Tipping features in modern card readers: what businesses should know

As more and more customers choose to use contactless payments rather than cash, what happens to the humble tip? Fear not. If you're in the hospitality industry or running a service business where tips are common, you can still get them. It's just important to understand how they work in the card reader era.

Why tipping matters in today's service businesses

A tip has always been a welcome way to show your appreciation for a waiter, hairdresser, taxi driver or other worker. In many cases, tips are seen as a vital part of compensation; waiters, for example, often depend on them to supplement their basic income.

However, the nature of tipping has changed over the years. In decades gone by, it was easy for customers to pay with a note and a breezy, "keep the change". Nowadays, cards and other forms of contactless payment are the norm, and workers who rely on tips are often frustrated.

As a small business owner, it's important to understand how to add tips to card payments. This lets your customers show their gratitude and ensures your team members get the money they deserve. Let's take a look at how you can receive tips when you take card payments.

The evolution of tipping: from coins to contactless

Tipping is nothing new. In fact, grateful customers were offering extra payment to service workers all the way back in the Middle Ages. During the 20th century, tips were firmly entrenched as a common social custom in many countries.

In particular, tipping is very common in the USA, and American TV and films have helped make it a cultural norm in other countries, too. In the US, tips are seen as a basic part of life. Workers in some industries, including waiters, are paid below minimum wage, with the expectation that they'll make more than enough in tips. Tourists who visit the US are often surprised by the importance of tipping there.

Here in the UK, British consumers aren’t known for tipping as much as Americans. However, customers still tend to tip waiters, hairdressers, barbers, and taxi drivers. Tips are also often given to tour guides, hotel staff, and workers in the beauty industry, such as nail technicians.

Of course, every society is different. In Australia and New Zealand, tips are not expected, and in parts of East Asia such as Japan, they can be offensive!

Wherever you go, one thing remains true: fewer customers are carrying cash these days. This means businesses need to look for modern tipping solutions. Customers are still eager to show their gratitude, but it's important that you provide them with an opportunity to do so.

What tipping looks like on a card reader today

Imagine you're taking a payment from a customer. You hand them the card reader so they can check the final total is correct. When they press "OK", the card reader can give them the option to add a gratuity.

With an easy tipping card machine, the process is very simple. The screen will prompt the customer to choose a tip; this may be a fixed amount, such as £5, or a percentage of their total bill. Customers will usually be shown some set options, but they also have the chance to choose their own tip. For example, the options might be 10%, 15%, and 20%; however, a customer can override these with personalised input.

Customers can select the tip they want before confirming their payment, tapping their card or contactless device, and completing the transaction. In this way, a touchscreen device can make tipping quick, easy, and intuitive.

How to set up tipping with SumUp devices

SumUp's card readers are all equipped to accept tips. However, this may be switched off by default, as tips aren't typical for every business.

Here's how to set up tipping depending on your SumUp device:

SumUp Solo

• Tap the arrow at the top of the screen on your Solo card reader.

• Select "Tipping".

• Toggle "Collect tips" to allow customers to add tips to their payments.

• Toggle "Smart Tip" to show customers quick and easy default tipping options.

By default, smart tipping will show tipping options of 10%, 15% and 20% of any transaction of £10 and over or £1, £2 or £3 for transactions under £10.

SumUp POS

• Open up the SumUp app and tap the profile icon in the top right corner of the screen.

• Select "Tipping".

• Turn on both toggles: "Standard tipping" and then "Smart tipping". This will show customers the same defaults mentioned above.

• To change your tipping options, tap an individual tip rate to edit it, or choose the edit icon in the top right corner.

• Enter your chosen tip percentage and hit the confirm button in the top right corner.

Tap to Pay

SumUp Tap to Pay allows you to accept payments using your mobile phone as a contactless reader. To set up tips in Tap to Pay, open the SumUp app and follow the instructions above.

Benefits of enabling tipping for your staff and your business

Enabling tipping can sometimes seem like a bit of a faff, but there are a number of reasons to do it. Here's why:

It keeps your staff happy

As a business owner, you may not be fussed about tips. However, your employees are often highly motivated by them and delighted to receive them. If you can increase staff tips, that can also help encourage worker satisfaction and ensure better staff retention.

Customers want to show their appreciation

Often, customers really want to leave a tip. Why stand in their way? They're happy to acknowledge your team's hard work, and they may even feel uncomfortable if you block them from leaving a tip.

Digital tips are easier to manage

There are lots of good things about cash tips, but there are downsides, too. Notably, with cash tips, some team members will be carrying cash at work. This can lead to problems, as it means that extra money is floating around your business. You'll also need to set specific policies in place about workers carrying cash for maximum transparency and accountability. With digital tips, that problem disappears, making everyone's life a lot easier.

Digital tips help with accounting and fairness

With digital tips, you can easily see how much your staff members are actually taking home. Of course, in the UK, tips cannot be used to make up an employee's wage, but it's helpful to have a clear idea of what tips are like. This is a common question that potential new hires may ask at an interview. It also allows you to share tips fairly among your staff, according to your own policies. Do the waiters get all the tips, or do you want to give some to the back-of-house staff, too? Digital tips are easy to track, and you can allocate them fairly to the team.

Smart tipping strategies for different industries

Each industry has its own tipping norms. Unlike in the USA, where people tend to leave a standard percentage, tips can be quite complicated to work out in the UK. Here are some ideas to encourage tipping according to your industry:

• Salons: offer preset tipping options as percentages, such as 10%, 15%, or 20%. Remember that customers may prefer to choose their own tip.

• Cafés and quick service restaurants: hospitality businesses with counter service can't expect the same tips as those with table service. Asking for 10% or more is likely to irritate customers, and businesses which expect very high tips often go viral for all the wrong reasons. Instead, offer options of round-up tipping, which is the digital equivalent of "Keep the change".

• Wellness businesses, such as massage or therapy: offer a few different preset suggestions as percentages. Tips in the wellness industry are often generous, particularly for hands-on, high-touch services, so don't be afraid to set percentage options.

Whatever type of business you're running, it doesn't hurt to remind customers about tips. Do this visually rather than verbally, as that may seem intrusive. A sign on the counter is a good idea: "tips appreciated — just tap to add".

Tipping doesn't have to disappear in a cashless world. With the right card reader and flow, you can support your team, satisfy your customers, and simplify tip handling.