Last Updated on by Dan S
Originally Published February 7, 2022.
Launched in 2020, Shopify created a “tipping” feature allowing Merchants to accept tips during the checkout. Although traditionally attributed to the catering industry, tipping has found a new meaning in online commerce with the addition of this feature.
What are tips on Shopify
Shopify merchants can accept tips during the checkout from their customers. This is an easy way to bring in additional revenue for your business. Tips allow for customers to show gratitude towards the business they are dealing with. What started as a relatively new concept in 2020 has now become an established feature that merchants across various industries use to boost their average order value and connect with customers.
Merchants have reported their take-up rate on places like Reddit and Twitter with some stores seeing amazing results.
As a merchant, when enabling tips you can show some predefined values up-to 100% of the order value. Customers can’t tip more than 100% of the order total, and tips are limited to $1,000 USD for both pre-selected and custom tip options. The tip is calculated on the cart’s subtotal before taxes and shipping.
How to enable tips on your Shopify store
It’s extremely quick to enable tipping for your Shopify store.
Firstly, once in your Shopify Admin, click “Settings” then select the “checkout” section.
Next scroll down to the “Tips” section and check the box “Show tipping at checkout”. You can also choose to show tip options to all customers by default, or hide the tipping options until customers choose to add a tip. If hidden, customers must check a checkbox to display the tip options.
By default, the values are 5%, 10% and 15% as well as a custom value the customer can enter. Depending on your store’s average order value and industry, you may want to lower or higher this. If unsure, stick with the defaults. You can always change them later to do some A/B testing of your own. You can create up to 3 tipping options that are a percentage of the order’s subtotal.
Once you click “Save“, tipping will now be active in your checkout. Note that updating checkout settings, including tipping options, can take up to 30 seconds to be reflected on your checkout.
An additional step you may want to follow is to adapt the language based on your theme.
Most themes should have a “tip” string you can change in the language settings for your theme. This will alter how the tip shows as a line item once added to the order. You can customize the labels to suit various objectives, such as charity fundraisers or other promotional efforts.
With tipping enabled and your language modified if applicable, your customers will see something similar to the below when checking out.
The benefits of tips on Shopify Checkout
Tips are essentially a win, win for the merchant. They require no additional action from the merchant other than simply enabling them on the checkout. The tipping feature is available to all Shopify merchants, including those on the Shopify Basic plan, and it also works with Shopify POS and draft orders. Some merchants may wish to thank customers that leave a tip. Depending on your email flow, you could automate this otherwise you can always reach out manually and thank them.
The amount of tips you receive will vary based on the number of orders your store processes. Other factors such as the products you retail, the industry you are in and the price point will all contribute to the frequency and size of the tips you get.
The best view is to enable it and think no more of it. If you receive it tip, it’s a welcomed and unexpected bonus.
Tips will contribute to your average order value so if your customers are feeling generous, they can give you a much welcomed boost when calculated over the period of year for example. Keep in mind that tips are subject to credit card fees or third-party transaction fees because they’re part of the order total.
If you are looking for a faster way to increase your average order value, check out upselling.
