In a world of card payments, the days of dropping coins into a tip jar are gone. On-screen digital options can sometimes increase gratuities, but at what cost?
It all started with an olive oil bundt cake. I was picking up a coffee at a local café after dropping off my daughter, when the cake caught my eye. It was pretty: sparingly iced with a light pink glaze and topped with a few delicate, edible flowers. I thought it'd be a nice surprise to bring home.
As card payments have risen in the US, tipping has also changed. While you'll still spot tip jars at local takeaway spots, many gratuities have gone digital, as point-of-sale systems almost always prompt customers to enter a tip before completing a purchase. Not only do patrons have to consciously decline – often under the watchful eyes of a worker – but the percentages are often higher than many people would select themselves.
However, says Biswas, the greatest driver of demand for the digital kiosks has become what payment processing companies refer to as their"smart tipping" functionality – allowing merchants to add a tip screen during a sales transaction, and choose which dollar amounts appear as choices for the consumer."With a tablet," he says,"you have the ability to add more options during checkout and adding options like tipping creates more revenue.
Beyond being"annoying", as participants in the Bankrate survey noted, Biswas says the ubiquity of requests for gratuities has changed consumer psychology and behaviour. "If you change something, it becomes the norm," says Biswas."A decade ago, airlines didn't charge for baggage. The public doesn't like it, but now they are used to it." He cautions that while the tip amounts, like airline fees, may feel small, these micropayments add up – and many companies won't be willing to forego the extra revenue the tipping prompts provide, so they are here to stay.
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