The Benefits of Pay-at-the-Table Technology for Your Restaurant, Bar, or Nightclub
Are you tired of tips being chargedback?
In today’s tech-driven hospitality business, restaurants, bars, and nightclubs must stay ahead of the curve regarding payment technology. One of the most significant advancements in this field is the introduction of pay-at-the-table technology, which offers numerous benefits for the establishment and its patrons.
In this blog post, we will explore why your restaurant, bar, or nightclub needs pay-at-the-table technology, especially given the potential pitfalls of traditional tipping methods. The emergence of pay-at-the-table technology has become increasingly crucial as credit card issuers have imposed a 20-25% threshold on tips. This threshold has led to a notable issue for businesses, as it can result in chargebacks and associated fees.
For instance, if a card is authorized for $100 and a guest leaves a $50 tip, only $25 of that $50 is approved, potentially leaving the establishment vulnerable to chargebacks and the accompanying fees. This predicament has underscored the necessity for a seamless and secure payment solution that mitigates the risk of chargebacks.
The advent of EMV chip cards and digital payment methods such as Apple Pay and Google Pay has further necessitated the adoption of pay-at-the-table technology. These payment innovations, introduced in 2015, ensured that the customer’s card never leaves their hand during a transaction.
As a result, the traditional practice of adjusting tips after the initial authorization became impractical, leading to the evolution of pay-at-the-table solutions. By implementing pay-at-the-table technology, your establishment can significantly reduce the risk of chargebacks associated with exceeding the tipping threshold set by credit card issuers.
When a guest adds a tip during the sale, the entire amount, including the base bill and the tip, is authorized. For example, if a guest’s bill amounts to $100 and adds a $50 tip, the entire $150 is approved, eliminating the possibility of a chargeback due to tip threshold violations. Beyond mitigating chargeback risks, pay-at-the-table technology offers your business a range of additional benefits. Firstly, it enhances the overall customer experience by streamlining the payment process, allowing guests to settle their bills promptly and conveniently. This efficiency can increase table turnover and customer satisfaction, boosting your establishment’s revenue and reputation.
Moreover, pay-at-the-table technology empowers your staff to deliver exceptional service by enabling them to process payments directly at the table. This personalized approach fosters a stronger rapport between the staff and guests. It minimizes the potential for errors in payment processing, thereby enhancing operational efficiency.
Adopting pay-at-the-table technology is paramount for modern restaurants, bars, and nightclubs. Not only does it address the challenges posed by tipping thresholds and potential chargebacks, but it also elevates the overall dining and entertainment experience for your patrons. By embracing this innovative payment solution, your establishment can stay ahead of the curve, drive customer satisfaction, and ultimately secure a competitive edge in the dynamic hospitality industry.
You can use wireless (Wi-Fi) credit card terminals or get a new point-of-sale system. Are you ready to book a call with one of our payment experts and bring your business into the modern age?
What is the Tipping Threshold?
When your card is run for $100, the card issuers authorize it for an additional 20-25%, meaning it’s authorized for $120-$125.
Why is my restaurant getting chargebacks for tips?
If you are using the old tip adjust method. You are rolling the dice if the tip is over 20-25% and risking getting a partial chargeback for exceeding the floor limit.
How much does a chargeback cost my business?
Chargeback fees can run from $15 to $35, depending on the company.
If you get 10 of these monthly, you could lose $150 – $500!
EXAMPLE TRANSACTIONS
Tip Adjust Method
The card is authorized for $100, tip adjusted $50.00
(card was only authorized for $125.00)
This results in a $25 chargeback plus a chargeback fee of $20.00
TOTAL impact: $45.00 lost.
Tip at the time of the Sale Method
The bill is $100, and the customer adds a $50 tip, totaling $150.00
The card was authorized for the full amount, and the customer felt good knowing it was in their hand the whole time and NO CHARGEBACK!
