Tip, Gift, or Donation? What Works For Your Farm
Today, Buyers are conditioned to “tip” at check-out when purchasing a variety of products and services. Come to think of it, when was the last time you did not tip someone when purchasing a cup of coffee, getting takeout delivered, or for a good haircut?
In recent years, the options presented at check-out have expanded significantly as vendors have looked to capitalize on Buyers’ altruism. From major retailers capturing donations for a cause, to Landromats seeking to help cover fees, or a local Art shop requesting a gift - there are several options that are presented to Buyers in addition to tipping.
Farmers that utilize Barn2Door can choose what ‘tipping verbiage’ they prefer Buyers see at check-out.
The 4 options available to Farmers to choose for their Barn2Door storefront include:
Tip: This is par for the course. Provides Buyers with a clear option to give an additional sum as thanks for your Farm products and service.
Help Cover Fees: This is a specific ask to set off processing costs. Many Buyers are sympathetic to the costs of digital transactions and will voluntarily contribute.
Donation: This is a “pay-it-forward” opportunity for Buyers to support a cause endorsed by the Farmer, such as a Food Shelter or Food Desert.
Gift: This is simply an opportunity for Buyers to come alongside Farmers to support their mission and efforts to promote specific products and practices.
Surveying the market, these 4 options were the most popular alternatives presented to Buyers in other check-out experiences. As a result, this should not be a “new experience” for Buyers, but rather an opportunity for your Farm to choose what is right for your business.
For what it is worth, don’t be shy about asking Buyers to contribute. For instance, Farmers who utilize the Barn2Door’s tipping function to help cover fees, collect enough in Buyer contributions to reduce their average processing rates to less than 1.5% (with one-quarter of Farmers paying Zero in processing fees).
Note, depending on your state and municipality, there may be some tax and wage implications depending on the verbiage you select. For instance, some jurisdictions may require that Tips collected by an entity must be distributed to employees and reported as taxable wages. In other jurisdictions, a Gift may be taxed at a different rate. If you have questions on tax treatment of your tips (and the verbiage you choose), we encourage you to speak with your local Tax & Accounting professional.
Offering Buyers the opportunity to contribute at check-out is commonplace. Buyers want to support local Farmers and your mission. Now, Farmers utilizing Barn2Door can choose the verbiage of their preference, to best align with their business goals.
Barn2Door is an all-in-one solution for Farmers selling direct – online and in-person. To learn why successful Farms run on Barn2Door, watch this 5-minute video.