Are Mobile Payment Systems Prompting Tip Inflation?
Tipping, when it got started, used to be a practice by which people could reinforce good service by the most direct method possible: handing over additional cash for it. Eventually, it became an expected part of the operation to the point where restaurants and similar organizations could offer employees less per hour on the expectation that it would be “made up with tips.” Now, some reports suggest that mobile payment systems are actually contributing to a kind of “tip inflation” where what once was generous is now barely sufficient.
It’s extending to other fields as well; one Phoenix-area financial planner took his cats in for grooming, at $150. A fairly salty expense, but then the payment system kicked in an additional cost, offering him the option to tip at either 20, 25 or 30 percent. Lower tips weren’t permitted, so rather than swallowing the unexpected premium, said planner elected not to tip at all, calling it “ridiculous” and noting that expectations of tipping weren’t explained in advance.
Some report that mobile payment options—Square is frequently cited in this field—are forcing certain percentages as tips by only offering those percentage choices. The 20 – 30 percent range is increasingly commonplace, and in circumstances where tipping may never have been seen previously, like at the pet groomer’s.
Square, however, notes that its default settings for any amount over $10 are “no tip,” “15 percent,” “20 percent,” and “25 percent.” Thus tips in the 30 percent up range or without the 15 percent option are the individual business owner’s doing.
In the end, businesses are counting on people’s emotional responses to generate higher tips. Some note that it’s almost like a reverse “tip shaming,” in which people are able to give more, and if they fail to so do, it’s effectively like saying to the business “I could give you more, but I won’t.”
While tipping is still in our hands, we must be careful not to fall for psychological ploys and preselect menus. Tipping is still your option. Any outside pressure to change that is unethical, regardless of what the payment system menu says. So when you use a mobile payment system, remember to take back the tip and exercise your own judgment.