Tip / Gratuity Distribution

As I'll be opening a coffeehouse soon, I want to determine a fair procedure for the distribution of tips (both cash and credit card) for the staff. What is the best way to assure that the staff share the daily gratuities fairly amongst themselves? Do you have a formal process, or does the staff just "fight it out" each shift? Then, are they expected to report their tips to the employer for tax purposes? My goal is to make sure that everyone is treated fairly regardless of the hours that they work.

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