it as your tip payment command center. When you integrate your digital tipping software with your POS, PMS and payroll systems, you get complete visibility into every tip payment — whether it came in through your restaurant POS, or it was a mobile tip sent from your guests to your hotel staff. You can also ensure that every tip is distributed accurately, efficiently, and in compliance with ever-changing tipping regulations.

Plus, you can track every tip payment by individual employee, by shift, by location, or by payroll period, which makes for easy, error-free reporting.

4. Employees are demanding more control over how they’re paid.

In a competitive labor market, hospitality employers are feeling the pressure to constantly increase wages or offer gimmicks — e.g., hiring bonuses — to recruit workers.

But for the modern hospitality workforce, it’s not just how much they’re earning that matters — it’s also how they’re getting paid.

Digital tipping solutions give operators the flexibility to offer multi-channel tip payouts, meaning you can give your employees options as to where and when they will receive their tip earnings.

For example: While many F&B employees might choose to have their tips paid out instantly and directly to their existing bank account, unbanked employees might prefer to receive tips on payroll or even a paycard. A digital tipping solution makes it possible to let your employees choose, without making the process more complicated for you.

5. Going digital can keep you compliant.

Rules and regulations around tipping are complex, to put it lightly. They often vary from one state or even city to the next, and it seems they’re constantly in flux. An increasing number of hospitality employers have been caught in costly legal battles because they (sometimes unknowingly) violated labor and employment laws related to tipping.

Digitizing the tipping process can help you adhere to those laws consistently across your organization, even if your locations span multiple cities or states. Plus, you’ll have an accurate, detailed history of all tip payments, which can prevent tip disputes and trust issues with your team before they escalate into something more problematic.

Cashless tipping: the final frontier

Hotel operators have long understood the operational benefits of digitizing and automating what they can. Until recently, digital tipping wasn’t on the table — but new technology has changed the game. Now, it isn’t a matter of if, but when, hotels will make the switch.

For operators who are exploring solutions, be sure to seek out a software that is:

Truly end-to-end, from tip acceptance to calculation to payout.
Highly scalable across your organization.
Fully integrated with your existing tech stack for automated user management and tax compliance.
Easy to implement.

There’s never been a better time to hit the reset button on your tipping program. The right solution will allow you to create an exceptional tipping experience for your guests and your employees, while delivering measurable results to your business.

To learn more about digital tipping for hotels, contact justin@kickfin.com.

[Video] How Industry Partners are Using Technology to Make Brewery Owners’ Lives Easier w/ CBP

Posted on September 13, 2022November 10, 2022 by Kaley Pigman

The craft brewing industry is tight-knit, and the community relies on each other for best practices, vendor recommendations, and camaraderie—especially on social media. Thanks to groups like Craft Brew Professionals (CBP), brewery owners can connect to share successes, rant, or ask honest questions about how to better run their businesses.

CBP also opens the dialogue for suppliers, tech companies and other industry leaders to discuss important topics facing breweries. Kickfin co-founder Justin Roberts joined the Craft Brew Professionals Panel to get into all things tech—and why the craft brew industry is still quite analog. The panel included CBP Host Andrew Copolon, PK Agriwal of Beer30, Dan Hornbrook of BrewLogix, Ian Purcell of BarTrack, and Ian McHarg of Country Malt Group.

Brewery visitors are seeking new experiences and digital capabilities.

Much like other service-oriented businesses, brewery owners are noticing that customers want a lot more out of their visit than an extra-hoppy IPA. Dan’s work with BrewLogix gives him lots of insight into brewery customers’ expectations.

According to Dan, “People are looking for more than just products; they’re looking for experiences.” He went on to explain how his website, BreweryDB, helps beer consumers find the right brewery for every occasion. “If you’re searching for a date night with live music or you want to make sure they have a kid-friendly menu, you can look that up and use filters to take a dive deep into the breweries before visiting.”

Part of the brewery experience is also talking to knowledgeable bartenders. Believe it or not, tech can improve your bartenders’ performance and average check size. Justin noted, “One unique evolution that we’ve seen around digital tipping is that it’s finally putting valuable data in the hands of the operator to then empower staff. They’re all there to make money and have fun, but why not show those employees the true reward of giving great service through tip transparency?”

Andrew added, “One of my favorite metrics is tip percentage because if Dan’s behind the bar and he’s consistently getting tipped 16% but Justin’s getting 26%, Justin’s obviously engaging at a higher level.”

“Customers are looking for a higher pace of knowledge at a brewery compared to a craft beer bar, so how can breweries leverage that?” asked Andrew. “It’s about educating staff on the product so they can talk about it more effectively. In the end, hopefully they’re getting more tips and ringing in more beers. Technology really can give staff a bigger arsenal to get more tips and add more money to their pockets.”

Customers are mainly paying with cards or digitally these days and will soon expect digital capabilities with nearly every service experience, including at breweries. CBP’s Andrew Copolan asked Justin if he expects cash to be phased out in the near future.

“There will always be people that literally want to remain unbanked and pay in cash,” said Justin. “However, more people are on Zelle than ever before, and most younger people are paying digitally. People aren’t even writing checks to pay their bills anymore. As we inch toward over 98% of transactions being cashless in the next five years, I would assume that basically everything would be digital.“

Breweries are behind the learning curve.

Beer is one of the oldest industries in the world. For centuries, brewers have been refining their crafts and inventing new processes and types of beer. In such an old-world industry, it may not be surprising that technological innovation is lacking.

“I noticed when I went to breweries that used popular software systems, they would still have a binder full of paper logs, whiteboards, and spreadsheets,” said PK. “I quickly realized that there wasn’t an industry standard when it came to brewery data tracking.”

Dan agreed, “People are still shaking kegs to find out what’s inside of them, which is pretty wild that that’s still the standard practice to know how much beer is left in a keg. We have a great product that helps solve that and saw the opportunity to get some real-time data to people’s hands.”

To drive home the point, Ian from CMG added, “People put bulk malt into silos, and to check the levels, they knock on the silo with a rock or a stick. We thought, why not put automatic sensors in there to tell us when it’s time to place a new order. Or, what if we created an app where customers get prompted to order the same product they ordered last year. Again, we just want to make people’s lives easier.”

Customer feedback is a goldmine.

The panelists all shared their appreciation for customer feedback and how it shapes their business decisions. PK said, “I always tell our clients not to worry about hurting my feelings, I need to know what they hate the most about what we’re doing because that feedback is actually gold to us. It allows us to grow as a company and identify where we can improve ourselves.”

Feedback also empowers them to take a closer look at which services and features really wow their customers so they can improve even further. Dan explained, “It’s really cool to have those moments of realignment and choose to put more time and effort into building out a feature that customers really want. As leaders of our organizations, we have to be humble enough to do things not because we think it’s right but because it’s what the customer wants. It’s not easy, but ultimately, that will guide you in the right direction.”

Of course, tech-minded companies are using social media to get real, honest feedback from their consumers, which they can turn into improved products and features. “Thanks to groups like CBP, everybody can be very vocal about what’s causing them headaches,” said Ian (CMG). “Social media, for all of its challenges, has offered a platform where we can hear what the most people need and why, and that allows folks like us to try and meet those needs. It’s fantastic just to follow the pulse of the industry based on people’s comments, questions, and sometimes even rants in CBP because you learn so much.”

Measuring success.

What does success look like for brewery-tech companies? For most of the panelists, success is becoming a real partner with their customers and providing valuable data. As Andrew put it, “You’re there to be an engaged partner, holding their hand through it. You don’t want to just dump a bunch of data on them; you want to teach them to use that data and really help implement data-informed decision making.”

Dan also hoped for data to drive growth, adding, “Our goal is to deliver data in a way that helps make a business decision that will help them grow. We want it to be data customers can trust, and data that they can use to better prepare staff. Really, we want to empower them to grow their business, so if we see our partners growing, then we’re doing our job right.”

For Justin, success comes in many forms. Not only does he aim to quickly convince operators of Kickfin’s value, he also hopes to better the lives of the tipped employees. “We are always focused on a 24-hour ROI,” he said. “If we can’t show that digitizing the cash tip-out process is going to save you time, money, and a whole bunch of accounting nightmares within 24 hours, then we’ve lost our seat at the table … Kickfin offers employees a way to live more financially-sound lives by sending that digital money to their bank of choice as soon as their shifts end.”

We were honored to connect with other service-industry leaders who want to help breweries harness the power of tech and data to ultimately strengthen their businesses. To watch the full conversation, click here.