As I'll be opening a coffeehouse soon, I want to determine a fair procedure for the distribution of tips (both cash and credit card) for the staff. What is the best way to assure that the staff share the daily gratuities fairly amongst themselves? Do you have a formal process, or does the staff just "fight it out" each shift? Then, are they expected to report their tips to the employer for tax purposes? My goal is to make sure that everyone is treated fairly regardless of the hours that they work.

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yeah, me neither... I just don't want those that aren't familiar with tips to underestimate their importance to the working barista.
Brady said:
yeah, me neither... I just don't want those that aren't familiar with tips to underestimate their importance to the working barista.
Hell as a shift working barista AND owner working 60 to 70+ hour weeks I wish I shared in the tips but don't. Every single employee I have makes more than me working way less at this phase of building the business. (Paid ranging from new girl at $8.50 to current high of $10.53 hour plus tips including cc tips.) I did actually pay myself this week for 3 days worked in May! (Only have 4 unpaid days left for May now that it's towards the end of August:-) But I guarantee not a single pay day for employees has ever been late.
What was that sniveling about owner's gouging on soy etc.? Get a grip and write me a check sometime!

I do agree 100% tips are an important part of income in the food service industry here in the US, that's just a fact of life. BUT tips should never be automatic IMO, only merited.
When I visit a coffee house I only leave a tip when the service, food, and drink is above what is normal.
- When the staff is attentive to me (when they look at me - talk more than just taking the order. Anyone can take an order, well almost anyone; that is why they are paid) so many times these days, I get a girl talking to another behind the counter, asking me twice what I wanted or a guy who will not talk or even look at me and I have to stain to hear him (why did they even get hired is a service industry)
- When they make a wonderful drink. – (often times I get a so - so drink; I don’t go back to give the tip) Oh yes, I do not give tips until I finish my drink then I go back and give the tip is one is to be had.
- When the person is kind and thoughtful – will go-out-of-there-way-for-you – I need not say anymore.
- I can make a great drink at home – better than any shop in Moncton – so when I’m out I want something that comes close. I treat guest better than I get treated at most of the shops in town. This is so sad.


Arno Kamphuis said:
I really do not understand the US way of tipping. Why, Why, Why do you tip?? As a customer, stop with the tips, and just pay for the drinks. That is what you want, right? The service is there so that you will actually buy the drinks in that shop, and not somewhere else. So just by actually going to the shop/bar is enough to say that you like the service.

In addition, the employer/owner should pay the employees a fair amount of money for the work they do. As an employer, just raise the prices of the drinks by 10% and give this money directly to the employees. This would be much easier, and much more fair to everybody (including customers).
You know, I agree (well, besides the last point... unfortunately I don't have a GB/5 at home). I think its weird, and sort of snarky, that a customer has to throw down a tip before they even get the drink. At the same time, if its a return customer, and they're used to getting perfection, thats different. But I see new customers that will order a few drinks, lets say $8 ticket, and throw down 2-3 bucks in the jar... without knowing whats coming. I would much rather have someone come up all super happy about their drink and then tip, but then again, thats not the culture for cafes, unfortunately.
Really? I mean REALLY?

Here in the U.S. we work in states that sometimes diminish our wages based on the fact that we can earn tips. Yep. It's meesed up. In Florida, where I first started pouring coffee, I was making $2.70 an hour.

Think about what you are saying. Your tip is a socially accepted norm. It helps employ workers for businesses that are nascent or small. In this country, without tips, the only way to live as a barista would be to work for a corporation that can't focus on community and quality the way your neighborhood shop does.

Here's how I roll: If you get me something and don't piss me off, I tip a dollar. If you pour me an exquisite drink I come back again and tip another. Hell, if you open me three beers I tip three dollars.

I don't understand this stingyness and idiocy.

Steve MacDowall said:
When I visit a coffee house I only leave a tip when the service, food, and drink is above what is normal.
- When the staff is attentive to me (when they look at me - talk more than just taking the order. Anyone can take an order, well almost anyone; that is why they are paid) so many times these days, I get a girl talking to another behind the counter, asking me twice what I wanted or a guy who will not talk or even look at me and I have to stain to hear him (why did they even get hired is a service industry)
- When they make a wonderful drink. – (often times I get a so - so drink; I don’t go back to give the tip) Oh yes, I do not give tips until I finish my drink then I go back and give the tip is one is to be had.
- When the person is kind and thoughtful – will go-out-of-there-way-for-you – I need not say anymore.
- I can make a great drink at home – better than any shop in Moncton – so when I’m out I want something that comes close. I treat guest better than I get treated at most of the shops in town. This is so sad.


Arno Kamphuis said:
I really do not understand the US way of tipping. Why, Why, Why do you tip?? As a customer, stop with the tips, and just pay for the drinks. That is what you want, right? The service is there so that you will actually buy the drinks in that shop, and not somewhere else. So just by actually going to the shop/bar is enough to say that you like the service.

In addition, the employer/owner should pay the employees a fair amount of money for the work they do. As an employer, just raise the prices of the drinks by 10% and give this money directly to the employees. This would be much easier, and much more fair to everybody (including customers).
Joshua Dommermuth said:
Really? I mean REALLY?

Well, paying 2.50 euro (3.50 US$) for a double espresso I am not going to tip. This price is high enough for the shop to pay the baristi a reasonable wage... and 2.70 US$ per hour is way, way too low! Say, 10 US$ per hour (6.50 euro) would be much more reasonable, or even higher. I would not expect my baristi to work in my shop with that low an income.
i think it is absolutely inappropriate to take a percentage out of your barista's tips to cover your credit card processing fees. your baristas shouldn't have to pay for your business systems. also, customers tip your baristas because they think that barista is super...i think most customers would be offended if they found out your company was taking part of the barista's tips.

i used to work at an upscale restaurant that had a few...let's say "questionable" business practices but when I found out that they were taking a percentage from MY tips, i was LIVID.

i think this is a terrible idea, but if you decide it's what you want to do you should DISCLOSE it to your potential employees during the interview process. people should know what they are getting into before they start their first day of training... i didn't find out the restaurant was doing this to me until 6 months in to it.

stephanie crocker said:
We are so stupid! Our register has been off like up to $40 every day and we JUST figured out that duh! it's because our employees are pulling the credit card tips out of the register. What's weird though is when our register is NOT off...I guess that means we're ripping off the customers?

Anyway, we need to crack down and get in control of this whole tip/register thing. Reading this post has helped me start to figure out a procedure. My baristas have never really given me a straight answer about what they are making in tips. I sort of need that info to attract new baristas.

I will probably contact my credit card vendor and see if there's a way to generate a report of the tips for the day and have the employees record what they are taking from the register so we can see if THEN the register will balance.

I know I know, it's our first year though and so late to be figuring out these details. I wish we would have done this sooner!

Also, I wanted to get everybody's take on the whole credit card tips thing...we are paying fees for credit cards, AND taxes(because they are reported as OUR income). I think it was mentioned that we would take a percentage out of their credit card tips to cover those costs, right?
As the owner, I don't take any tips either, unless I'm working alone.

We leave tip distribution largely up to the employees, who have decided to divide the tips at the end of every shift, or whenever another barista comes in the middle of a shift.
IMO:

when you tip a barista, you are not just tipping for the cup in your hand, you are tipping for the quality of experience you are having. It is up to the barista to provide customers with an outstanding experience, rather its through playing great music, keeping up banter and smiling through a bad day, providing a consistent and excellent product and responding well to feedback. For me a tip is a way to show that you are aware and appreciate the work and service you are receiving. If you are going to complain about gratuity, that's fine, go use an automatic coffee vending machine and see if there are buttons you can push for empathy and an extra dry cap.

enough said....
Bringing this thread back to life ... for those of you who are shop owners out there and allow your baristas to split the tips themselves (i.e. no pooling, no owner involvement), is there any need to include those tips on the employee's W-2 at the end of the year?  I realize each employee would have to tell the show owner what the tips were on a weekly basis.  I read the IRS publication referred to on page 1 of this thread which deals with employer tip reporting, but it does not apply to the small coffeeshop owner due to being under the 10 employees/80 labor hours a day.  I am thinking that if the employer is NOT involved in tip splitting, its up to the employee to report (or not report) tips to the IRS, and the employer has no other responsibility.  BTW, I am starting a new coffeebar soon, so I haven't dealt with this in real life yet!

May 2011 federal law changed regarding tips. If you do not know what is says you better read it and change your practices if you haven’t already complied to the new laws.

If the Labor Dept. does an audit on your labor wages and tips practices and finds you have not abided by the law... you will be paying 2 years back wages for tips not distributed properly plus they can fine you as well. If you do accept CC tips then a CC processing fee for the tip portion only can be deducted from the tip amount to cover the cost of the processing ... unless it takes a ’tipped employee’ below minimum. Nothing can take a tipped employee below minimum. There are totally different laws regarding ‘tipped employees’, wage employees, managers and owners. Know your laws! Federal and STATE!!!

We kept asking our accountant are we ok, is our policies ok with labor laws... they didn’t even know it had changed.

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