Tabbedout, a Phone App, Makes Bartenders’ Lives Easier

Rick Orr's wife picked out this Tabbedout groomscake for their wedding last June. (photo by Ben Godkin)

Rick Orr, co-founder and EVP of Tabbedout, is a smart guy, but it’s not something he shoves in your face when you meet him. At least, that’s not what happened when I first encountered him and his then-fiancée at a little bistro in Austin last summer.

When Orr explained the concept of Tabbedout during our interview, I thought, “How neat,” and pushed it right out of my head. I was there to write about their nuptials, so wedding colors and flower arrangements seemed more important at the time. Since then, that conversation about his company has followed me to Dallas, where it’s hard not to notice people like Scott Reitz singing the praises of this iPhone and Android app.

This is how it works on smart phones: You download the sucker for free, enroll your basic billing info, and then you can open, view, and pay your tab at participating restaurants from the convenience of your phone.

When I met Rick Orr in June 2011, only a few places in Dallas had adopted Tabbedout. Now it’s good to use at 50 different locations in the DFW area, and I’m sure it will catch on like wildfire as soon as other bartenders realize how many more drinks they can make when they’re not busy closing tabs.

“It’s really important for the staff to understand that the average tip is above 20%,” says Orr. If customers want to pay below the minimum tip amount, then they’ll have to manually pay for the tab themselves.

It’s a win-win situation for customers and merchants. Customers have control of the close-out, and they don’t have to wait 30 minutes for the tab anymore. Merchants, on the other hand, can focus on service instead of sliding credit cards through machines.

For Orr, it’s a huge accomplishment to break into the DFW market. ”I grew up close to Dallas and lived there right out of college, so it’s personally important that we do well there.”

14 comments on “Tabbedout, a Phone App, Makes Bartenders’ Lives Easier

  1. Guests, not customers, please.

    Their website includes very little information about how you interact with the bartender to “open your tab”, it must take some 2 way communication between the two in order for your bill to be tallied and sent to the phone. In which case, instead of on the POS machine, they are texting on a phone (or are they really texting their boyfriend or girlfriend?) No thanks. Perhaps some modification to the $20,000 piece of equipment that tracks your sales? No thanks. I’m assuming they make (some of?) their money by an additional vig on the credit card fees? No thanks.

    Most restaurants want the personal interaction, the owners want to know their employees are keeping track of who is in there, greeting everyone. If a bartender is not paying attention to every guest, it’s the bartender that needs to be either re-trained or replaced. Or the owner needs to hire an additional bartender to help with volume, it’s $2.13 per hour to add one more person. Hard to compete with that cost.

    There might be a market for this in high volume bars.

  2. The guest shows the code to the bartender to open their tab. After that the guest needs to place their order with either the cocktail server or bartender–they don’t text their order to the bar. Tabbed Out is merely a convenient way to pay for a bar tab.

    In addition to not having to close tabs at the end of the night, guests no longer have to leave their credit card at the bar which saves that next morning, “Did I leave my credit card there?” phone call.

  3. Yeah, but Kate, there has to be some interaction. POS systems don’t come with the ability to “send out” a tab to a phone. So either there’s something added to the equipment (software/hardware), or it requires a human to send the info to the phone.

    There has to be a way for the owner to verify that the tab sent to the guests matches up to what ended up in the bank and not lost in the internetsphere somehow.

    Like I said, I can see it being a positive for busy bars, I just read Scott’s review of it and it sounds great for situations like that. Not so much for restaurants.

  4. Amy, good questions/comments. Thank you! When you walk into a restaurant or bar, you “open” a tab from your phone by searching for locations nearest to you (or by name, city or state). When you open the tab, the app and the point of sale system (POS) electronically generate a 5 digit alpha numeric code that you simply show to the server or bartender. They will then see a new check opened on the POS with that code. The server can then add the food/drink items to the check. The guest can now see all of their check details on the app. That’s it. The process of ordering, entering the order into the POS and the guest/server interaction is exactly the same as it was without Tabbedout. This process is much faster and more secure than handing a credit card to the server/bartender, than it is waiting for them to close your check out for you. Moreover, the app has a minimum tip amount that the merchant chooses. Servers and bartenders love this feature and history shows that the tips on Tabbedout are higher than normal. Tabbedout allows the server and bartender to spend more time with the guest as now they don’t spend time processing credit cards and closing out checks. We charge the merchant a small monthly license fee to use Tabbedout, which has a 100% ROI after just 4-5 monthly uses of Tabbedout (most places average 20-200/month). There is no fee to download the app, and we don’t charge any additional transaction fees. It is completely free to the consumer.

  5. They charge the restaurant or bar for this with “a small monthly license fee” ?? So now drunk idiots who can’t remember how to close their tabs or people who feel the need to just walk out and pay later can have the establishment PAY for them to be jackasses. Awesome. That ROI BS is just what it is… Bullsh. What a great way to celebrate idiocy by making the business pay for it! People who want this type of “service” should have to pay for it themselves NOT the other way around. The merchant already has to pay a credit card merchant services fee for credit card transactions that in most cases is very high, so these geniuses are adding another fee?? Great. Drink prices going up…

  6. This looks like a complete rip-off of Pay with Square app.
    Or it could be the other way around.

  7. @Kevin – who processes the credit card charge – the merchant or Tabbed Out? How exactly does the POS spit out this 5 digit number? As far as I know, my Aloha system cannot do this unmodified.

  8. Good question Amy. The merchants credit card processor doesn’t change. The credit card is processed just as the POS normally would. The Tabbedout solution has been working this way since early 2010. In coordination with the POS system reseller, we add a small amount of software to the POS server that allows the solution to work. It is all software based, with no additional hardware required. As for all the POS systems, including Aloha, the POS system must be on a relatively recent version to work with Tabbedout. If you’re interested, we can connect so I can explain exactly what is required from Aloha.

  9. If you have to wait 30 minutes to close a tab, (you) are either at the wrong place and no one should return to that place or a total d bag that probably never tips so the bartender or waitress puts you at the end of the line. People need to remember that this tabbed out concept was designed in Austin, a college town full of broke kids that don’t tip. Of course the Austin establishments had a need for a product that get those children out asap so the bar could process as many transactions as possible. I would like to think that Dallas holds a higher regard for customer service than even allowing a guest to take that option. Lets just tell them they have the option to go get their own silverware in case they don’t have time.

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  11. Haven’t used it yet, but have seen it in action, and it’s very convenient. As a bar patron, I like the idea of being able to close my tab on my own without getting the bartender’s attention. This seems particularly helpful for the last-call rush, or when a table of 15-20 service industry people want to close their separate tabs at the same time. It’s funny that some people think a time-saving piece of tech means that the bartender is somehow lazy, or inattentive. The cash register was an improvement over arithmetic. The POS was an improvement over that. The electronic credit card processor was an improvement over the carbon copy. (Yes, I am old enough to have used one!) Time and tech march forward. Decrease the amount of time printing endless pieces of paper, spend more time making drinks!

  12. Pingback: Tabbedout, a Phone App, Makes Bartenders’ Lives Easier | The Peter Principle

  13. I could see how this concept could be applied to a restaurant dining room setting as well, and even could have some good applications in a hotel setting. As a hospitality professional I could see as being a neat and helpful app and service to offer.