Why Restaurants Get Chargebacks On Tips Higher Than 20% | Tipping Thresholds | B2B Vault: The Payment Technology Podcast | Episode 115

What's up everybody? It's Justin live from B2B Vault, the payment technology podcast sponsored by Nationwide Payment Systems with your host Allen Kopelman, and we'll be providing you educational information regarding small business fintech, payment processing, and the technology businesses use in the world today. And in today's podcast, we're going to be talking about the 20% tip tolerance. And, uh, there was a discussion on social media regarding this, um, which was news to me, um, answered a few questions that I had. You know, I was kind of I guess befuddled a few times as to how, you know, my bill was less than what it should have been at a few restaurants after the tip. Um, I'm sure if anyone has ever went to a restaurant and tipped more than, you know, a normal tip would be, I guess, you know, you're being generous, right? I'm— my wife always says I'm more generous than I need to be, but I always Yeah, I like to tip, you know. I mean, they don't make a lot of money, and if I'm there enjoying— and I mean, again, this goes how if they're going to do a good job, how many times they come to the table, do they check on us, they fill the water up, did they make sure everything was hot.

Could also be like a special person that serves you in the restaurant, and maybe, you know, they had a baby, birthday. Yeah, it's their birthday or something like that. There you go.

In college, trying to get home, you know, there's just a lot of different you know, situations that could happen, right?

But it could be like a regular waiter, and, you know, you're showing your appreciation. Maybe they had a baby, right? For sure. You go, oh, I'm gonna leave them a $100 tip, right?

And you get— you find— you get— you find out that they didn't get it. And I think, uh, that, you know, this is a good podcast for you to explain why, uh, you know, or or, you know, reasons why they don't get the, you know, the tip. It's not because of you, it's because of the cardholder, right?

So what interested me— this interested me in this subject matter was there was— I'm in a few Facebook groups and there was some people discussing about an article, the articles from 2021 a restaurant called Deadhouse— Deadwood Brew House. I looked it up, it's in South Dakota somewhere. Got a little bit of coverage from the, from the news there about people were leaving tips over 20% and they were getting chargebacks. Now, one of the things that they said in the, in the news story I didn't really agree with was they said they were charging back the whole tip. And I've never seen that before. I've seen these chargebacks before, and it happens a lot, and it's been happening. Been in this business since 1998, started this company, Nationwide Payment Systems, 2001, and this is something we've been dealing with since 2001. Now I know I used to have Capital One as a credit card, and I, and I distinctly remembered that one of the things I liked about their, you know, that card was if you went into a restaurant and you did tip over 20%, they would send you a text message.

Nice.

And they would say, hey, you left a better tip than 20%, did you mean to do that, yes or no? If you would say yes, obviously nothing would happen. If you said no, that'd be a red flag. They would probably charge back amount over, you know, whatever. They would say, oh, what's the correct amount? You type it in and they would fix it. And you know, the tipping rules have this tip— this rule, I'm going to explain the rule. So you go into a restaurant, I'll just use round numbers so it makes sense to everybody, and your bill is $100. Yes. So the— when the waiter goes over to the credit card machine, now you got to remember I've been doing this so long. We started with the mag stripe, then 2015 we switched to the EMV chip. Okay, they never changed the rule in any of this, right? Now, so when you did— when you swiped the card or you dipped the card into the machine or the point of sale system, it calls out, it gets an authorization for $100 plus 20%, so $120. Now if you tip over that, there's a good chance that the bank where that card is issued is going to charge back the additional amount. And I've seen it before, you know, and we've told like our clients over the years because we do a We used to do a lot of restaurants. We do some restaurants today. We don't do a ton. We don't do a ton of them, but we have quite a few restaurants and bars and nightclubs. Now, bars— typically people have been known at bars for years. This has been an issue for tipping at bars.

Really?

People normally— yeah, people leave really good tips at bars.

Well, that's because they're drunk.

Well, and they're happy. And it could be that the girl is— look, the bartender, of course, is attractive, maybe, right? And but people tend to tip more, and especially at nightclubs too. You're at a nightclub, let's say you're getting a table, and the girls are coming over and they're serving, and right, and then you want to leave a big tip, right? People are showing off that get those kind of VIP services, right? So we really started to encourage people, like, you guys have got to do like a little bit better job and give the person the, you know, print the receipt from the point of sale, leave a line for the tip. So before you go back with the credit card, they could write the tip in, you know, ask the customer, oh right, then take their credit card back and do the transaction all by itself. So that way, let's say Justin goes in He knows the waitress. The waitress just had a bit— her and her husband just had a baby. He's like, oh, I'm so excited, and he gives a $100 tip. Now, if they did that, they could go back to the machine, put in a $100 tip. Now when the machine calls out, it's calling out for $200. So it's going to get authorized, right, for the whole full amount. The same thing, you have a device like this, which, you know, Wi-Fi, there's tons of these devices. We got all kinds of devices. You could take this to the table, right? Put in— they bring up the check, it's $100, it asks you for the tip, you put your card in, and then it calls out again for the whole amount.

I like that. I like that technology, right?

So the pay at the table is the way to go, you know. The pay at the table is definitely the way to go. And we've put that in. We tell everybody you need to do tip at the time of the sale. This way there's no mistake. The customer put the number in because you know what the credit card company doesn't like. Let's say Justin goes in a place and the bill's $100 and he writes down $30. Okay, and maybe he wrote 20, but the girl says, oh, that looks like a 3. And then they punch in $30, and then it gets a chargeback, and then you send it in and it doesn't look clear because somebody looks at it and they go, and it's over the amount. You got to switch over to this. Yeah, at the time of sale, learning all of this, like, is just really—

it's gonna— I'm also one of the person that usually carries cash to leave the tip, right? Because I know that how that you know, right? Sometimes they might not get that tip right away, you know, all depends on how the, the, you know, yeah, how the restaurant functions, right? Um, so this is going to make me even remember more to, to bring cash. Yeah.

So let's go over— let me— so first of all, let's understand, people can— you can do a chargeback up to 13 months, but that's not true. That's what they said in the story. It's 6 months from the time of the transaction. I don't know where they got their 13th month, but you know, the story was old. Um, I didn't really— you know, if the TV—

why were people talking about it?

And then they were talking about it because they said they posted a story and then people were commenting from restaurants, from nightclubs. Other people that do credit card processing commented that they have restaurants that are dealing with this tip thing. Because during the pandemic, a lot of people were— that were regulars at restaurants started leaving bigger than usual tips. Uh, and so this is why the story came out. Then they showed this lady at this restaurant, she had all these receipts piled up on the counter of all these over-tipping. And I saw what kind of point of sale she had. That point of sale, I don't want to say the name of it because we don't necessarily sell that one, but I believe it was one of the ones that has the ability to do pay at the table. And you got to switch to the— if you're not doing this pay at the table thing, you know, you got to get switched over to pay at the table. Because pay at the table, or let's say you have pay at the counter, right? And a lot of places have that. You don't pay the— you go to the front, right? You take your bill, you go to the front, you pay your bill, and they can do tip at the time of the sale there too. And that way, you know, it's all authorized together. There's no mistake. You punch in what you want. Um, customer, you know, we have, you know, also have these as a customer-facing screen on it so the customer can put the tip in. You can have percentages pop up. There's all kinds of ways to cover so that it's covered, you know. I mean, so let's talk about—

definitely be doing pay at the table, right? And And it's a new technology. That's the way the customers want to pay. That's the way I want to pay. That's the way Allen wants to pay.

You want to pay, you feel safer paying that way. The card's not leaving your site. You know, we have some bars and they have the terminals on the bar, Wi-Fi. They, they put the card in, they turn it around, hand it to the customer, customer puts in their tip, boom, it's all at one time. And that particular bar right? They started doing that there like even be— even before we, we configured the machines before that.

Nice.

So they could take the— even the old machines we had, they could turn them around and ask the person to put the tip in, even on the old, really old machines from years ago, because they were getting tons of chargebacks on this over-tipping thing. So let's talk about the rules and what it is. So, you know, and the E— and EMV also, like, one of, one of the people were saying, well, why can't we authorize the card for a higher amount? And I said, well, that's going to cause a huge problem because you have credit cards and then you have debit cards, right? Right. You don't want to overauthorize somebody's card on a debit— on a debit card. And the other thing, businesses—

imagine doing that to a credit card.

So who cares? It doesn't matter on a credit card. On the debit card, it matters because it's not going to come off. Why wouldn't it matter on a credit card? Oh, because on your credit card you have your credit limit, and when they settle the transaction, it's going to change out the transaction. But on a debit card, you're going to see the authorization, and then you're going to see the different amount for closing. Then the other— the authorization on the debit card might not fall off for 7 days. On a credit card, it could fall off in 24 to 48 hours. So, and a lot of times it just comes right up. It just— they just swap it immediately. You don't see it really. Yeah, most credit cards it's taken care of, but debit does not work the same as credit. The other thing is gift cards, right? So let's say Justin comes into the restaurant and he uses a vanilla Visa gift card. Now I have a lot of restaurants, they will not take those anymore. Or they take them, but they know— the managers know, the waiters know, the waitresses know, everybody knows you can't add a tip, right? Because it's worth $100, it's not worth $120. Oh, and a lot of times you have to be careful. There might only be $50 on the card. Don't just assume, right, that there says $100, that there's $100 on it. So you, you know, you got to be really careful in restaurants with gift cards, whether it's American Express gift card, a Visa gift card. You got to be really careful in restaurants.

And many times owning a restaurant, just, this is like a lot of, you know, it's a lot to be, it's a low profit business. You know, on your toes, you got to be on your toes.

So, you know, they have all these EMV rules and, you know, Visa has a rule, MasterCard has a rule, Discover has a rule. American Express rule, right? So one of the things that changed was in 2017, MasterCard decided to— they reinstated the use of the 20% tip tolerance on non-card-present transactions by merchants. Now, this in restaurants and eating places. So 5812, which identifies eating places and restaurants. So that also caused a huge problem because during the pandemic you have everybody paying with like a QR code, and that's a non-card-present transaction. There's a higher interchange and higher rate. Yeah, and delivery and all that. And you'll notice like on the delivery apps, when those apps first started out years and years ago, the guy would come to your house and you could like add a tip on.

Mhm.

Right now they don't do that. Now they ask you for the tip when you're making the order, like, oh, do you want a tip?

Yeah, why would I tip you if I don't know if I'm gonna get my food?

I don't know, but they have— it's on there.

That's ridiculous, right?

And like with Uber too, the same thing. Like when you go, you can't tip on Uber, can you? Yeah, when you get it, when you take an Uber— that's right, you take an Uber, they go, oh, do you want to leave a tip for the driver? Right? And then if you go look at your credit card bill, they also had problems because they were adding the— doing one— they were trying to do one transaction. So now when you do it, you'll see on your credit card bill, you'll see your— you'll see the ride was $40, and then you left the guy a $5 tip. You'll see another charge for $5 because they tried that, like, added on before and had a lot of problems with that. They changed their whole system a few years ago. Besides the fact that they added 5 gazillion fees, like especially you go in Atlanta, man, it was crazy. There was a— they charged me an airport fee, they charged me a fuel surcharge fee, and they charged me some other fee. I was like, man, that's crazy. And I left the guy a tip. So, man, so, you know, so that's the other thing, you know, when you're doing these non-card-present transactions You got to make sure it's tip at the time of the sale so that you're not trying to add on a tip later, because you can't add a tip to a non-card present sale. You can't do it. There's no adding on a tip. You have to put it in the process of the transaction. And maybe the guy's going to deliver— he go— he's— you're getting a delivery, right?

Right.

And the driver comes and picks up 3 3 orders of pizza and he sees like, okay, Allen tipped $10, Justin tipped $2, and Anna tipped $5. He's going to my house first. I'm getting my pizza first. I got $10.

I mean, if I was driving, that's what I would do.

So you never know, you know, the tipping. But I noticed that all the apps, even if you go pick up food, they ask, do you want to give a tip? You know. And, you know, I don't know what— and also, you know, there's a lot of IRS rules about tipping and all that. I don't, I don't get it.

My neighborhood is so weird, man. Like, no one delivers to my house.

Really?

Yeah. I don't know why.

It's stupid.

If I lived a block east, they would— they were like, yeah, now you're just a block out of our range. But so I don't have any deliveries at the house besides packages. Hello everyone, we'd like to take this time to thank our sponsors Nationwide Payment Systems and NPS Printer. We'd also like to shout out the listeners and everyone that subscribed to our YouTube channel. Thank you for tuning in. If you'd like to reach Allen or myself, head over to B2BVault.info where you'll find two forms, one to contact us and another if you're interested in becoming a sponsor. If you'd like to sign up for a merchant account, click the Apply Now button located at the top of the page of b2bvault.info, where you'll answer a few questions and you'll be on your way to processing payments in no time. The podcast is available on Spotify, iTunes, Pandora, and other popular streaming networks. Thanks again for listening. There's one pizza place that delivers there and it's terrible.

So, so, you know, so there was like, so there was all these tip, tip rules, right? And, you know, and then in 2015, MasterCard announced, uh, they were gonna eliminate the, uh, eliminate the tip thing, but they didn't do that. And it's very complicated. You can't have all these rules for merchants. How are they supposed to know? Oh, this company does 20%, this one does 25%, this one doesn't allow this, that someone doesn't allow that. The safest way for restaurants is to do tip at the time of the sale. If you're writing the tip in, okay, number one, the customer could do a chargeback themselves because they could get the bill and go, I didn't tip $30. I don't remember do that. I only tipped $20. And they could charge back $10, and then you get hit with a chargeback fee of anywhere from, let's say, $15, $20, up to $35, depending on the credit card processor. Okay, and you know, you got to work it out in your restaurant. You got to figure out like, oh, what's going to be the best flow? Is the flow going to be we're going to take the terminal to the table? You know, if you're at— if you're a bar— at a bar, listen, I've one bar over here in Fort Lauderdale. I mean, they literally— they have 3 terminals at the bar. So they have 3 bartenders on busy nights, so 3 terminals. You order your drinks, you're ready to pay, they bring you the machine, you put in your tip, boom, you're done. You sign on the screen with your finger, you're finished. You know, there's ways you can do it. I have another restaurant that we just hooked up and they ring up all the food, goes to the kitchen, they serve. Then when it's time to pay, they bring the bill, and then you go to the front and they have a cashier there. And then the cashier takes your credit card, and then you see the tip.

Those type of places, do they have a lot of people that dine and dash?

Not really. Is that a thing still, the dine and dash? Yeah, it's— just so you know, it's a felony in probably all 50 states.

I'm just wondering because when those— it's like honesty policy for those type of restaurants.

Yeah, I mean, I, I ate it. I used to eat at this one place, they stopped doing it. You would order your food, get it, take it to the table, eat, right? They had a, a cooler with beverages in it.

That's what I'm saying.

Like, right, those type of restaurants, you went over and took your drinks and all that.

There's a lot of those in South Florida.

If you wanted cookies, you went up and took a a thing of cookies. And then when you left, then when it was time to leave, you would just say, oh, I got this, that, blah, blah, blah, blah, blah. And then they would just ring it up.

So there's a restaurant— well, there's a place that I take my wife to, I'm not going to say the name because I don't want it to get popular. It's popular enough. They— it's busy enough. It's a New York spot, like deli breakfast spot. And that's the type of restaurant it is. It's honest, you know, you order your food, they bring you your food, you take your drinks, muffins, chips, whatever it is that you want. And then you got to go up to the, the counter. And they're like, what did you have? And you say, well, I had a breakfast with, you know, potatoes, breakfast sandwich, 2 breakfast sandwiches. And I almost, I almost forgot. The potatoes once, the side of potatoes. And the guy who took my order, he said, don't forget those potatoes. I was like, yeah, you're right, I did. You know what I mean? And so it's just, I don't know, like where I'm from in Milwaukee, they're not doing that.

Yeah, because the place I was telling you about that, that they used to do that, they stopped doing it because, yeah, there was probably like, they probably noticed like, oh, there was a little bit of theft or stuff not getting paid.

They're not like, hey man, we sold all of our beverages, we don't have any beverages.

Now they, now when you go to the or they just have you pay when you're, when you're done ordering your food. You just pay for everything. They go, what do you want for the drink cooler? You take it out. Oh, you want some cookies? You grab the cookies. They put it all on there, boom boom boom boom boom, and then they ring it up. And then you put it— they have a customer-facing screen, you put in your tip. They used to ask you what the tip was. Oh, how much tip do you want to leave? You'd say $3. They didn't really have people serving you, you know, it was like counter service. Yeah, I don't, I don't tip for that. I'm sorry. No, no, I'm just saying, do you— um, depends on how they— how quick they took care of me.

That's true, because it depends.

They're making you your food, you know, depends on the place for sure. In that place, it's a shawarma restaurant, so the guy's like making your, you know, oh, how do you like your shawarma? Oh, boom boom boom boom boom, you know, I took you there.

Yeah, yeah, yeah, yeah, yeah, to that spot.

They make your food for you and they, you know, Now if they're being—

I could see that. I, you know, I tipped that guy, right?

But I'm saying like if you, if you went to a place like that and then they're not giving you like great service, okay, you don't want to leave a tip, you know, right? But I don't even notice. Like I go to some sub— there's like a— I don't eat bread anymore, right? So there was this sub shop down here and it's funny, like you would order your sandwich and then they have a guy slicing the meat and then he basically takes the meat The way they make the sandwich is really cool. No, and the guy throws it to the guy and the other guy catches it in the bread. Uh-huh. It's like a crazy sandwich shop.

But Johnny John's used to do that, something like that.

They used to do that, some similar.

Yeah, they had to stop because they were dropping too much.

Yeah, well, this place, they— well, they're at the same counter, so he just like tosses it over to the guy. It's a cool sub shop.

What's the name of that place?

La Spada's.

It's down here.

Yeah. And then they put— and then they put the meat on the bread, then they make a top, so then they put all your fillings in there, then they put meat on top, and then they tuck it all in with the bread. Yeah, it's amazing. Yeah, with the bread. It's, it's an amazing sandwich. It's, it's amazing. They make the most amazing sandwiches there, that place. And I would go there and get like a giant sandwich for like Sunday. Yeah, that lasts like for the whole You know, at last you have your three— get it in three pieces. You have your first game, the middle game, and dinner. It's like a massive sandwich, but I don't eat that anymore. But I did go there once and I got the sandwich, and then I got it home and I just took the— took it off the bread. It was still very good, very tasty. Put a lot of filling. No, but you got to do—

you—

if you have a restaurant and you're not doing tip at the time of the sale. You need to switch to this. This whole 20% thing will go away, completely go away. You'll never have to deal with it again. Listen, it's a little bit, you know, of training the servers, training the staff. I mean, I even have— I'll give you an example of tip at the time of the sale. We have a tow truck company and they use our texting software, and we program in there, tip. And they— and we have other companies, plumbers, electricians, where they have employees and then people want to tip. They notice during the pandemic nobody's tipping because people didn't have cash on them because they weren't out and about as much. So I told the guy, why don't you just activate— you know, we told— we contacted everybody using that software, hey, there's a tipping feature. Why don't you use it, turn on the tipping feature? And a lot of these places, the employees are much happier because they're getting, you know, tips. I mean, a guy comes to your house, they fix something, right? You want to flip the guy $10, right, or $20. And then if you don't have cash on you, you can't do it. But if you had the tip button, boom, and then it's tip at the time of the sale, right? So the same thing when you go to a rest— and we also notice like When restaurants started doing this, the tips went up. Uh, customers feel more confident in what they're doing. And if you pay by QR code in these restaurants, it comes up, it asks you what the tip is. They don't ask you to write it on some paper, and you have to put it in at the time of the sale. So you gotta get to the, you know, tip at the time of the sale is the way to go. I mean, we— and so, I mean, 2015, when they started out with EMV, became a big thing. Right. Tip at the time of the sale. What we started in a long time ago, but I still have a lot of old school restaurants and they have like— I have one guy, it's very old school. They don't want to do tip at the table, right?

Why?

Because they don't want to change. And the man, the owner doesn't want to put his foot down with the employees, right? So I told them, you don't want to do that, do this. Print out the slip from the point of sale. With a tip line on it. Take it to the table, ask the customer to fill it out. Then take the— you got to go back anyway and run their card, right? You're giving them the bill, but give them the bill with a tip line on it. Have them write the tip down, then go back to the machine, put the card in, make sure the terminal prompts for the add the tip. The server puts the tip in. Now the whole amount is authorized. So there is a workaround to doing it the old way, and that's what you got to do. So I went over to this restaurant, met the point of sale guy there, and I go, dude, just program it like this. Oh, why do I have to do that? I'm like, look how many chargebacks. I'm showing the guy all the chargeback letters. I'm like, come on, what are you kidding me? Like, that's what you guys got to do. You can't do it this way. People are tipping too much money.

Owner was arguing about you? Or the—

no, the point of sale guy's like, oh, why do I have to do that? And I was like, well, they don't want to do that they need to do tip at the time of the sale. You can have somebody come in here and order $30 worth of drinks and leave a $30 tip. They're getting charged— it's getting charged back all the time, and they got 5, 10, 15 of them a month. So just fix the thing. So then the bartenders now know, and the waiters, they hand it to the person with a pen, please write your tip in. They write the tip in and they go over, put it in the computer, and it's all authorized. Guess what? No more chargebacks for tips.

Nice.

On the tipping feature, right? So you— that's what you got to do. Tip at the time of the sale gets rid of all this. I mean, I don't know, we'll tag this, uh, maybe we'll tag the, uh, the newspaper, uh, the TV station in the podcast, right? When we post it out on social media, we'll find the article and tag them in it or something. I don't know, it's from 2021. But hey, anybody, you know, you own a restaurant, maybe you want to discuss this. You don't do— maybe you're getting these 20% over-tipping chargebacks.

I'm sure they are.

You want to discuss it, give us a call. You can book a meeting, text the word book to 954-827-9818. You can book a meeting with me or Justin. We'll go over this with you. Like I said, it's way— it's, it, it's the, it's the easiest way to solve the problem, you know. Either do the workaround method, you have people pay at the front and you use tip at the time of the sale there. You have the terminals, you get the terminals and you get them, or the tablet, and you bring it to the table and you let the customer do it. I mean One of the most popular point of sale systems today is Toast. We don't sell toast. Okay, but Toast is one of the most popular ones, right? It's very popular. We talked about it on another podcast. Over 64,000 restaurants using Toast. Everything is tip at the time of the sale. They either bring the tablet to the table or you go to the front and then you put it in. And when you go to the front, you got to put in your tip on the thing.

I'm gonna have to look, do some research on Toast, right?

So tip at the time of the sale. They don't have a reseller program, so we don't resell that. But every point of sale has some kind of tip at the time of the sale software. I mean, many, many, many of them have that. You have a station for your bartenders, and then the waitresses can walk around with a tablet, come in a protective case, right? Boom, boom, boom, boom, boom. Do the order. They could place the order on the tablet. Person can pay on the tablet, or you have them place the order on them on a machine, and then they can just bring the tablets to the table for— hmm— to pay. However you want to do it, but you got to do tip at the time of the sale. This will stop the whole 20% issue that's going on. And, you know, I thought I would cover that because I couldn't believe there was probably altogether in the— there was a few discussion groups, there's several hundred comments.

Really? Yeah.

And some people were like, oh, why should the business— why should the business have to buy all these tablets and all that? You know, why don't the credit card companies, like the card issuers, send the person like a text message and go, hey, did you mean to do that? Yes or no?

I mean, I agree, but I mean, this sounds like a lot.

EMV was kind of created so the card did not have to leave the person's— didn't have to leave you. That's what it was created for. So no one had to take your card and walk over to a credit card machine. That's more or less what it was created for. So, but you could fix it in old style. Like I said, you can create a ticket have a tip line on it. The customer writes the tip in, go over to the machine, put it— add the tip in, and then it calls out for the whole authorization. So that's easy peasy. Yeah. And then somebody else suggested, why not overauthorize the card? And that could cause a problem too, because on a lot of systems they're not using tokenization, right? So there's no token. So then you have to go take the you got to open the— you're gonna put the card in for a higher amount, but then if you're gonna— when you want to change the amount, you have to put the card in the machine again, unless that, that machine is using tokens. And a lot of times those tokens do not work on changing the amount. So it's not going to work. That's not a foolproof way that would go across every type of system right, across every type of system. What I'm explaining works on no matter who you process your credit cards with, that no matter what system you're using, the workaround method works. The tip at the time of the sale works. There's tons of hardware, software choices out there that are very, very affordable, right? Yeah. And you won't be— you won't have a headache as a restaurant owner, uh, getting these chargebacks. So that's the most important part, like upgrade your tech. We always talk about this, technology is the great equalizer, you know. And think about it, if they're paying at the table, you should get people in and out of your restaurant faster too because they're not waiting for the waiter to go back to the machine. They just come over, it's just so convenient, text the receipt, save on the paper, right? Save money on paper.

There is no paper. I mean, if you— I usually don't get a receipt.

No, no, but I'm just saying you can email or text the receipt with most of those softwares. 99% of them text, email the receipt. Person gets it in their text message, they're happy. They can take it, put it in their QuickBooks or whatever they're doing. So it solves, you know, it solves a lot of issues, and consumers feel much safer not letting their card out of their sight. So that's today's podcast, 20% tip dilemma, right? When people tip over 20%, there's a dilemma. What do I do as a business owner? So we explained it all. What do you think?

I think that you should listen to what Allen said. I think that people should be doing tip at the time of sale. I think—

and as a consumer, what do you think?

Zach, I mean, I wanna, I wanna be able to, you know, I don't— I want it to be— if I want the, the, the server getting the tip, right? So I don't want to find out that I left a bigger tip and you go back to the restaurant and, um, she never got it, you know? So these businesses, these restaurants, you know, get, get with technology, man. It's time to step it up a little bit. I know it's hard to adapt and, you know, embrace change. For the older generation, I watched my father struggle with it. I watched my mother struggle with it. I watched my grandparents struggle with it. So I get it, right? Yeah, I totally understand. Me being in web development for the past 10 years, trying to explain technology to clients and Allen, you know, it's a struggle, right? So it's like, I get it. Like, we don't want to change. We we, we do something every day. That's the way that we've been doing it for since we've been born, you know. We don't like change.

Yeah, well, that's what restaurants tell me. Oh, we've been doing it this way for 20 years. Okay, well, guess what? The rules change, things change.

There's better ways of doing things.

Why? And then, and also, why sit there? Why sit there and complain? Like, I saw hundreds of people complaining about this tip thing. Rest— because one of the, one of the groups was a restaurant owners group, and a bunch of them were complaining about it. And I was like, man, like, I can understand you don't want to spend a lot of money, right? Maybe it's a big expense. You got to call more companies. You got to, you know, find somebody, say, hey, this is my budget, what can you do for me? You know, there's always a solution. There's tons of companies out there. We work with tons of different companies, have all different types of price ranges. You know, the, the, the business for point of sale is shifting to— I think we're going to see a big shift in point of sale to more of a hardware and the software as a service. So people aren't going to have to spend tons of money on— it's like upfront cost to get point of sale.

A lot of that's fairly inexpensive now, isn't it?

Right, but I'm saying is because now there's a lot of companies where it's hardware and software as a service. Oh, I get what you're saying. So if you don't want to make a big capital expenditure and buy a whole—

you're talking about all the other stuff, that to the plugins and extensions?

No, no, I'm just— I'm not talking about that. I'm talking about like when you— like in the— like 20 years, 10 years ago, you had to go buy the point of sale system. Let's say it was— let's say you needed 4 stations, each one was like $7,000 a station. Right now, right, you don't have to do that. Now today there's, there's companies out there that do hardware and software as a service. Sure, the credit card processing might cost a little bit more, but you're not putting out— you're not putting out a, uh, you're not, you're not putting out, um, whatchamacallit, putting out a capital expenditure. You're not taking out a lease. There's other ways to do it. Some people still will buy these more enterprise-style systems, but for the small business owner, small-medium-sized restaurant that maybe only needs 2 or 3 stations or 5 stations, right?

That's why they're so popular.

There's companies that have, you know, hardware and software as a service, so you don't have to have a huge capital expenditure. So it's something to look into if you're on a limited budget, right? You know, you have to look at it. I ask people all the time, like, what's the budget? You know, what's your budget? You know, you gotta— you know, you can have—

and be realistic with me and yourself when you say—

answer me, right? Yeah. What's the budget? And somebody, let's say you got 15 stations in a restaurant, right? Well, you're not going to be able to use a cloud-based point of sale for that. It's not going to work fast. It's going to be very slow. You need a server-based want to say. So everything, you know, is relative to size, the size of the business. But for the SMB market, there's definitely answers. You can do hardware and software as a service. Forget the— forget dealing with these over 20% tip chargeback things. And that's it. That's the— that's the podcast for today. Hope you guys enjoyed it. And Over and out. Listen to B2B Vault. We're available on all the podcast networks like what?

Spotify, Pandora, Amazon, Stitcher, iHeartRadio, Apple, Apple, Google Podcasts. Head over to YouTube as well.

Yep. Check us out. Peace out. Carpe diem. Good luck to everybody.