Tipping Jar on Front counter?????

I have been out of town for a couple weeks, I get back into the shop and notice that there is a Tip Jar

I don’t like the idea but am wondering if anyone allows it or not and reasoning


Didn’t like it at first, and If the customer tipped the lucky cashier got the money. Now we split it amongst all insiders by hours worked in their paycheck envelope. People like to tip, let 'em

Back in the day when credit cards had to be signed I had a cup full of pens on the counter. Every day there was money in it so now I have a tip jar. The tips are divided up based on the percentage of hours worked.

Our tip “jar” is a number 10 can. Tips are split by the kitchen/counter staff. Split once when the first couple of people leave after the rush and again at the end of the night. Every carry-out place in town has them except Macdonalds. (including Starbucks) Nobody is bothered by it.

Most of our sales are paid by CC and tips on those sales are paid on the paycheck. If the ticket is a carryout the tips are paid to the inside staff in proportion to the number of hours worked during the pay period. Driver (tipped wages) tips go exclusively to the driver that got them.

Be careful , My state tax agency showed up 2 months ago and was giving me a hard time about it and asked for records of it on where and how it’s allocated

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Here is the IRS rule on who must report: https://www.irs.gov/pub/irs-pdf/i8027.pdf

Read the section on pages 1-2 on determining if you must file a report. I ran through this and came nowhere near the reporting requirement.

The jar seems to be somewhat unnecessary. At our newest location we’ve hit 400 dollars (yes, four hundred) in takeout tips in one day, without a jar. I was completely blown away by this as I’ve never witnessed it before. Our other location has a jar and it’s lucky to see 100 in a day…

We are now “No tipping allowed” because we had a tip jar, if the tips were not stolen by customers (yes, seen it happen) the cash was disbursed evenly among all hourly staff. Come to find out that it is a felony to do that.
CC tips became a problem with multiple cashiers and CC tips being assigned to the person who may not have done the work to book and get these large orders out the door
So no tips allowed whatsoever, Customers are instructed to not tip, there is no tip line on CC receipts either, but if money is left, there is a jar for the local dog park that the money gets donated to, or I stick it into a large piggy bank on top of our exhaust hood, and we do company outings, last week I rented a go-kart track for an hour, and we went full retard at the track with ice cream afterwards.
We do add a 15% “Service Charge” to all items, and that goes to all hourly staff since we/they are a team. This allows these guys to see pay rates no less than $15/Hour for entry level dishwashing jobs, my cooks are mid to upper $20/hour.
This has been really great for all involved, I have been trying to devise a way to make sure these guys get a full days worth of pay if we happen to sell out in a few short hours and they only work for maybe 4-5 hours/day, and this solved that problem too. The busier we are, the more money they make. The days we are not busting our hump as badly, the do not get rewarded as much.
One guy was very skeptical about our “Fair & Equitable Wage Program” , that attitude quickly changed after the first pay period.
The charge shows up on the customer receipt as EWP

How does the customer handle the “no tip” thing? I mean, in theory they are now forced to pay what some might consider the same thing as a tip, right? Since the service charge is required now as opposed to what wasn’t before?

First & foremeost, It’s not a tip,
99% think it is brilliant and a few people cannot seem to wrap their head around it.

I could have raised prices by 15% to cover the labor costs, but then we are in the same boat with not being able to disperse tips among all hourly staff, so legally this is the only way we could pull this off.
And I feel it is better to be out in the open with the program than trying to hide the charges in our pricing.
Everything is explained by use of flyers posted at multiple spots at the entrance, and at the counter,