How has electronic payment processing changed tipping?

Every country, and many professions, have different standards regarding tipping. Of course, your waitress may be more than happy to break your bill to make some change for you, but what about the increasing amount of people who don’t carry cash? How has that trend in North America, and elsewhere, changed tipping?

For one thing, payment processing machines often suggest a tip amount that can be anywhere between fifteen and 30 percent. This seems normal at certain business establishments, but some are wondering if the option to include the suggested tip amount is prompting some businesses to ask for tips where previously leaving one was not expected. Take for instance, over-the-counter coffee shops.

Torontonian and etiquette expert Lisa Orr told Calgary’s Chronicle Herald that she’s seeing suggested tip amounts “everywhere now” partly because “it’s so easily built into our payment gateways.” Despite the rise in this technology, Orr believes, tipping etiquette does not require leaving a tip of “fifteen percent or more” at to-go restaurants.

“The use of digital payment terminals encourages consumers to be more generous than they would be if they were using cash,” Orr suggested.

A lot of this can be traced back to payment processing companies like Square Inc., a San Francisco based entity founded in 2008. Square Inc. allows retailers to process payment on smartphones, tablet, etcetera. It’s the kind of service you might use if you needed to process payments at a food truck, or some other smaller-scale operation. Square Inc. also allows its retailers to choose whether or not they prompt for tips.

The Chronicle Herald explains that “Nearly 90 percent of retailers that enable tipping rely on the company’s ‘smart tip amounts’ feature… When consumers spend less than $10, they can choose between no tip, $1, $2, or $3. When they spend more than that, they can choose between no tip, 15 per cent, 20 per cent or 25 per cent.”

Square Inc. spokesperson Leslie Jackson told the Chronicle Herald in an email that retailers can also choose to input custom amounts, and that the highest amount chosen in Canada was a 30 percent tip option.

Company data suggests that so far in 2018, “Canadians tipped an average of 13.4 per cent using Square at food and drink sellers…. That includes an average 13.7 at coffee and tea shops, 13.1 at food trucks, 12.9 at bakeries and 11.9 at quick service restaurants.”

Orr believes that tip prompts make customers feel guilty about if they choose not to tip at to-go restaurants. Do you think that electronic payment processing has changed the way we tip?

Source: – Cashless consumers face tipping quandary for over-the-counter service
Published: July 26, 2018