Tip distribution software, also referred to as tip pooling or gratuity management software, automates the process of tipping out service industry workers at the end of their shifts and reduces the need for physical cash payouts. Most commonly used by restaurants, these tools eliminate hours of manual labor by tracking the number of hours worked and automatically distributing tips to workers’ bank accounts. These tools reduce payroll burden and instances of tip disparity due to an error or theft and expedite the process of paying out tips to employees by connecting securely to their bank accounts or debit cards. Additionally, most tip distribution software allows managers to handle tips across multiple locations and utilize reporting features to mitigate risks.
Tip distribution softwares are commonly sold as point solutions that integrate with restaurant POS systems or restaurant management software or related tools for other hospitality business types, but may also be bundled into a larger platform’s functionality.
To qualify for inclusion in the Tip Distribution category, a product must:
- Track shift hours of each employee and maintain records
- Connect to point of sale (POS) systems or be offered as part of a larger POS platform
- Allow employees to connect bank accounts or debit cards and securely deposit tips to these accounts
