We have all heard of the expression ‘Cash is King’ which was coined back in 1988 by the then CEO of Volvo, Pehr G. Gyllenhammar after the global stock market crash.
Fast forward 33 years later the same statement is shrouded in a cloud of uncertainty. Financial experts across the globe suggest that as the data holds, cash is slowly but certainly on a path to decline. The Covid 19 pandemic has definitely accelerated the demise of cash as most consumers rely heavily on credit cards and other cashless payment solutions.
The boost in Cashless payments can be attributed to drastic changes in consumer behaviour as more people are being exposed to online shopping, touch-free payments, curbside pickup and no-contact deliveries. All trends that have only really kicked off in the last 5 years.
This is reaffirmed by the fact that payment processors such as Square saw a 288% increase in cashless payments processed over a period of six months since the pandemic hit.
In the UK, the food and beverage sector has led the way in going cashless with a whopping 33% of businesses in this sector going cashless. This reflects a rising trend in businesses going cash-free and shows the importance of why the hospitality sector need to embrace a cashless tipping system.
What is an ideal cashless tipping solution?
An ideal cashless tipping solution should allow instant, contactless transfer of gratuity directly to a beneficiary’s bank account.
This should enable a customer to tip a wait staff, hair dresser, delivery driver etc. without even having to go through a sign-up process.
Here are the 7 key benefits of switching to a cashless tipping solution.
- Increased Tips
Dan Schulman, the CEO of PayPal recently stated that the post-covid economy is as a sign that digital payments are shifting from “being a nice-to-have capability to a must-have essential service.” This is marked by an unprecedented surge in demand for cashless payment solutions.
A study by Pew Research Center found that there has been a substantial decrease in cash usage over the years with nearly a third of adults in the US not favoring cash transactions. All these factors have collectively resulted in gig-economy workers struggling to make enough money in tips as people don’t carry cash anymore. Having a cashless tipping solution at your business will not only open up a new avenue for customers to tip the worker directly, the QR codes or NFC devices will serve as a visual reminder to reward good service.
2. Employee Safety
Digital payment means there is no need for ATM cash withdrawals, which means avoiding a high-contact surface, which further means cash is not being exchanged between individuals. This dip is multiple touch-points with cash can dramatically reduce a possible viral transmission. Having a cashless tipping solution at your facility can keep both the workers and customers safe by minimizing viral risk.
An additional bonus with cashless tipping is that the money goes straight into the workers bank account. This ensures that the worker never has to carry cash around and their hard-earned tips are safe in case of an unfortunate event of mugging.
3. Automated Tip Distribution
Embracing new technology opens up a wide array of benefits. A Smart TV offers access to all your streaming services at a click of a button, a wireless speaker can double up as capable voice assistant.
A smart, cashless tipping solution can automatically distribute tips among a group of employees. This can be a useful functionality for businesses trying to reduce wage in-equalities between front of the house and back of the house staff. By enabling the chefs and kitchen porters to get a share of the tips you can promote a culture of team-work within your organization.
4. Improved Transparency
Over the years the management of tips at a business has always been a subject of mystery to the employees at an establishment. Most customers pay a service charge at the end of a service, but how exactly the service charge is being distributed at a facility is knowledge only the exclusive to the league of owners/general managers.
There is a rising trend in allegations that businesses pocket a large chunk of the service charge which are meant as gratuity for the workers.
Moreover major food delivery companies have been involved in expensive lawsuits for their deceptive ‘Tipping’ practices.
Having a digital tipping system keeps the whole process transparent and helps build reputation of being a fair employer minus the legal liabilities.
5. Analytics and Insights
Apart from automating tips distribution for a group of employees and setting custom distribution scales, the key benefit of a cashless tipping software is the advanced data analytics it can offer to your business.
Analytics into tipping data gives you insights on the customer tipping pattern, employee performance and employee reviews. This lets you get customer feedback, identify the best performing staff members and assess what areas can use improvement for the future in terms of overall service.
6. Better Employee Retention
In a traditional payroll system, the tips/service charge is distributed once or twice a month amongst the employees at an establishment. The real benefit of a cashless tipping solution is that it ensures that the tipped amount goes directly into the employees bank account instantly. Being employee centric gives employers an X-factor, by making sure your staff get paid on time goes a long way in building a good professional relationship. A happy crew of staff means free marketing for your business. In a market that has a very high turn-around being employee centric can help you retain the best talent in the industry.
7. Reduced Admin Burden
Moving to a digital platform means less dependency on cash. In an economy that is becoming increasingly cash-negative, businesses can save up on money spent on frequent bank runs.
A cashless tipping solution will eliminate the admin burden, tax compliance & time needed to manage tips at a business. From an Employers perspective having a cashless tipping solution means they never have to worry about managing tips at their business again. This will ensure the Managers and Staff are always focused on their primary duty which is serving customers with a smile.
Feel free to comment and share your views on the topic.
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We are offering our cashless tipping solution to all businesses in the hospitality sector for free to battle the economic impact of Covid 19.
Find out more: www.QuikTipz.com