Now it's possible to leave tips by card in Germany. According to a study by the Bundesbank, in 2021, consumers made a total of 58% of their payment transactions in cash. The trend is changing. According to the latest major survey, this figure in Germany was 74%.
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It's likely just a matter of time before Germans' love for cash cools even further. In some places, banknotes and coins are no longer accepted. This can lead to confusion, especially in restaurants.
Tipping by card in Germany confuses many Germans
There is no official tipping etiquette, but many people in the hospitality industry say it is customary to leave 10% of the order amount. If payment is made by card, tips can also be given in cash.
It is becoming increasingly common to pay the full amount (i.e., the total bill plus tips) by card. This becomes a bit complicated when it comes to invoicing because tips are not subject to VAT.
Many cash register systems now reflect this very well. When paying by card, problems inevitably arise for visitors.
That's why Carola Schüren from the German Hotel and Restaurant Association (Dehoga) advises giving tips in cash. This pleases not only the service staff but also the restaurateurs.
When making card payments, a so-called commission is charged on the total transaction amount.
This means that the restaurateur also pays a commission for the tips to the credit card or debit card employee. For this reason, many companies prefer tips to be given in cash, even if the bill itself is paid by card.
At the same time, if paying in cash, you can also be sure that the money will actually reach the staff. Typically, there is a distribution key, according to which tips are shared among the service staff and other employees involved in the general work, including chefs, for example.
Employees often report problems with tipping by card. They often have no idea about the actual income when paid electronically. Usually, access to the system is only available to the employer or selected management. Employees often lack transparency when it comes to electronic payments.
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Despite the increasing trend towards digital payments in Germany, traditional cash tips are still appreciated in the hospitality industry. For instance, Carola Schüren from Dehoga advises giving tips in cash, as it directly benefits the service staff and restaurateurs.
Lack of transparency is a common issue when it comes to tipping by card. Employees often have no idea about the actual income when paid electronically, which can lead to misunderstandings and miscommunications within the workforce.
