With a business model that combines casual restaurant-quality food with a QSR service format, it’s no wonder the fast casual segment has seen nonstop growth. But its restaurant staffers also get QSR-level tips—which to say, few to none. Now fast casual operators who hope to avoid QSR-like triple-digit employee turnover rates can install an electronic tip jar that could help alleviate this situation.
Tip jars are ubiquitous in most types of counter-service foodservice operations. You see them everywhere from food trucks and c-stores to Starbucks and Chipotle. They enable workers to make an extra dollar or two or more per hour from the proceeds. On a percentage basis, it gives them a decent pay premium over their near-minimum-wage hourly rate. And from an operator or manager’s perspective, it’s a no-cost way to provide staffers with extra compensation while keeping the restaurant’s labor cost in check.
The tip jar premise relies on customers having change to put in it. That’s how it worked when cash was the default payment option. But now that a greater percentage of transactions are paid for via credit or debit cards, fewer customers have coins and bills to drop into tip jars. And because card networks have adopted “no signature required” policies for face-to-face transactions under $25, customers don’t have an opportunity to write in a tip for their transactions, either.
The net result for restaurant workers: less money in the tip jar. The net result for the restaurant’s manager: employees who are less excited about working at their restaurant job.
Enter DipJar. The device is a credit card scanner fabricated in the shape of a tip jar. Retailers simply plug the device in and place it on their counter next to their cash tip jar. Customers can then swipe their card and a preset amount—typically one dollar—is charged to their card.
The service is free to the restaurant operator. DipJar makes money by deducting a fixed amount, currently 20 percent, of credit card tips. That’s a big cut, but the argument is that without DipJar, the 80 percent of tips that go to workers wouldn’t exist.
Another feature restaurant managers will like: the DipJar system keeps track of the time at which a tip was given. That makes it easier to divvy up tips between overlapping shifts.
DipJar is in its test phase at the moment. We can see it catching on in a big way with restaurants. Employers gain access at no cost to a new pool of money that will boost the pay and spirit of their workers. But what about the customers? Are they really looking for a convenient way to tip on small, noncash transactions? Stay tuned.
