What is Restaurant PCI Compliance?

In 2019, four major restaurant chains—Krystal, Moe’s, McAlister’s Deli, and Schlotzky’s—were hacked. Four million of their customers’ credit and debit card information was being bought and sold in an underground cybercrime marketplace, according to an article published by KrebsOnSecurity.

It’s no wonder The Ascent claims that last year was the worst year in history for identity theft reports, marking an increase for the second year in a row. Data breaches play a huge role in this alarming trend.

As a restaurant owner, you’re probably familiar with restaurant PCI compliance — and if you find it confusing, you’re not alone. But it’s important that you understand the basics for the sake of your restaurant’s security and your customer’s safety — especially with the increase in digital transactions due to the pandemic.

What is PCI compliance?

Back in 2004, payment fraud was on the rise. To combat this growing problem, credit card industry leaders such as Mastercard, Discover, American Express, and Visa, along with the Japan Credit Bureau, brainstormed ways to help protect their cardholders against identity fraud. They introduced PCI DSS 1.0 in December of that year, which required all merchants that accept credit cards to comply with this new set of standards.

Otherwise known as Payment Card Industry Data Security Standards Compliance, or PCI Compliance, these standards have been updated over the years to conform to industry trends and emerging technology. PCI compliance protects all businesses that process credit card information and the customers that patronize them from data breaches and identity theft.

Why does PCI compliance matter for restaurants and bars?

You’re well aware that providing amazing food, an exceptional guest experience, great ambiance, and top-notch service is part of why customers keep coming back to your establishment. But if customers don’t feel safe using their debit or credit cards due to potential theft, then that tarnishes your hard-won reputation as a trusted and reliable restaurant of choice.

As a restaurant owner, you’re responsible for your customers’ debit and credit card information the moment it’s swiped into your system. PCI compliance ensures that this info is protected at all times. If your restaurant is not in compliance, it could result in high fees from banks, credit card companies, and other merchants. On average, a data breach can cost a business an estimated $3.92 million, according to IBM, which would hurt a large-chain restaurant significantly and force closure, undoubtedly, for owners of smaller chains or neighborhood restaurants and bars. The best thing you can do is to closely follow all restaurant PCI compliance guidelines.

PCI compliance requirements

There are 12 PCI compliance requirements you need to implement to ensure your restaurant is protected from credit and debit card theft. To stay compliant you should:

Install and maintain a firewall configuration to protect cardholder data
Protect stored cardholder data
Do not use vendor-supplied defaults for system passwords and other security parameters
Encrypt transmission of cardholder data across open, public networks
Use and regularly update anti-virus software on all systems commonly affected by malware
Develop and maintain secure systems and applications
Restrict access to cardholder data by business need-to-know
Assign a unique ID to each person with computer access
Restrict physical access to cardholder data
Track and monitor all access to network resources and cardholder data
Conduct vulnerability scans and penetrations tests
Maintain a policy that addresses information security

Making your restaurant PCI compliant

The 12 steps above may seem daunting. To help with this process, reach out to your credit card processors, as they most likely have tools to help you become compliant. But be aware that while credit card processors claim their hardware and software tools are PCI compliant, this doesn’t mean your restaurant will be in the clear. It’s your responsibility to make sure you are maintaining a fully-compliant environment as well as using a compliant processor.

In the case your credit card processor doesn’t provide the tools you need to become PCI compliant, Level 4 merchants, which is what you most likely fall under, can establish compliance through a self-assessment questionnaire (SAQ). There are a number of different SAQs you can use, so use this guide to help you find the right one for your restaurant.

After you’ve found the correct SAQ version to use, complete it and then do these steps to establish restaurant PCI compliance:

Complete a vulnerability scan with a PCI Approved Scanning Vendor (ASV), which is an organization with a set of security services and tools to conduct vulnerability scans that validate PCI compliance. Here is a list of approved ASVs.
Submit your SAQ to the bank you use for your restaurant.

From there, you’ll simply wait to hear back if you’ve been certified PCI compliant, which can take a few weeks.

Keeping your restaurant PCI compliant is essential to the security of your paying customers and for the reputation of your establishment. If you’re not compliant, or you’re unsure if you’re meeting all of the criteria, do it as soon as you can. The livelihood of your business could depend on it.

Tip Pooling Tales from Reddit

Not surprisingly, there are strong feelings about tip pooling from servers and other restaurant employees on Reddit. The conversations often centered around these high-level themes:

Does tip pooling really foster teamwork?
Do top performers take the biggest hit?
Can tip pooling help with income consistency?
Is it fair to include back-of-house?

Read on for a deeper dive!

1. Tip pooling and teamwork

Many Redditors noted that tip pooling can help to create a collaborative, team-first culture where everyone wins.

Of course, that comes with some caveats from the Reddit crowd:

“I own a fine dining restaurant with tip pooling. … servers help each other out and care what’s going on in others sections … the servers REALLY care about training their coworkers right.”

“It’s the best system in the world if you work with a team where everybody is competent and pulls their weight.”

“We do tip pool… Less drama, more teamwork… efficient when you work with people that are hardworking and pull their own weight.”

“It forces a stronger team mentality…No system is perfect and the strongest servers definitely take a hit most days, but it’s the positive environment that makes up for it usually.”

“I think it helps encourage the senior staff to invest in the newbies. Obviously, if the newbies efforts or attitude aren’t cutting it, time to go.”

The takeaway: If you have the right people, then your tip pool becomes a motivator for your employees to have each other’s backs, to participate in training the newbies, and to be accountable to each other. As the last Redditor here noted, it also means you have to be willing to weed out your weakest links.

2. Does tip pooling penalize top performers?

On the flipside, some commenters highlight how employees — particularly top performers — feel the system redistributes their hard-earned earnings to less productive coworkers, which can erode motivation to upsell, promptly turn tables, or cultivate regulars.

“You lose the need to hustle…tip‑pools have taken away my ability to control how much money I walk with … which made me less willing to hustle.”

“‘Lazy people…hold up the tables so they work less than others but make the same money.’”

“I was pulling $400‑$600 by myself and then … only saw $150‑200 of it which really sucks.”

“Personally not a fan of tip pooling. I typically have the highest tip percentage and I’d rather keep that for me.”

The takeaway: When the link between effort and reward is weakened, the drive to earn more through performance can dwindle. Again, as always, the goal is to have a team of top performers across the board — but in reality, you’ll always have a range of talent.

If you’re using a tip management system like Kickfin, you can track your employees’ tip payouts over time and see how payouts actually stack up across your team. You can always tweak your tip pooling policy to ensure your performers are getting rewarded for their extra-hard work. Or consider offering shift-based performance bonuses outside of the pool, based on things like guest feedback or upselling performance. This keeps the pool intact but allows standout employees to earn more.

3. The case for income consistency

When tips make up the majority of your take-home pay — as is the case for many restaurant workers — you may not know what to expect from one shift to the next. That can make managing finances hard, especially for workers who are living paycheck to paycheck.

Tipping is supposed to reward high quality service, so theoretically, tipped employees wield a fair amount of control over what they earn. And tip-pool detractors argue that tip pooling takes away that control.

But in reality, it’s not so black and white. For example, some sections are busier than others; the employee working the patio on a warm summer evening might be set up to earn more than the server working the back corner next to the restroom. The bartender working the night shift is going to earn more than his coworker who’s there for lunch.

And unfortunately, research shows that customer bias and discrimination can impact tip earnings.

As some Redditors pointed out, tip pooling can help reduce this income variability.

“Pooling tips offsets any issues with tables that don’t leave a tip…Overall, this system has increased the quality of service…”

The income might decrease a little bit on busier days but it does usually increase on slower days. And the income is more consistent.”

The takeaway: Of course, it’s not fair to always work the busiest section of the bar, only to split tips evenly with bartenders who work in a much more laid-back section. If you’re pooling tips to help with income variability, it’s wise to find additional ways to control for other variables. For example:

Strategically rotate busy and slow sections among your different servers.
When scheduling, make sure the same people aren’t always opening and closing — and as much as possible, rotate your employees through high- and low-volume shifts.
Offer easy section or shift trades for employees.

4. Should Back-of-House Be Included in Tip Pools?

In addition to the general pooling benefits (collaboration, culture) — there are some valid reasons to include BOH in your tip pool:

Guest experience: When tipping, guests take into consideration things like quality of food and speed of service — which BOH staff heavily contribute to.
Guest expectations: Guests may assume that their tips are getting distributed to everyone — not just servers. (And taking it a step further: clearly communicating that to your guests could generate higher tip volumes.)
Retention: With rising labor shortages, offering tip sharing can help attract and retain skilled BOH workers who might otherwise leave for better-paying jobs.

(Keep in mind: There are some legal restrictions when it comes to including BOH in your pool — e.g., if you’re taking the tip credit, you generally can’t include BOH. Find more details on tip pooling laws and compliance here.)

So what do real-life servers say about including BOH?

“Many places in new orleans had made the switch after quarantine. It’s a God send to the back of house, for most cooks it can be life changing. The FOH is a revolving door now though, why split tips with the kitchen when you can make 600 a night at the bar down the street.”

“I am not upset, I’m getting paid decent and I know how hard it is to smile and be nice all the time and interact with the dreaded public. They are welcome to the extra money and the headache.”

The takeaway: First and foremost, ensure you can legally include back-of-house workers in your tip pool. If you feel it’s right for your restaurant, a few ways to make it work well for everyone:

Get buy-in from FOH and BOH: Clearly communicate how and why the structure works. Share real numbers and example breakdowns, and emphasize shared success — tips reflect everyone’s effort (not just what happens tableside).
Start small: If FOH is resistant, make the tip-out percentage minimal and see how it goes before increasing
Use a weighted distribution model: To fairly divide the tip pool, assign different weights or percentages to each role based on their contribution.

📝 Final Thoughts

Reddit feedback makes it clear…that there’s a lot of gray area when it comes to employee perspectives on tip pooling.

Ultimately, restaurant workers seem to agree that well-executed, shift-based pools under strong management can foster unity and a dependable livelihood.

But in mixed teams or mismanaged setups, performers lose motivation, and the culture quickly deteriorates — which ultimately affects morale and retention. And unfortunately, all of that can spill over into the guest experience.

If you’re pooling tips, one of the most important things you should do (aside from ensuring your tip pool is compliant!) is track everything. Having a digital paper trail not only ensures accuracy and prevents tip disputes — but it also gives you the hard data you need to truly evaluate your tip policy.

Has Reddit swayed your opinion on tip pools? Or made you rethink your current tip policy? With Kickfin’s tip pooling software, you can easily customize and automate your tip pooling policy — then track every payment, all in one place. Schedule a demo today!

Restaurant Management

Tip Pooling: Pros and Cons

For restaurant owners looking to boost teamwork and make sure every employee gets their fair share, a tip pool or tip share seems like a natural solution. But like there are pros and cons to tip pooling that every operator should be aware of.

Of course, it doesn’t always make sense to pool tips. (And when it does make sense, tip pooling policies are definitely not one-size-fits-all!)

If you’re on the fence, check out our tip pooling pro-con list below and consider how they would affect your restaurant’s unique dynamics.

What are the pros of tip pooling?

It takes a lot of hard work and collaboration to deliver an excellent guest experience. For most restaurants, the primary goal of tip pooling is to ensure all employees are fairly rewarded for their contributions.

Here are a few of the benefits that tip pooling offers restaurant teams.

1. Improved performance

When executed strategically, tip pooling can bring your team together around a shared goal — delivering a top-notch guest experience — and reward them for doing so.

And when employees are all working toward a common goal, they’re much more likely to work together and go out of their way to lend a helping hand or fill in gaps. This can be particularly true for tip pools that include employees who generally aren’t directly tipped, like bussers, hosts, and back-of-house employees.

2. Reduced competition among servers

Does one section get all of the large parties (aka all the large tips)? Or does your patio section get too hot for most guests during the summer? When employees aren’t sharing tips, your workplace culture might start to feel (overly) competitive and even lead to tension or disputes. When servers start feeling slighted or get hung up on who-got-which-table, not only does that affect morale — it slows everyone down.

An equitable tip pool can keep servers from feeling like they need to keep score, so they can focus on providing top-notch service to all of the guests in the restaurant.

3. Increased focus on training

When you bring on new staff, you typically have them train with your best veteran servers. And when those vets know that their trainee will be part of their future tip pool, they’ll be more invested in the training, making sure to give them a master class in upselling and customer service.

4. More equitable distribution

Unfortunately, customer biases — conscious or not — can impact tip amounts. Whether based on race, gender, or other factors, this kind of discrimination can affect your employees’ livelihoods.

While restaurant operators can’t control if some employees receive preferential treatment, they can help to compensate for those injustices by pooling and fairly distributing tips.

Cons of Tip Pooling

While most restaurants these days run some form of tip pool or tip share, there are some common drawback and pitfalls to tip pooling, which are worth considering before you implement a new policy

1. Top performers may feel negatively impacted

If your best servers are consistently bringing in far more than the standard 18-20% in tips, they might not be so pleased to share with employees who may not have the same experience, talent or work ethic.

Couple that with the fact that some servers can turn tables much quicker than others, resulting in a higher volume of sales and a whole lot more tip income — well, your top earners could start feeling cheated by the tip pool.

And in a tough labor market, if a hardworking employee isn’t happy with their earnings, they likely have other options.

2. Under-performers can slip through the cracks

On the flip side of that: a tip pool could allow lower-performing employees to slip through the cracks. If you’re not closely evaluating the average tip amount (and average check size!), you may miss that one of your employees is struggling with their customer service.

3. Compliance is an added consideration

Tip pooling is regulated at the federal and (usually) state level. Some municipalities also have their own rules around how to legally pool tips. These laws can get pretty complicated, making it all too easy to fall out of compliance without even knowing it. For example: managers can’t participate in a tip pool; but what happens if a manager is also performing server duties? Can you include back-of-house in your tip pool? Does your eligibility for the tip credit change if you operate a tip pool? It’s important to know the answers to all of these questions and fully understand the laws that apply to each of your locations. (Especially if you have locations in multiple states!)

Tip Pooling Pros and Cons at a Glance

That’s a lot of information to take in, so here it is a handy-dandy pro-con chart.

To Pool or Not to Pool?

The majority of restaurants in the U.S. operate some form of tip pool. At Kickfin, we’ve worked with thousands of restaurant teams who participate in tip pooling or tip sharing. We’ve found that often, the positives outweigh the negatives.

But that comes with a major caveat: the best tip pooling teams have been strategic and intentional with their policies — and as a result, no two tip pooling policies look exactly the same.

If you want to set yourself up for tip pooling success, here are a few general rules of thumb.

Evaluate your requirements: Ask yourself why you’re running a tip pool. What needs are you trying to address or problems are you trying to fix? Specifically consider your restaurant type, team size, org chart, and local market to find the best policy for you.
Don’t overcomplicate: It shouldn’t require a degree in calculus to calculate your tip pool. If you feel like it’s getting unwieldy, it’s possible you’re setting your team up for mistakes and tracking issues.
Get feedback for better buy-in: This shouldn’t be a decision-by-committee scenario, but it’s worth checking with management and even some of your team’s unofficial leaders to get their input before running with a new policy. This can help get the rest of your employees on board.
Write it down and run it by your counsel: Your tip pooling policy should be on paper, in black and white. You should also have your legal counsel review it to make sure you’re not inadvertently out of compliance with tip pooling regulations.
Communicate everything: Once you’re feeling good about your policy, share it. Make sure every tip-eligible employee understands how it works and has the opportunity to ask questions.
Ensure transparency by tracking everything: It’s not enough to share your policy. It’s important that every payout is tracked, including how those payouts were calculated. Not only does that streamline accounting and reporting; it also creates a culture of trust with your employees. If there is ever any question around a payout, having a digital paper trail is invaluable.

The best tip pools are automated

Tip pool calculations often happen in a spreadsheet, which is less than ideal. Kickfin integrates with your POS, so you can eliminate spreadsheet math, reducing the risk of human error and ensuring every payout is accurately calculated and tracked. Plus: Kickfin customers can send instant, cashless payouts directly to their employees’ bank of choice.

The result: All the benefits of tip pooling, without the hassles, risk, and time required. (In fact, many of our users can calculate and pay out tips at the end of each shift in under 60 seconds!)

Want to learn more? Request a demo today.

Product and Company News

Kickfin Recognized on the 2025 Inc. Regionals List

Kickfin has earned a top spot on the 2025 Inc. Regionals list in the Southwest region! This recognition places us among the fastest-growing privately held companies in America—and we couldn’t be prouder of what this means for our team, our customers, and the restaurant industry at large.

A Milestone Achievement

As the #1 tip distribution platform, Kickfin is trusted by thousands of restaurant teams to automate tip pooling and payouts. Since 2017, our technology has given managers hours back in their week while improving accuracy, visibility, and reporting for operators.

Only 951 companies made the cut across all regions, and in the Southwest alone, the businesses on this list contributed 13,809 jobs to the U.S. economy while achieving a median growth rate of approximately 106 percent from 2021 to 2023.

Powering the Future of Tip Management

In the past year, Kickfin has taken automated tip management to a whole new level. In addition to exciting new features that make our platform more robust than ever, we continue to add to the list of our direct integrations with the leading POS brands—which currently includes Toast, SkyTab, Square, Heartland, RPOWER, PAR POS, Oracle MICROS, NCR Aloha, and more.

→ See how the Kickfin-Toast integration “changed everything” for HOBNOB restaurants

Kickfin’s POS integrations give our customers the ability to auto-calculate even the most complex tip pools in just a few clicks, which eliminates unwieldy tip spreadsheets, saves managers even more time, and gives operators unprecedented visibility into payout calculations and history.

A Heartfelt Thank You

This achievement wouldn’t have been possible without the trust of our customers and the dedication of our team.

As Justin Roberts, co-CEO of Kickfin, puts it: “We’re incredibly grateful to our customers who have made this growth possible by trusting Kickfin with their tip management needs. This recognition is a testament to the value that automated tip management brings to restaurant teams—helping them save time, reduce risk, and take care of their people.”

We’re honored to be included in the 2025 Inc. Regionals list, and we’re excited to see what the rest of 2025 has in store!

Product and Company News, Technology and Software

Kickfin Integrates with RPOWER POS to Automate Tip Distribution for Restaurants, Bars and Nightlife

You heard that right — Kickfin has added yet another partner to our ever-growing list of POS integrations!

RPOWER POS has joined the list of leading POS systems that now integrate with Kickfin so users can fully automate tip calculations and payouts.

RPOWER is a trusted name in the restaurant industry known for its handheld devices, online ordering capabilities, and robust reporting. RPOWER’s dedication to staying on the cutting edge of restaurant tech makes the integration with Kickfin a perfect match!

With the RPOWER-Kickfin integration, restaurant operators can:

Easily build out highly complex tip policies
Calculate tip outs based on roles, shifts and hours worked
Distribute tips directly to employee bank accounts
Establish an electronic “paper trail” for every tip out

( …and more. Dive into the latest Kickfin updates for the full scoop.)

Like all of our integration customers, when RPOWER users activate the Kickfin integration, they’ll have access to our robust Customer Success team (at no extra cost!). We’re here 24/7 to review and build out your tip policy within the platform, so you’ll be up and running in a flash.

Collaboration with Riot Hospitality Group

This integration was especially exciting because we worked hand-in-hand with one of our longstanding customers, Riot Hospitality Group, to ensure the integration checked every box — and that it could handle their complex tip pooling policies.

“Kickfin has been an outstanding partner to Riot Hospitality Group for years,” said J Goldin, the systems director for RHG.

“They had already helped us go fully cashless, which eliminated a lot of risk for our teams. When we decided to completely automate tip payouts, they were a natural choice to help with that as well. We worked hand in hand with Kickfin and RPOWER to ensure the system could handle the intense complexity of our rules, while still being incredibly easy to use for our operators.”

“Kickfin is easy to implement and easy to use. If you’re thinking about trying it, you’ll be glad you did.”

As our co-CEO Justin Roberts puts it, this integration is a “no brainer for RPOWER users who understand how valuable their managers’ time is.”

RPOWER users, we’re ready for you! Schedule a demo to learn how you can activate your integration.

(Not an RPOWER user but want to take advantage of these time-saving features? See if Kickfin is integrated with your POS!)