The flat white coffee drink was $4. A suggested tip was $3.
The
cashier at Café Grumpy, a New York City coffeehouse, swiped the credit
card, then whirled the screen of her iPad sales device around to face
the customer. “Add a tip,” the screen commanded, listing three options:
$1, $2 or $3.
In other words: 25 percent, 50 percent or 75 percent of the bill.
There
was a “no tip” and a “customize tip” button, too, but neither seemed
particularly inviting as the cashier looked on. Under that pressure, the
middle choice — $2 — seemed easiest.
American consumers are feeling a bit of tip creep.
Leaving
15 percent for full service (the former standard tip at a sit-down
restaurant), and less for quick transactions, is considered chintzy by
some people. “We recommend 20 percent absolutely,” said Peter Post,
managing director of the Emily Post Institute, which offers guidelines
in etiquette.
The
very concept of tipping is expanding beyond the service industry, with
new platforms that enable Internet content creators to receive Bitcoin
tips that reward their creativity rather than a simple thumbs up (or
“Like”).
And
in many situations, merchants as varied as cab companies and beauty
salons rely on the ubiquitous touch screen or mobile app to push higher
and higher gratuities.
New
York City taxi riders paying with plastic are confronted with buttons
for 20 percent, 25 percent or 30 percent tips. Anything less has to be
manually entered (and calculated by the passenger).
Purchasers
of gift certificates for the day spa Euphoria are asked if they want to
include a staff tip; the option 25 percent is automatically checked for
those who say yes. (They, too, can manually change it to 15, 20 or 30
percent.) A Miami diner complained on Chowhound of an automatic 24
percent gratuity for a buffet lunch: “I’m a consistent 20 percent or
better tipper, but a 24 percent included tip on a buffet Sheesh.”
In
December, an Italian restaurant in Los Angeles, Alimento, took a
different approach. It added a second gratuity line to diners’ checks —
“tip” (for the server) and “kitchen” (for the traditionally untipped
workers in the back).
The
hints and prods come at a time when the plight of low-wage workers is
increasingly in the national spotlight and battles over raising the
minimum wage continue. Some states, including New York, are considering
lifting the subminimum wage threshold pay for workers like waiters, who
are expected to earn a substantial portion of their pay in tips. But as
expected gratuities edge up, even conscientious and generous tippers
wonder if there might be a better way.
“I
would much prefer everybody get a raise and do it the way the Europeans
do and include it in the price,” said Helaine Olen, a personal finance blogger and author of the book “Pound Foolish: Exploring the Dark Side of the Personal Finance Industry.” “But we don’t live that way.”
Instead,
Ms. Olen said, people should plan for tipping obligations like other
household expenditures. “You need to just sort of budget it in the same
way as if you’re going to fly and you know the airline is going to
charge for your suitcase.”
Tipping
as an American practice stretches back centuries. “There are records of
George Washington and Thomas Jefferson giving tips to their slaves,”
said Michael Lynn, a professor of consumer behavior at Cornell
University’s School of Hotel Administration, who has studied changes in
tipping habits. In the 1940s, he said, the average restaurant tip was
about 10 percent. “It’s very clear that tip sizes have increased over
time,” he said, adding that he could not predict how high they would go.
Some
question whether expected tips will edge up to a point where they can
no longer be counted on as “add-ons,” leading employers to rethink
pricing and salary structures. Patrons of the fast-growing car service
Uber frequently cite its ban on tips as one of the attractions, even if
prices are higher than for taxi fares. A brew pub called Public Option
that is scheduled to open in Washington, D.C., will not allow tipping;
its owner has said he plans to pay his workers at least $15 an hour.
Still, the concept of tipping is spreading. In March, a Silicon Valley company opened ChangeTip,
a platform that allows people to send small Bitcoin payments through
social media, email, Skype or text to show their appreciation for
content creators (or anyone) on the Internet.
The
service has been growing about 30 percent a month and now has about
60,000 users who have collectively tipped over $250,000, said Nick
Sullivan, founder and chief executive. The average payment, he said, was
a little over $1.
The
tips may be small, but Mr. Sullivan’s vision is grand: to disrupt the
advertising model on the Internet by replacing it with a system of small
altruistic micropayments. He even envisions a new concept: the viral
tip.
“One
of the neat things with the way ChangeTip works is all those tips are
public,” he said. “When I send you a tip over Twitter, your followers
can see it, so there’s an inherent potential for viral growth.”
Other technological innovations are making a difference for baristas and other counter employees. A company, DipJar,
has created an electronic tip jar — patrons who pay for their coffee,
ice cream or bagel with a credit card can dip the same card into a
receptacle by the register for a preset tip amount, usually $1. Last
fall, DipJar raised $420,000 from investors to expand its presence from
about 20 test sites to 500 locations in the coming months.
“DipJar,
when we heard about it, we thought, ‘This is a godsend,’ ” said Leo
Kremer, a co-founder of Dos Toros Taqueria, a small chain of
counter-service Mexican restaurants in New York. The company recently
removed the tip line from credit card receipts on transactions below $20
out of concern that “some customers found it presumptuous.” DipJar, he
said, “can generate more tips in a way that’s not intrusive.”
Far
bolder are the proliferating tablet-based point-of-sale systems that
force the issue by presenting consumers with a slate of generous
gratuity options before the transaction can be completed.
“The
onset of iPad P.O.S. systems is completely changing the way consumers
tip,” said Justin Guinn, a retail market research associate at Software Advice,
who recently completed a study on the effect of such systems on tipping
practices for clients in the restaurant industry. “Just this morning, I
gave a 40 percent tip on my $2.50 coffee because the cafe’s P.O.S.
system has a ‘smart tipping’ feature.”
Such
a feature, he explained, automatically adjusts preset tipping options
on orders less than $10 to $1, $2 or $3. But for orders greater than
$10, it changes them to 15, 20 or 25 percent.
“It’s genius,” Mr. Guinn said.
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