Tips, donations and charity round-up in an online store: how to do it properly

A restaurant taking online orders, a bookbinding workshop, a store that works with an animal shelter. In all of them there are customers willing to pay a little more: to thank the team for their work or to support a cause. If the store doesn't make it easy, that money never arrives.

But tips, donations and charity round-ups are not the same thing, either in accounting or in tax terms, and mixing them up causes problems. This article separates them. We give no tax figures: they depend on your legal form and your circumstances, and must be confirmed with your accountant or tax adviser.

Three different things

The charity round-up ("round up to the nearest euro and donate the difference") is not a fourth category: it is a donation to a cause, just with a calculated amount.

Tips in an online store

They make most sense in businesses where the customer sees human work behind the product: restaurants with delivery, home services, crafts, handmade products or small stores with a very personal touch.

• Where to show it: in the cart or at checkout, next to the order summary. Not on the product page, unless it makes a lot of sense in your case.
• How to suggest it: a few suggested percentages or amounts and a field to enter any amount, with the "no tip" option just as visible.
• How to record it: as a real order line that appears on the order, the invoice and the emails. A tip that only exists in a separate field can't be reconciled.
• When it counts: only once the order has been paid. A pending bank transfer is not money collected.
• If the order is cancelled, the tip is refunded with it.

On the tax treatment of tips there are two questions to discuss with your adviser: how that amount is treated for IVA (Spanish VAT) depending on how you collect it, and how it is shared out among the team, because what employees receive has its own employment and tax treatment. The tool can split it according to a scheme, but how it is paid out is for your payroll adviser to decide.

Donations to an outside cause

If your store collects donations for an NGO you work with, you are acting as an intermediary. That means:

1. An agreement with the organisation: what is collected, how often it is transferred and how it is accounted for.
2. Transparency with the customer: who the money goes to, what for and how much has been raised. Publishing the total and the transfer receipt builds trust.
3. Handing over the money within the agreed time frames, with a record that proves it.
4. Who issues the certificate: the donation certificate with tax effect is issued by the organisation receiving the donation, not by the store. If you want your customers to be able to claim tax relief on what they donate, the organisation needs their details (including their NIF, the Spanish tax identification number), and you must collect them with their consent and pass them on.

Another, simpler option is for the store to donate a share of its sales ("2% of every order goes to…"). In that case the donor is the store, not the customer, and the store receives the certificate.

If you are the NGO

Many non-profit organisations have an online store: they sell merchandise, lottery tickets, calendars or fair-trade products. For them, the store can also be the channel for raising donations:

• Campaigns with a target and a progress bar.
• One-off and recurring donations (monthly, quarterly, yearly).
• Validated donor tax details: NIF, NIE or CIF (the Spanish tax IDs for individuals, foreign residents and companies), and donor type.
• A receipt for each donation and an annual certificate.
• Data for Modelo 182, the information return on donations that organisations file with the Agencia Tributaria (Spanish Tax Agency).

The tax regime for non-profit organisations and incentives for patronage is set out in Ley 49/2002 (Spain's Law 49/2002 on non-profit entities and patronage). If your organisation is covered by it, your donors can claim tax relief on their contributions, and that depends on Modelo 182 recording their details correctly. A mistyped NIF is a deduction the donor won't see in their draft tax return.

Collecting and reconciling

Tip and donation money has to be traceable in the same way as sales money:

• It should come in through the same gateways as the rest of the order or, if it is a standalone donation, through a gateway with signed confirmation.
• It should only count as collected once it actually is.
• Recurring donations should have their payment scheduled and an alert if it fails.
• You should be able to export the details for your accounts.

Common mistakes

• A tip or donation ticked by default.
• Collecting for a cause without a written agreement with the organisation.
• Never publishing how much has been handed over.
• Counting as collected bank transfers that haven't arrived.
• Mixing tip and donation in the same line.
• Donor NIFs not validated before Modelo 182.

Checklist

• Decide what you offer: tip, donation to a cause, donation to your organisation or round-up.
• No pre-selected options, with "no, thanks" just as visible.
• A real order line that only counts once paid and is cancelled with the order.
• An agreement and a hand-over schedule if you collect for someone else.
• If you are an NGO: validated NIF, certificates and Modelo 182 data.
• Go over IVA, the sharing-out and the treatment of each case with your adviser.

How to do it in PrestaShop

RKR Contribution adds tips in the cart and at checkout (percentage, fixed or free amount, with minimums, maximums and rounding) as a real order line, which only counts once the order is paid, is cancelled with it and can be shared out among the team. For organisations, it switches on a donation engine with campaigns and targets, one-off and recurring donations, NIF, NIE and CIF validation, a receipt and annual certificate in PDF, a "My donations" portal and an export for Modelo 182, with payment by bank transfer or Bizum, Stripe, PayPal, Redsys or Mollie.

This article is for information only and is no substitute for tax or employment advice. For a specific case, consult your adviser.