Segmenting third-party delivery tips is critical to accounting for restaurants, as it can result in costly mistakes and overpaying employees when using tip pooling for in-store and pickup orders.
While this new feature offers a significant improvement, it is not without its limitations. Users should be aware of a few caveats, which will be detailed at the end of this documentation. Importantly, this feature still necessitates manual bookkeeping and accounting for deferred revenue and third-party delivery (3PD) tip payouts at the end of the month. It’s crucial to note that we cannot provide guidance on how to manage these aspects.
This feature serves as a temporary solution until Toast implements the capability to map delivery orders to their respective 3PD employees. This enhancement will ultimately prevent third-party delivery tips from being incorrectly reported in the tip pool.
Contents
How to Set Up Tip Mapping
Toast
- Create a Menu and Group in Toast, with nothing selected under Visibile To, and with a title that will be clear for reporting.
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Create an Item in Toast with the following configurations and the same title as the above Menu and Group (for clarity).
Setting Value Pricing Strategy Open Price Defer Revenue Yes Can be discounted? No Tax Rate* Whichever tax rate the location applies to delivery tips. Printing No Print
- Once the group and item are created and saved, copy the GUID from both, which will be used in the Incentivio Admin Portal to map tips to these items.
For clients using Toast's Multi-Location Management (MLM) suite, the same Group and Item GUIDs can be reused across all locations. However, for brands not using MLM, these steps must be repeated for each location.
However, this will also depend on preference and accounting practices, as having tips for all locations mapped to a single deferred revenue item vs. multiple will impact reporting.
Incentivio
- Once you have the Group (Catalog) and Item GUID, navigate to the Incentivio admin portal.
- Select the store you would like to map this to, and click Edit.
- Under Extended Attributes, add the following:
Key Value TOAST_DELIVERY_TIP_MAPPING_CATALOG_GUID (Group GUID) TOAST_DELIVERY_TIP_MAPPING_ITEM_GUID (Item GUID)
- Save these changes.
Once that is set up, this should be all set. When a customer places an order, the tip amount that the end user selects is sent to the third-party provider so that a driver shows up. When the order is sent to Toast, the tip amount is sent as the item that was created with a tip amount of zero reported to the pool.
This is what an order would look like in Toast:
Takeout orders should not change, reporting and sending the tip appropriately even with the delivery workaround in place:
The tip item for delivery should now be reported in deferred revenue in the sales summary, as well as in the PMIX summary:
Limitations
As mentioned previously, this is a workaround until a more permanent solution is implemented by Toast. With that, there are some limitations to consider.
First, this is not supported for clients using Shipday. It is only supported for clients using Uber Direct or Doordash Drive's direct integrations with Incentivio.
Because this tip amount is now sent as an item, and Toast calculates subtotals, there will be a reporting discrepancy in Toast when there is a percent-based service charge used (delivery or otherwise). The end user will still be paying the correct amount, but there will be a reporting discrepancy in Toast, resulting in a "ghost" Unpaid amount. For example, looking at this order:
This is what the end user paid:
There is a discrepancy of .50 between the amounts totaled in the first screenshot versus what the end user paid in the Payments screenshot since there is a 10% service fee being applied to the check. The end user doesn't pay the added difference, but it will show up as an unpaid amount of .50 in Toast since there is an added $5 to the subtotal that Toast is calculating the final amount for the service fee:
Additionally, if the restaurant decides to tax the tip item, this will result in an open check because of deferred revenue tax in the amount of the tax on the tip item.
It is recommended that a test order is performed once the setup is complete. The following should be checked to make sure everything is working as expected and the client understands the reporting implications:
1. Test delivery orders:
a. Make sure the tip is being sent to Uber via the Uber portal
b. Make sure the tip is being reported as $0 to Toast on the Order
c. Make sure the Tip Item is being reported as deferred revenue and confirm that it is showing up on the Order and product mix
2. Test regular pickup orders
a. Make sure the tip is being sent to Toast as usual
b. Make sure nothing else is happening out of the ordinary with the order