[May 7, 2021 – Sandra Hess, DTC Wine Workshops Expert Editorial]
Greetings wine industry friends! I have been asked to develop an article best approaches to developing tasting room tip policies. This question has come up quite often during the past five years as we have helped winery teams across the nation get set up with Mobile POS and reservation-style tasting experiences. While there aren’t any “one size fits all” practices there are some principles and guidelines that I hope you find helpful in developing tipping policies for your respective tasting room team. Reach out should you have questions or want to develop an updated Hospitality Team Incentive Program.
First, it’s important to start with WHY when deciding whether or not to turn on the tip line in the Mobile POS interface.
The most common reasons winery stakeholders decide to turn on the tip line in the Mobile POS view is in response to customer requests, and also to retain more advanced level tasting room hosts in this very competitive space across the nation.
If your Hospitality Manager hasn’t already started to keep track of the number of weekly requests received from customers who wish to tip, now is a good time to. If more than 30-40% of visitors request to tip using a credit card, then it is probably time to turn on the tip line. Otherwise, visitors will leave with a sense of dissatisfaction for not being able to thank their host for a luxury visitor experience.
The most common reasons why winery stakeholders decide against turning on the tip line is concern that long-term loyalists will be turned off, the possibility of guests spending more money on tips/experience fees and less on wine and lastly, the fact that tips have to be reported separately from wages for tax purposes. I am not a tax or legal expert but do advise winery owners and payroll managers to research the latest laws by State as in some regions outside of California, the hourly wage needs to be adjusted if an employee receives tips. So, with all of that said, there are some ways to find a fair balance here.
- WineDirect, commerce7, and other Mobile POS providers allow the admin to turn on or off tip lines by “POS Profile” which in most cases means the visitor space. If your visitor center has a dedicated space or club lounge for members, the tip line could be turned off for this room. This would resolve the concern about turning off long-term loyalists. In addition, most DTC Wine Workshops clients turn off the tip line at the Tasting Room Bar POS Profile as a luxury visitor experience isn’t usually deserved in this environment. This is typically more of a relaxed wine tasting to introduce the wines and winery story to new visitors. The goal here is to invite qualified first-time visitors back for a seated, reservation-style tasting experience or tour where we typically see the average order values 3-4 times greater than walk-in tasting transactions.
- Tasting Room Hosts can be trained to skip past the tip line when completing the transaction on behalf of the guest using the Mobile POS device. This makes sense if the host knows they are serving a family member, employee, member of the press, etc. where your wine brand is extending a complimentary tasting experience. Also, when hosting club member events where bottle or glass sales are offered, be sure to turn off the tip line as this is an appreciation event. If any of these types of guests ask to tip, the manager could create an open Tip SKU where the custom tip amount could be added in a second transaction.
- When guests feel that they have received a luxury experience in fine dining restaurants, resorts, and tasting rooms, they usually want to tip the host as a way of saying thank you. I encourage winery stakeholders to turn on the tip line for the Experience Space POS Profile where seated experiences at 1-1.5 hours are offered. If the tipping interface looks too bold or obvious through your current Mobile POS profiler system, then ask about custom development options. Does the provider offer open APIs for the Mobile POS solution where a developer could design a more on-brand and luxury style interface?
Next, you will want to meet as a group to decide if the above guidance will work for your unique environment and business goals.
If you decide to implement some of the above best practices and test out tipping policies at your visitor space, be sure to take time to analyze the percentage of transactions where a tip was provided against those without a tip to ensure the majority are indeed tipping. If after three months, the majority of guests do not tip in the seated spaces, tours, etc. then you might not be in the best position to turn on the tip line just yet.
Today, many advanced level tasting room hosts are coming from fine dining and luxury hotel spaces where tipping was an important part of their annual income. If your visitor center is seeing more staff coming from outside of the industry, then it’s time to either build higher levels of commission payouts into their compensation package for ultra-premium/allocation-only wine brands OR turn on the tip line. Where the tip line can go wrong is if hosts are more motivated to work for a tip than connect with visitors, sell wine and invite back to form an ongoing relationship. If your hospitality team is currently losing key members of the visitor center because of compensation issues, we can help you develop five or more conversation paths that are trackable and lead to long-term sales success. Going beyond wine club sign-up and case sales incentives is key in retaining visitor center employees.
So, have you decided YEA or NAY? Drop us a line HERE and share your experience implementing the above tips or reach out to get your online coaching program scheduled. Cheers!