TipJar Is a Nightmare for Hospitality Workers

Hospitality workers have reported receiving fewer tips and delays in tips being paid out after the companies they work for introduced the third-party tipping app TipJar.

One worker at a BrewDog bar said his tips had declined by about 50% since the bar chain, whose former managing director founded TipJar, introduced the service during Covid-19.

“It’s gone from about £80-90 a week in tips to about £40 a week,” said James, an hourly-paid duty manager who asked that we use a pseudonym. “Tips made the job. It’s still a rubbish paying job, but they made it a little bit less rubbish. You can’t rely on tips anymore.”

A tidy commission.

TipJar offers various methods for customers to tip. For “tronc” tips – a system where 100% of tips are distributed among staff, and which make up the majority of TipJar’s business – there are no fees for either staff or tippers, with employers covering TipJar’s fees (either £30 or £60.50 a month, depending on the size of the organisation). But the company charges a 4% commission, plus card fees, on its QR code, digital link and “tap to tip” payment options (in a call with Novara Media, the company’s CEO Ben Thomas said “that’s a very, very small part of our business now”).

While TipJar says customers can cover these fees – and they do, more than 98% of the time – some may see a charge for tipping and choose not to tip, or tip but opt out of covering the fees, meaning the worker receives less money.

“For TipJar to charge commission on the hard-earned tips of minimum wage workers is not just morally repugnant, it may be unlawful under the new Tipping Act,” said Bryan Simpson, lead organiser for Unite Hospitality. “For TipJar to profit from the tips of some of the poorest workers in the British economy is a national scandal.” In an email to Novara Media, TipJar’s lawyers said: “Our clients scrupulously comply with all of their legal and regulatory obligations.”

TipJar bills itself as the UK’s leading cashless tipping platform and it is used by chain restaurants such as Domino’s Pizza, Honest Burgers and Franco Manca. It also offers tipping via QR codes, used by small businesses and individuals such as buskers and street performers. “We exist to help empower tipped workers with instant access to their tips, financial security, unrivalled transparency,” its website claims.

Founded in 2019 by former managing director of BrewDog Bars, James Brown (the BrewDog Bars and BrewDog Beers brands are owned by the same company), TipJar also claims to help companies to conform to new laws around tipping, which came into force in October.

TipJar says it now obliges customers to cover its fees in line with the new Tipping Act. However, this only applies to its “tap to tip” option – tipping by QR code can still see workers lose out on tips if the customer decides not to cover TipJar’s fees (though the company’s lawyers said that less than 0.05% of tips collected via its service are via QR codes).

“There were people that missed bills.”

As well as noticing fewer tips, workers have also reported delays in being paid their tips. James said a recent rota issue meant tips were not processed correctly by TipJar, which resulted in a delay in tips being paid out to staff at the bar.

“It meant that people were missing out on money that they needed that just didn’t come into their accounts for about three weeks,” he said. “There were people that missed bills. There are people that have children. It was like a really big stress for people and TipJar barely did anything to expedite the process at all, to be honest.”

Phillip is another member of staff at the same BrewDog branch as James, and also requested we use a pseudonym. Speaking to Novara Media, he said that when he joined BrewDog in 2021, the company paid the real living wage and he did not have to rely on tips. He said that since it dropped the real living wage amid trading losses (new hires are now put on the legal minimum wage), he had been forced to use a food bank because of delays in tips being paid out.

“I often wait for TipJar to come through before I can do my food shop for the week. However, on multiple occasions my share of the tips have been late by days or weeks entirely,” he said. “I’m fed up with having to rely on ‘donations’ from customers.”

James, who has worked for BrewDog for about six years, said there had been no delays or deductions to his tips prior to TipJar being introduced.

TipJar’s lawyers told Novara Media in an email that the company couldn’t legally disburse tips until the employer had provided it with the requisite data. They added that the company had recently introduced a feature to its app that allows workers to monitor the progress of tip splitting.

“By comparison,” they wrote, “conventional tip processes where tips are paid on payroll take anywhere from 4 weeks at best to 10 weeks at worst. In the rare situation of delay, our clients are significantly faster than the existing alternatives.”

“We try to move the tips as fast as humanly possible,” Thomas said over the phone. “I can’t really comment on those specific situations.”

Reviews of TipJar on Trustpilot, including by workers at companies that use the company’s services, report similar issues. There are also reviews from TipJar customers bemoaning the hefty fees it levies on tips.

“I had tipped £3 on one of their machines in a restaurant. However, it seems I was charged £3.25. It shouldn’t be the customer paying for admin fees to tip,” reads one review.

Staff at the pub chain Fuller’s said they were anxious as their employer prepares to switch over to TipJar.

Multiple Fuller’s staff Novara Media spoke to said they were concerned about losing out on income from tips as a result of the switch, and reported that in online meetings about the switch, TipJar said there would be a 49p charge on tip withdrawals from its app after a monthly limit on withdrawals is reached.

TipJar confirmed that it does charge users a withdrawal fee after their free limit of four withdrawals per month is reached. TipJar’s lawyers told Novara Media: “For the past 5 years our clients have never charged a single payout fee for staff withdrawing tips,” though “recently our clients have had to introduce a limit to free withdrawals.” They added that “our clients will always grant additional free withdrawals in special circumstances such as on compassionate grounds or if a user has an emergency.”

Cashless tipping is growing in the UK, with recent research from contactless payment company SumUp finding a 100% ­increase in the number of businesses using the tipping function on their card readers over the last year. Critics argue that the shift to cashless payments punishes marginalised groups such as sex workers and homeless people, who often rely on cash.

For hospitality workers, while tipping may be a welcome financial boost in often low-paid roles, it can also result in employers keeping wages low and force employees to rely on customer philanthropy. Some have called for the practice to be abolished altogether.

“Unite Hospitality are quite clear that workers should be paid enough to live on without relying on tips,” Simpson said. “However, where tips are provided by customers, 100% should be distributed fairly and democratically according to a policy determined by the workers who earned the tips.”