Sunday , July 14, 2024

Eye on Restaurants: Digital POS Hasn’t Changed Tipping Much, Survey Says; Shift4 Acquires Revel

More Americans are being asked to tip, but it doesn’t seem to have much positive impact for some workers, especially those employed by restaurants. Only 29% of these workers say their tips have increased in the past year, according to the “Beyond Gratuity: Perspective of Restaurant Staff Tipping Practices” report from SpotOn, a hospitality point-of-sale system provider. Of the 1,000 surveyed, 36% say their tips have stayed the same and 35% say they’ve decreased.

The report from San Francisco-based SpotOn showed that the average tip for orders placed through the SpotOn Restaurant POS system in March was 18.99%, a 0.1% decrease from 19% in March 2023. A Pew Charitable Trust survey found that 72% of U.S. adults say tipping is expected in more places today than it was five years ago, with expectations to tip more often.

Though tipping requests have proliferated in nontraditional areas, such as at airport kiosks, the trend has not hurt most restaurant workers. Some 64% say it has no impact, 8% say it helps their tips, but 28% say it hurts their tips.

As for how they would like to receive their tips, cash is preferred by 89%, with credit cards and digital payments at a low 11%.

One way companies like SpotOn are trying to encourage tipping is by including suggested tip percentages on restaurant bills. Most workers—43%—say providing predefined tip amounts are helpful to consumers and servers, and 28% appreciate the technology and say it helps with their earnings.

As for how much restaurant servers expect to be tipped, 34% accept 15% as a minimum and 28% prefer no less than a 14% tip. Only eight percent expected an 18% tip and just 11% cited a 20% tip as their minimum.

In related news, Shift4 Payments Inc. says it will acquire Atlanta-based Revel Systems, a cloud-based POS system maker founded in 2010, for $250 million. Revel has equipment in more than 18,000 merchant locations. Shift4, according to its quarterly shareholder letter, intends to replace Revel’s legacy revenue model and rebuild it around payments. That means increasing distribution of the Shift4 SkyTab POS devices via larger direct and dealer distributors in the United States and internationally.

It will refocus the Revel staff to SkyTab product development and more enterprise level capabilities. The deal is expected to close this quarter.

One reason for the acquisition is the opportunity to build scale.

“So, if anyone’s familiar with Revel’s history, it was valued once at over $500 million,” Jared Isaacman, Shift4 chief executive, said during an analyst call last week, according to a SeekingAlpha transcript. “We’ve certainly announced the purchase price meaningfully less than that. But it was an organization that intentionally overlooked payments for a very long time. They built really good software, won great customers, but payments was similar to an afterthought until the last couple years. So, instantly, you have the ability to pursue existing customers, switch them over to payments.”

Shift4 also recently acquired the sports and entertainment business from SpotOn for $100 million.

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