Tipping in The Flower Business: Should Florists Ask For Tips?
Over the past few years tipping has become increasingly widespread. Consumers are tipping – and being asked to tip – in situations they never have before.
That puts retailers in a bit of a dilemma. Asking for tips can seem like a way to increase employee compensation without increasing labor expenses – very helpful when workers are hard to find.
And since your employees are themselves being asked for tips everywhere they go it's understandable that they might want to get in on the action.
So the reasons why a florist might want to start asking for tips are pretty clear. But what are the implications they need to consider?
Tip Fatigue & Customer Alienation
As much as everyone might like the idea of receiving tips, people are increasingly less enthused about giving tips in places they haven't before. Tip fatigue is real.
Two-thirds of Americans have a negative view about tipping, according to a recent report by Bankrate, particularly when it comes to the contactless and digital payment prompts that have popped up nearly everywhere since the Covid pandemic. The trend is also referred to as “tip fatigue.
A recent survey in the Wall Street Journal showed that more than 80% of people were comfortable paying tips on a table service meal, while less than 18% were inclined to tip a retailer that simple rang up a sale. Your customers are not going to be inclined to tip on simple "cash & carry" type retail sales.
Neither of these examples translate exactly to a customer that is placing a delivery or pickup order, or requesting something custom, but they are useful in that they represent the extreme ends of the spectrum.
A better comparison to placing an order for flowers might be ordering a meal at a counter (in both cases the customer is working with an employee on the details of something that will be prepared to their specifications), where only 44% of those surveyed were inclined to tip.
Meanwhile roughly one third of those surveyed believe that tipping culture is out of control.
Put it together and it and no clear answer emerges. Asking for tips will likely appeal to about 44% of your customers and annoy approximately 33%.
The other wrinkle in floral retail is that the tip has to be solicited before the product/service has been provided. This has traditionally felt a little strange to consumers, but it has definitely become more common over the past several years.
Collecting Tips In The Flower Business
This can seem like the easy part, and in the case of a business that can just put out a tip jar it is pretty simple.
In retail floral however most business is done over the phone or on ecommerce websites, and these days even in-person sales are less likely to involve cash. A florist that wants to collect tips needs to be prepared to do it on credit/debit card sales.
That means that there is a trail, and that money has to be accounted for...
Accounting For Tips In A Retail Flower Shop
Restaurants are accustomed to dealing with tips, florists are not. These are some of the questions you need to consider:
- Do tips count as revenue?
- If so are you tracking the expense of paying out the tips?
- Are tips subject to sales taxes?
- If so are you applying sales taxes to the tip, or backing the sales tax out of the tip?
Distributing Tips Between Flower Shop Employees
Once a flower shop is able to collect and properly account for tips and gratuities the next challenge is distributing them fairly among the various employees. Everyone in the shop is going to have their eye on that pie and it needs to be sliced up very carefully.
Just some of the things you need to consider when it comes to allocating gratuities in the flower business...
- Position/Title: Does the ownership and management get a share of the tips?
- Hours Worked: Can a part-timer that works three hours a day expect the same share as a designer that works eight hours?
This is where things can break down very quickly. Let's say a small shop collects $15 in tips over the course of a day. A share of that could be significant to the employees, enough so that they are going to want transparency on how it gets divided up.
Actually doing that can be very time consuming for management. We have seen cases where the time management spent trying to calculate tip distribution exceeded the amount of the tips being distributed.
What Can A Florist Realistically Expect From Tips?
Based on our experience with clients soliciting tips over the past few years the most important thing is to manage expectations.
If you introduce a tipping program with the expectation that it will help solve your staffing woes you will likely be disappointed. If your employees expect that it will provide a meaningful boost to their income during a period of high inflation they will almost certainly be let down.
But if everyone approaches the prospect of some tip money as a bonus, a pleasant surprise, and an incentive to provide outstanding customer service it can be very effective.
Implementing A Tip Program In The Flower Business
If you have decided that you want to solicit tips in your flower shop the next step is to make sure you have a flower shop management system that will help you every step of the way.
FloristWare can help – it includes powerful features that make it easy for florists to collect, account for, report on and distribute tips.