Point-of-sale devices are making it much easier to ask for tips

The expansion of tipping is at least partly because it has become easier to ask for a tip, says Tashlin Lakhani, an assistant professor of management and organizations at Cornell University’s Nolan School of Hotel Administration.

“Because you have more point-of-sale systems, electronic, digital technologies, where we're swiping our credit card through, it does become easier,” she says.

We all know the feeling, an iPad is swiveled around to face you and you have to make the crippling decision to tip up to 30% on the tea you ordered to go while the barista looks on. The decision is so guilt ridden it has inspired several memes.

The use of mobile point-of-sale technology on a smartphone or iPad is growing quickly.

The global market of mobile POS was valued at about $17 billion in 2017. That’s expected to grow to $70 billion by 2027, according to Global Market Insights.

Nearly half of all stores and retailers use a point-of-sale system.

One of the selling points of the system is how easy it makes the tipping process.

Square, a popular POS company, details on its website how simple it makes the tipping process, allowing the retailer to either customize the tip option, or use a set percentage. Square did not respond to a request for an interview or information.

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Tipping for merch at a concert

The problem for customers is that you’re not always expecting it.

At a recent Kid Cudi concert in Atlanta, Nisha Baddoo was prompted for a tip on the merchandise she bought.

Baddoo was prompted to give a tip of up to $20 for her purchase of a $125 sweatshirt.

“I've never seen it that way before, ever,” she said.

“It was kind of confusing … I was pretty shocked.”

The possible effect on wages

The expansion of tipping is a trend Saru Jayaraman has been tracking for years. She is the president of One Fair Wage and the founder of the Food Labor Research Center at UC Berkeley.

“Because of Apple Pay, we've seen the introduction of tipping into lots of environments where we typically just wouldn't tip,” she says.

Jayaraman says the practice extends to gig companies and even airlines.

“And in every instance, our major concern was that we were seeing these companies basically attempt to emulate the boondoggle that the restaurant industry has had since emancipation of slavery,” she says.

In several states, restaurant owners can pay servers as little as $2.13 an hour on the assumption that tips will make up the rest of the wage.

The worry, says Jayaraman, is that tip creep will allow other sectors to pay their workers less.

Lakhani, at Cornell, says because tipping is a way to increase compensation, it’s passing some of the responsibility for wages onto the consumer.

“But that could be part of the strategy as well.”

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About the Author

Lauren Bird

Lauren Bird

Staff Reporter

Lauren Bird is a reporter for Moneywise.com. Before writing about personal finance Lauren reported and produced for CBC and BBC Radio. Her work has also appeared in The Atlantic.

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