Why is the Eftpos machine asking me for a tip?

The rise and rise of tipping in New Zealand hospitality.

There’s a sort of post-meal-clarity that descends after dining out – you’ve satiated your hunger and thirst, and you find yourself confronted with a bill that’s somehow always higher than anticipated. 

“Did we really need garlic bread and arancini balls?”

“Did I need a second chardonnay?” you wonder. 

As you go to tap your card on the terminal, you’re faced with another question, one that has been creeping into normality recently: Tip? 10%, 15%, 20% or … NO TIP.

A bead of sweat forms on your brow, the waiter who served you hovers approximately 40cm away. Your finger dithers over the terminal. 

When the hell did we start doing this? When did tipping become a part of Kiwi life, and more importantly, where does this tip actually go? From restaurants and hairdressers to ordering takeaways from the comfort of your couch, tipping prompts seem to be popping up everywhere.

If you’ve noticed this, you’re not imagining it. Nicola Waldren, general manager of the Restaurant Association of New Zealand confirms that while the functionality has existed for years, it’s now much more commonly enabled on restaurant and café payment terminals.

Waldren acknowledges that not everyone appreciates being asked to add extra to their bill. “Some people find the prompt a little uncomfortable, and others are glad of the reminder.”

Waldren’s advice is to give customers some space to make their decision privately.

Maybe the more interesting question is exactly what happens to that tip once you’ve pressed the 10% button. “There’s no specific requirement to tell every customer how tips are distributed,” says Waldren, explaining some businesses divide them equally among staff while others allocate them to particular employees. The Association recommends that tips be passed on to staff, with a clear policy explaining how they’re shared.

So, are Kiwis actually tipping more, or just being asked more frequently? As the Restaurant Association doesn’t track tipping directly, there are no precise figures on how many diners tip or how much they leave. But its remuneration survey captures tips as part of wider pay data, and compared with 2016, the results suggest tipping has become more common in restaurants. “That’s indicative rather than precise, but it fits what we see and hear from members,” says Waldren.

Kristy Gregory of Eftpos New Zealand tells me tipping functionality is a standard feature built into payment terminals globally, and that it’s up to business to choose to enable it. “There's been no deliberate push on our part to introduce or encourage it in the New Zealand market. It’s simply a tool that's there if a business wants it,” she said.

Gregory says the median tip is around 5% of the bill and explained that tips are added to the total amount of the transaction and deposited as a lump sum into the business’s bank account. “Merchants can see tips broken out from sales, and we have a feature which allows businesses to attribute tips to individual staff members, so they can distribute tips accurately,” she said. 

But how those tips are actually divided is at the discretion of the business, and there are very few laws in place surrounding the practice. “In New Zealand, unlike other jurisdictions, tips are not dealt with by employment law. This means that it is up to the parties to decide how tips are to be allocated as between an employer and employee,” explains Simon Schofield, professional teaching fellow at Auckland Law School.

So how do the staff manning the Eftpos machines feel about the practice? At a central Christchurch Mexican restaurant, server Joshua* (not his real name) tells me he’s seen an increase in tipping. In the past, international tourists were the more generous clientele, but he’s noticed a shift in recent years with more New Zealand diners leaving gratuities, too. At his restaurant, the entire tip goes to the staff member responsible for the table, which he says is “absolutely” an incentive for staff to provide great service. He points out that the “high cost of living” can mean every dollar adds up. “A $4 tip is a big help,” he says. 

Sam, who waitresses at an upmarket steak restaurant in central Christchurch, says tipping is common at her workplace, where “the menu is expensive, people tend to have the money to tip”.

She explains that 75% of the tips go directly to the staff member who served the table, while the remaining 25% is divvied up between the chefs. She admits that it can be a little embarrassing presenting patrons with the tip prompt. “I feel awkward, definitely,” says Sam. “That’s why I often get the maître d’ to do it. They ask, ‘would you like to leave a tip for your server?’”

Sam is right to be hesitant about who to offer the tip function to – tipping is a divisive subject amongst Kiwis. While some will happily tip for good service, others are less tolerant. “Yeah, nah, get fucked. Any place that implements this loses my business,” was one particularly eloquent Reddit user’s verdict on Eftpos tipping prompts.

From tipping-induced rage to tip jar disputes ending up before the Employment Relations Authority, we’ve seen it all. Schofield points to one such case, Rickards v Night Pearl (2021) Limited, in which a hospitality worker took money from the staff tip jar on multiple occasions and was subsequently dismissed. The Authority ultimately found her dismissal unjustified as her employer had failed to follow fair process. 

Who actually owned the money in the staff tip jar was disputed. Rickards argued that, in her experience, tip jars were for staff, although the Authority questioned whether that meant employees could simply help themselves whenever they needed the money.

Schofield advised, “all in all, while well-intentioned, the payment of tips is more trouble for employers and employees than they are worth.”

A sentiment echoed by Dan Gregory, former owner of Auckland restaurant Al Forno, who says the restaurant passed 100% of its tips, averaging between $400 and $1,000 a week, on to the employees.

“Managing tips was a time-intensive process for me and took about two hours a week to work it all out,” he recalls. 

“Some customers pushed back on the question about tips during the Eftpos payment.” As the restaurant’s usual cashier, Gregory says he would reassure customers there was no obligation to tip. “I simply said, ‘There is absolutely no expectation of tipping, so please feel free to press no to that question.’”

Despite tips being taxable, IRD says it doesn’t have separately identifiable data of electronic tipping income, because it’s included in a broader income category. So exactly how much tipping is going on in New Zealand is anyone’s guess. 

I recently encountered a slightly baffling tip prompt that left me questioning the logic behind the whole premise. I ordered Vietnamese at the counter of a bustling street food market in Christchurch.

Before I’d even glimpsed a spring roll, let alone established a rapport with the staff, I was handed the Eftpos machine which prompted me to add a 10%, 15%, or 20% tip to my bill. I was then given a buzzer to alert me when my meal was ready, and when it went off, I walked back to the counter to collect my own meal. 

Now this isn’t a criticism of the staff, who was perfectly pleasant, but it did leave me wondering what exactly the tip was supposed to be for? Traditionally, a tip is a way of rewarding exceptional service. But as I’d been asked to add a gratuity to my bill before I’d even tasted the food, it couldn’t even be attributed to being so enamoured with my meal that I wanted to reward the chef. And as for the service? Well, I’d basically served myself.

I suppose hospitality companies and servers are using the age-old principle of “if you don’t ask you don’t get”, and can you really blame them for trying?

To some, tipping is a nice way to thank hardworking staff for going the extra mile. To others, it’s all just a little gratuitous.