Tip at time of sale vs adjusting
In recent years, more and more merchants are moving away from the traditional method of adjusting tips and instead incorporating handheld devices where customers can select the tip themselves. This shift is driven by a number of factors, including the desire to reduce errors and improve the overall customer experience.
One of the primary benefits of using handheld devices for tipping is that it eliminates the need for merchants to manually adjust the tip amount. This can lead to fewer errors, as the customer is in control of selecting the tip amount. Additionally, if there is an error, the customer cannot blame the merchant for adjusting it incorrectly, as it was the customer who made the mistake.
Another advantage of using handheld devices for tipping is that they allow for the display of different tip options. This can encourage customers to leave larger tips, as they are presented with a range of choices. Furthermore, for customers who may not be familiar with the type of establishment or what is expected in terms of tipping, the handheld device can provide guidance and help ensure that an appropriate tip is left.
On top of all this, using handheld devices for tipping also ensures that the authorization amount and the settlement amount are always the same. This is important because some issuing banks are now penalizing merchants who still adjust tips by charging back transactions where the settlement amount is over 20%. This can lead to a loss of revenue for merchants, which can be avoided by using handheld devices for tipping.
Overall, the move towards using handheld devices for tipping is driven by the desire to improve the customer experience and avoid potential losses in revenue. By giving customers the ability to select their own tip amount, merchants can ensure that the transaction is handled accurately and efficiently and that their business is not at risk of being penalized by issuing banks.