Automatic tipping option as a springboard for better service and retention

Although the feature where guests are automatically offered the option to tip - or not - when paying via a pinterminal is not new, it often raises tongues. Lightspeed introduced its integrated payment solution, Lightspeed Payments, in Europe in summer 2021 and since then, hospitality operators have been able to use the feature automatically.

Why hospitality operators seem to be using the feature more and more often is easy to explain: the automatic tipping option emphatically brings tipping to the attention of guests, which, in our experience, raises the spirits of consumers. Yet the feature comes with numerous benefits - which may not be obvious to guests at first glance. 

Many guests do not consider the impact that tipping can have on the quality of service, and on a restaurant in general. An automatic tipping option ensures that staff will go the extra mile to offer the highest-quality service and give guests a noteworthy experience. 

Staff who are rewarded for their service are satisfied. Satisfied staff makes for better staff retention, which in times of the persistent staff shortage in the Netherlands is the top priority for many hospitality operators and can make the difference between staying open or having to close.

In addition, guests have less and less cash in their pockets. Partly because of Corona, partly because of the digitalisation of our society. People are paying less in cash or putting cash on the table. Catering businesses are also increasingly choosing to work cashless. 

The decline in the amount of cash circulating has also caused the amount of tipping to drop drastically. In this context, a digital and automatic tipping option for hospitality employees is a creative and, more importantly, welcome way to remind guests to tip and reward them for their service.

Finally, one of the less obvious but equally important advantages of the automatic tipping option lies in its name. Indeed, prior to payment, the tipping options automatically appear on the payment terminal screen. This saves staff considerable time and effort. 

Often guests indicate too late that they would like to tip, requiring the checkout process to be run through again. In hospitality businesses with a large seating capacity and double shifts where hundreds of bills are paid per day, this gives employees back a huge amount of time they would otherwise have to spend manually entering figures. This allows them to concentrate (even) more on their service. And so it comes full circle.

Finally, the tipping option is also completely optional. Hospitality operators can choose to activate the feature or not. In addition, hospitality entrepreneurs can decide how much and what amounts or percentages they specify. 

Last but not least, guests always have the option to choose not to tip or to enter a custom amount. The latter two options are standard on the pinterminal when the feature is activated.

In an article in Het Parool in late April this year, consumer psychologist Patrick Wessels argued that the automatic tipping option has more negative than positive effects. According to him, the feature actually normalises tipping. 

Of course, it could be argued that tipping in self-serve establishments, buffet restaurants and catering establishments that only work with pick-up or takeaway does not have much to offer. But in a society where tipping just seems to have been gradually forgotten, normalising tipping as a reward for noteworthy service could ensure that catering establishments that do commit to pleasant service can continue to guarantee just the same quality service. 

More so, in an industry that continues to struggle with persistent staff shortages, an (earned) increase in tipping would make the difference between satisfied and dissatisfied staff, which in turn could make the difference between a restaurant being open or closed.

Guests can always choose not to tip - which is their right - but if they had to choose between those options or stop going to their favourite restaurant, it seems to us that choice is quickly made.