You Soon Could Be Tipping a Lot More

Thank technology for these new blows to your budget.

You Soon Could Be Tipping a Lot More Photo (cc) by torbakhopper

New technology may prompt you to tip more often in the future.

The Square Register app, offered by the mobile payment company Square, allows small businesses to use a smartphone or tablet as a register that swipes credit cards.

Its “Smart Tipping” feature also makes it easier for businesses to ask for tips from customers who otherwise wouldn’t tip them, CNN Money reports:

Making it as easy as a tap to add a tip is paying off for businesses. According to the company, Square users saw a 35 percent increase in tip frequency in 2014 from 2013. The average tip is around 17 percent.

That means it’s just a matter of time before your doctor, dentist, lawyer, accountant or landscaper asks you to tap a button indicating what percentage you will tip him or her before signing a digital receipt. Demand for the capability is growing in such sectors, Grace Chen of Square tells CNN.

While many Starbucks locations have long placed tip jars by registers for customers paying with cash, the company also uses technology to solicit tips from customers who use Starbucks’ payment app.

A push notification option was added to the app last year to give customers the choice to provide a tip of 50 cents, $1 or $2, according to a Starbucks press release.

The bad news for your wallet doesn’t end there, however.

Not only might technology like point-of-sales apps prompt more types of businesses to solicit tips, it might prompt you to leave a larger tip.

Researcher Nir Eyal, author of the book “Hooked: How to Build Habit-Forming Products,” explained in a study conducted last year:

Any time that money isn’t seen as money, you avoid the psychological problem called the ‘pain of paying,’ which has been studied by quite a few researchers. … The more cognizant we are of paying, the harder it becomes. And so when we make paying less obvious, I would assume [customers] would tip more frequently and in higher amounts.

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Karla Bowsher
Karla Bowsher
I’m a freelance journalist and former newspaper reporter who has covered both personal and public finance. I've worked for a top 50 major metro daily and a community newspaper as well as ... More


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