INCENTIVE IMPACT Herb Rothe says the incentive program at his shop, Rothe Florists & Flower Delivery in Philadelphia, is a win-win for everyone. It helps the shop move product and boost revenue, and it provides a way for his employees to earn extra income.
Tips for Accepting Tips
One of the best incentives costs you nothing: Tips. Add a tip jar at the register or an option on your website that allows customers to show their appreciation and watch the monetary kudos pour in.
“About 25% of our orders from our website have tips,” says Jordan Hall of Palm Springs Florist. Customers of the Palm Springs, California, shop can be very generous. One gave a $150 tip on a $350 order. Online tips are pooled together and divided among the employees proportionate to time worked — a practice many shops that offer tips follow. Full-time employees average an extra $400 per month, Hall says.
Derrick Myers, CPA, CFP, PFCI, president of Crockett & Myers Associates, advises florists to consider accepting tips, as they can significantly boost employee pay without increasing labor costs. Pooled tips can add $2 or more per hour to wages, making shops more appealing to job seekers and reducing turnover.
“It’s a no-brainer,” says Herb Rothe of Rothe Florists & Flower Delivery in Philadelphia. “It can be a good bit of money.” He divides tips collected on the Philadelphia shop’s website among all regular staff, including designers, salespeople, and drivers. “Everybody gets it because everybody has an important job,” Rothe says. The only tips that aren’t pooled are those physically handed to individual employees.
Here are 3 key tips for tipping:
Draft a Tip Policy • Specify who shares the tips, how often they’re paid out, and what percentage employees receive.
• Ensure consistency in the allocation of tips. • Have employees sign the policy and keep it on file for reference.
Follow Federal Guidelines • Owners, managers, and supervisors cannot participate in tip pools, per the Fair Labor Standards Act.
• Include tips in payroll, as all income is taxable.
• Separate tips from regular wages on payroll since they are taxed differently.
Check State and Local Laws • Federal law allows businesses to deduct credit card processing fees from tips (e.g., 30 cents on a $10 tip for a 3% fee).
• Some states, like California, prohibit deducting any portion of tips, including for processing fees.
The magazine of the Society of American Florists (SAF) 27
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