Different cultures treat gratuities differently. For instance, visiting a Tim Horton’s in Quebec, customers often encounter a broad swath of coins in front of the point of sale unit. Consider this the horizontal approach to the traditional tip jar. It’s a simple visual cue to remind customers to leave their nickels, dimes, quarters, or the odd loonie at the end of a transaction. You don’t see that in Ontario where a a jar or cup are the favoured vehicle.
What becomes of tip jars in the electronic age? If there is no silver (nickel, copper, zinc) passing from hand to hand in a transaction, what happens to the tip jar? This is a gap in the current move towards electronic payments. In this case, there is not an app for that – at least not one I’ve noticed.
In the past, paying with a card in a lunch line would have been considered pretentious – an inconvenience to the store and the customers in line. Now the pendulum is swinging the other way. An article today in QSR quoted a shop owner who said that half of clients coming into his store want to use electronic payment. While the electronic option is a tremendous convenience to consumers, there are well documented costs to the store owners to provide this convenience.
The part of these new electronic transactions that has not been addressed in the media or in an electronic manner is the gratuity. While those of us who do not work directly in the service industry probably don’t give it more than a passing thought, those tip jars, and the income they represent are certainly important to the people that help us every day. Without the opportunity to leave a tip, consumers lose a chance to thank those who help us with a small token of appreciation. With the onset of increasing electronic payments, consumers are less likely to throw a few coins of change into the jar or on the pile, as there is no residual change to jingle in their pocket.
Casual and formal dining establishments certainly provide the capacity to tip electronically by providing a gratuity step in the electronic purchase but what about the coffee shops, sandwich shops, and independent burger joints? QSR establishments do not have any sort of capability to enable a gratuity to be passed via an electronic purchase.
What to do? In some areas, tips can make a difference for employees, and for retailers a small perquisite with which to attract top notch help that can drive more business. As usage of cash starts to decrease, innovative retailers and solutions vendors will find a way to continue the tradition. I suggest the following thoughts:
- Ensure any solution is unobtrusive and passive. I personally loathe being asked if I want to pay $1 to support charity of the day. I support various charities on an ongoing basis and applaud their work, but refuse to pay any of these point of sale charity fees on principle as it feels to me like someone is trying to shame me into doing the right thing by having a rosy cheeked teen ask me if I want to plant a tree for $1. Tipping can NOT go in this direction if it is to be successful. Any opportunity to leave a gratuity for good service needs to be understated and private. The slot under the window for Ronald McDonald House at the McDonalds Drive Thru will see some of my change, as it doesn’t judge me.
- Leverage solutions already in place to ensure ease of use and universal capability. While it may be tempting to use an iPhone app to tip someone, adding a step to a low value transaction could potentially slow the line, and remove the potential of further gratuities for the server. If the solution is only an iPhone or Blackberry app, what about the good old plastic card carriers?
- Make any solution simple and ensure it is operationalized. Today, for small value purchases on credit, cashiers quickly swipe the card and hand it back – no signature required. Given that card payments are moving to chip and pin in Canada, customers are more accustomed to swiping, dipping, or tapping their own cards. Why not encourage customers to swipe their own card, and on the pinpad screen provide a single button press to round up to the next dollar with the push of a single button. Nobody sees the transaction but the client, and the server can be rewarded. In fact, now the retailer can see who’s really pulling customers into the store.
Tipping is complicated at the best of times. Are they individual, are they pooled, would servers want to hide how much they get in tips from their employers, or from the tax authority? While it’s hard to say the direction it will go, it seems inevitable that some electronic mechanism for tipping for low dollar transactions will occur. Maybe one day it won’t be a trail of coins at the POS, but a tap of a contactless card to a separate reader that says tips – the true electronic tip jar…