Knowing how and when to implement automation is a hot topic for businesses aiming to keep pace in the face of rising economic challenges.
While it is liberating for business owners to offset tedious tasks and make time for other matters, there are some areas where automation may be a step too far.
The rise of automated tipping requests is dividing opinion, so businesses should consider the impact on their finances before opting to integrate this into their operations.
When does automation go too far?
There are some businesses that are successfully implementing a wide range of automated systems to achieve more with smaller teams or offer higher value work for clients and customers that better engages the expertise of their staff.
This is mostly seen with Business to Business (B2B) companies who can be somewhat safe in the knowledge that automation will be mirrored by the people they work with and seen as mutually beneficial.
Business to Customer (B2C) transactions are more complicated, as while businesses may benefit from automating interactions with suppliers, the customers themselves may have a different view on the matter.
The UK does not view tipping in the same way that many other countries do and the opinion on when and how to tip, if one is to tip at all, varies dramatically across the population.
Yet the presence of tipping in other countries is resulting in the mass expansion of the behaviour here, as technology designed in regions where this is more standard is designed to have tipping options be part of the transaction by default.
This means more customers are being met with preset requests to leave a tip, potentially affecting the revenue of the business that uses devices or technology that have this option enabled and do not consider the full impact.
Is automated tipping bad for business?
There is no universal rule for whether automated tipping is good or bad for business, as each company’s unique service and relationship with the customer base determines how well received the request will be.
As tipping is still somewhat unusual, transactions that involve very little direct interaction between a customer and employee are likely to be seen as inappropriate places for tips to be requested.
If a customer does feel annoyed, they may take it out on whatever employees they do interact with, possibly creating an unsafe environment.
A business must also ensure that any tipping, automated or manual, must be managed in accordance with the Employment (Allocation of Tips) Act 2023.
This means that all tips are the property of the employees and must be distributed fairly by following a company agreement that is signed by the employees and managed by the dedicated troncmaster.
Unlike in other countries where tipping is more common, tips cannot be used to supplement wages, meaning the legal minimum must be paid, but they do need to be processed through payroll.
There are some businesses where having the automated option is an asset as it removes a level of thinking and deliberation for customers and could see your staff net bigger rewards for their work.
Understanding your customers is something you are best positioned to do, but knowing your financial position can be equally vital when making decisions about pricing, tips and rewarding employees.
Our experts are on hand to review your current position and ensure that your processes are fully compliant with the latest legislation.
Armed with this knowledge, you can decide whether to leave the automatic tipping requests enabled or find an option that better fits your style of business so that you do not risk alienating customers and limiting growth.