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Supporting the service industry: how to set up a virtual tip jar

Tip jar
Photo by Sam Dan Truong

Even as businesses physically reopen, many employees are still reeling from the impact of the Coronavirus, which continues to slow down our return to a “new normal.” The service industry is hit particularly hard—from bartenders to aestheticians—who are struggling to make ends meet and will likely continue to have a hard time even after going back to work. 

To help these service industry workers get back on their feet and dig out of their financial setbacks, many businesses, owners, and management teams are creating virtual tip jars—a setup that is both easy and impactful.

1. Choose a platform

There are two main ways to consider collecting funds for a virtual tip jar. You can either collect tips in one central place for later distribution via a platform like GoFundMe or PayPal, or you can be more of a facilitator and add your employees to online tip jar lists, which have been gaining popularity on both national and local levels as people seek to support their favorite service workers.

To collect the funds in one place, consider the following:

  • Start a GoFundMe page.
  • Create a PayPal “donate” button using your PayPal Business account. You can then add the button to your site, Facebook page, etc.
  • If you have a blog, check to see if your publishing platform offers a fundraising option (for example, Stripe payments are offered through WordPress).
  • Collect funds through one Venmo account.

If you would rather serve as more of an organizer, research the tip lists that are relevant to your business and employees. Many of these lists are simply shared online docs that display a worker’s name, place of business, and payment service username—like on Venmo or PayPal—so that donations can be easily made from anyone, anywhere, anytime. 

We suggest you ask your employees for permission to add their names on their behalf, or you can simply do the research for them so they can add themselves if they want to be listed. 

Lists range from being hyper local to international, so you can add staff to as many databases as are relevant. Some examples include:

  • Virtual Tip Jar
    This database covers the US and parts of Canada and breaks down to the city level. If your city is not represented, there is a link that you can click to create your own city’s list. Then submit it for approval, and it will be added to the database. You can easily add employees to the list along with their PayPal information or Venmo username.
  • Help Your Local Service Worker
    This tip jar allows users to search by city and then tip a random worker within that city. It takes payments via Venmo or Square’s Cash app.
  • Pittsburgh Virtual Tip Jar
    This local tip jar has “randomizer” functionality to help keep the distribution fair and unbiased. Users can choose how many random tip options they want to consider—specific workplaces can be chosen too—and it will randomly display employee names, where they work, and a link where you can send them a tip.
  • Laramie’s Virtual Tip Jar
    Out of Laramie, Wyoming and hosted by the Laramie Chamber Business Alliance, this tip jar encourages community members to donate to restaurant workers any time you enjoy your own coffee, alcoholic beverage, or hot meal at home. 
  • Start your own tip collection sheet
    Because many of the sites above are simply using shared, table-based docs, you can easily launch one specifically for your own employees. To help you get started, here is a template that you can make a copy of and customize for your own business and staff.

2. Spread the word

Celebrate the donations you receive to help encourage future donations. We also recommend that you be transparent as to how you’re going to use and distribute the funds (more on that next).

  • Add it to your website—we recommend a special banner, overlay, or pop-up to draw special attention.
    • AddThis—a free tool from Oracle—allows you to add a clickable button to your blog, website, etc. and link your users to payment platforms like PayPal, Amazon Smile, Patreon, Venmo, and Square’s Cash app. 
  • Post it to all of your social media and review platforms, and pair it with your other COVID-19 updates like hours of operation, takeout/delivery/curbside pickup options, etc.
  • Ask your employees to share it on their social sites.
  • Submit it to local news outlets.
  • Share with other businesses in your area and offer to do the same. You can even consider combining your self-created lists and add multiple tabs to represent each participating business in your community.

3. Decide how you will distribute the funds

If you set up your virtual tip jar in a way that donors can send money directly to your employees, then you don’t need to determine how to share out the funds. But if you’re collecting the money for your entire staff in a single place like a GoFundMe page, you’ll have to decide how the money will be distributed. Ultimately the choice is yours, but you should be honest, fair, and transparent. Consider talking to your employees about what they think, and connect with other businesses to see how others in your community are doing it. Once you’ve made a decision, be sure you’re clear about your intentions in all your communications.

4. Consider making your virtual tip jar permanent, even after you reopen

Even after reopening, it will take a considerable amount of time for employees to get back to a normal level of income (and even longer to reach a normal financial position), so the longer the support can continue, the better. A virtual tipping option also serves as a way for patrons to virtually tip if they don’t have cash or if they later reflect on a great customer experience and want to send a little extra cash to a deserving employee. Consider putting a “Virtual Tip Jar” sign with a URL next to the register or printed at the bottom of receipts to keep the option top of mind for guests, especially as foot traffic picks back up.

Consumers are eager to help small businesses and their employees survive—whether it’s to throw a shot back with their favorite bartender again or so that their stylist can take care of roots gone wild—and virtual tip jars are one of the many ways that members of the community are making it happen.

*Yelp is not affiliated with the virtual tip platforms referenced above, and we therefore can’t speak to their processes, operations, or compliance with the law. Tax laws and reporting obligations relating to tipping and donations can be complicated. Please consult an attorney or other tax professional for more information.