Numerous establishments in British Columbia’s hospitality sector are raising alarms over significant sums of tips that have vanished from a third-party programme responsible for managing them. Container Brewing, located in East Vancouver, is one of the latest businesses seeking answers after discovering a substantial shortfall of $3,100. Dan Webster, a representative from the brewery, revealed, “Their system user, not any of us, pulled out all the money… removed $3,100 and it hasn’t come back.”
Growing Concerns Among Businesses
Container Brewing utilises Everyday Payments, a service that oversees tip collection and employee wages. This company has been widely adopted across the province, with other businesses similarly reporting losses amounting to thousands of dollars. Everyday Payments promotes itself as a provider of “real-time employee payouts,” serving a variety of sectors, including hospitality, food service, beauty, wellness, and commission-based industries.
The platform employs the AnyDay solution, which integrates a robust employer portal with a user-friendly mobile application and payment card. This system aims to streamline fund management, enhance visibility and control, and facilitate quicker access to earnings for employees.
Significant Financial Impact
Eric Griffith, who operates Alta Bistro and Alpha Cafe in Whistler, expressed his concern regarding the situation, stating that upon logging into the system recently, he realised they were missing $4,550. “We’re missing $4,550,” he confirmed. Griffith and Webster both acknowledged that the repercussions of these missing funds are severe for their businesses. Webster remarked, “The magnitude of the $3,000 shortfall for our business is essentially half our payroll.”
The gravity of the issue has escalated, according to Ian Tostenson, president and CEO of the BC Restaurants and Foodservices Association. He highlighted that the ongoing situation is worse than initially understood. “There are 15,000 restaurants in B.C. — thousands of restaurants affected, millions of dollars,” Tostenson noted. “I know three restaurant groups that total, already, $2.3 million in B.C. And that’s not the little ones like $5,000, $12,000, $8,000, so it’s really, really bad.”
Investigations Underway
The platform in question, which is operated by Toronto-based XTM, has recently disclosed an accumulated deficit exceeding $71 million according to their Q3 interim report. This financial instability raises questions about the company’s operational viability. XTM’s CEO, Marilyn Schaffer, clarified that the deficit does not indicate missing customer funds or trust shortfalls. However, when approached for further information regarding the missing funds from the B.C. establishments, she did not respond.
The situation has prompted an investigation by the Royal Canadian Mounted Police (RCMP), while the Bank of Canada has also stated its intent to look into the issue, asserting that it possesses tools to enhance compliance among payment service providers. For the time being, Webster has indicated that they are hesitant to deposit additional funds into their digital wallets until the matter is resolved.
Wider Implications for the Industry
The ongoing crisis within the hospitality sector is not just a financial setback; it raises broader concerns regarding the reliability of third-party payment systems and the protections available to businesses and their employees. As the situation unfolds, it underscores the urgent need for transparent and secure payment processing solutions in an industry already grappling with numerous challenges.
Why it Matters
The disappearance of tips from a centralised payment system not only threatens the financial stability of individual businesses but also undermines the trust that employees place in their employers. With thousands of restaurants affected and millions of dollars unaccounted for, the ramifications could extend far beyond immediate monetary losses. It raises critical questions about the regulatory oversight of payment platforms and the safeguards that need to be in place to protect the livelihoods of workers in the hospitality industry. As investigations continue, the sector awaits clarity and accountability, hoping for a resolution that will restore confidence and financial security.
