Web Exclusive: Tipping moves from cash to contactless

The process of tipping a hotel employee for a job well done has moved to the digital age with companies such as TipYo and youtip. The digital platforms use mobile apps or QR codes that enable guests to give any tip they’d like.

Brian Walsh, founder, TipYo, said that one of the main reasons to create his platform was because there were limitations on cash usage when attempting to hand out a tip.

“Let’s just say I’m the type of guy that wants to leave $20 for a housekeeper,” he said. “If I had only a $1 bill, that’s all I could leave. If I had a $20 bill and I want to leave $10, what’s the solution to that? Do I run to the ATM?”

Doug Miles, cofounder/CEO, youtip, which recently was named Most Innovative Startup of the Year at the Phocuswright Conference, pointed out that the use of cash had been declining long before the pandemic, when contactless solutions were necessary, and “tipped workers felt the resulting pain.”

He added, “Those workers acted rationally and tried to fill the void left by cash with consumer P2P payment apps. That helped, but these apps were a mildly helpful, awkward workaround at best. The need for a digital alternative to cash didn’t have to be contactless, but happened to be contactless. Fast forward to 2020 when the world was told not to touch anything, well, then contactless payments in general, along with tipping, skyrocketed in importance.”

Youtip works primarily by QR code. When guests scan a code, a tipping screen will appear on their mobile devices.

“Our QR codes are custom designed to enrich our clients’ brand and facilitate ease-of-use and convenience for our clients’ customers,” said Miles. “They are optimized with different treatments for print, digital and TV display. They are also augmented with technology to serve multiple purposes for our clients beyond tipping. We are able to ‘dual purpose’ our codes to make systems such as hotel task management work more efficiently.

The platform also provides access to secure digital tipping screens via hyperlinks commonly used in email and SMS, NFC and RFID.

TipYo can be accessed in three different ways. “If you’re a guest, and you happen to be at a hotel that has a branded app, we can be integrated into the app; no one else to our knowledge is doing that yet,” Walsh said. “If a guest doesn’t want to download an app, they can go to a web-only solution. Then we have the standalone app as well, which does very well from an adoption standpoint. That’s better suited for smaller, independent brands and boutique hotels.”

One of TipYo’s clients, Virgin Hotels, is integrating the platform into its own app. “We’re powering their mobile tipping function within the Lucy app, so that a guest does not have to leave that experience,” he said. “So, if I’m using that app to check in, get a mobile key, change my reservation, order room service or towels, whatever it might be, we are within that app itself.”

The two platforms disperse the tips differently. For those hotels that use youtip, “Employees may be paid through the employers’ standard payroll systems, via paycard or instant payout to debit cards,” said Miles. “We’ll soon provide the ability to divert funds into specialty accounts as well if the employee chooses the option.”

TipYo, Walsh noted, has a proprietary software program on the back end that helps the company match tips based on the time, the room number and the guests if the hotel passes that information securely. “Our tip matching rate is actually about 95%, which is really high,” he said. “The tip, then, is passed right through to that individual employee’s paycheck.”

The platform can also handle the pooling of tips. “If you had five employees that are valet parking on a Saturday night, from the hours of 7 to 11 pm or whatever it might be, and there’s $200 in tips at the end of the night, we segregate based on the employee ID number and when he/she worked and can manage that process for the property,” Walsh said.