As many of you know, a Playa Bowls was recently opened across from BC’s campus. Every weekend lines of Boston College students wrap around the block just to pay $12 (or more) for one of Playa’s famous smoothie bowls. As a huge fan of acai bowls, I had to go and check it out for myself. After waiting in line for around 20 minutes, I handed the cashier my card. They flipped the screen of the iPad towards me to sign the check, and a window popped up asking me whether or not I wanted to add a tip. I never usually tip at this kind of grab-and-go restaurant, so I clicked the “No Tip” option, grabbed my acai bowl, and went on my way. My roommate went to Playa Bowls later that same week, and when she came back, she mentioned how she felt weird being asked to tip in front of the cashier. I wondered whether or not other people felt the same way, and sure enough, after a quick Google search, I found that this new version of tipping using the iPad has been debated for the past few years.
Most small, local chains across industries now use tablet credit card readers instead of a traditional cash register. The most popular option is Square, which offers both POS software and hardware to its customers. In addition to a full register, the hardware options include a mag stripe system, a chip reader, and a credit card terminal.
The Square software offers a few options for tipping depending on the amount of the transaction. For purchases under $10, the options are “no tip”, $1, $2, or $3. For purchases greater than $10, the options are “no tip”, 15%, 20%, and 25%. The customer always has the option to enter in their own tip amount. The servicer has the option to turn on and off this tip function as they please.
This popular software has been extremely successful for small businesses. A study done in 2013 showed that Square merchant partners generated $70 million in tips in the last quarter of the year and that nearly half of the tippable transactions resulted in a gratuity. This was a 37% increase from the same time in 2012, and, while no updated numbers have been released, I would assume that this number has continued to grow.
The controversy lies not in the software, but in the environment in which the transactions occur. Consumers feel forced to leave a tip even though the cashier most of the time provides little to no service. These feelings are expressed best in one customer’s tweet: “Why can’t Square have a tip option that says `it’s nothing personal, but I just can’t give you 20% for handing me a pre-made sandwich.’” Cashiers have also reported feeling uncomfortable watching the customers leave them tips. Many cashiers worry that the customers feel forced to leave tips, even though in this grab-and-go setting, they may not necessarily be expected to leave anything at all. Square has responded to this debate, saying “just choose “‘No Tip’” if, as a customer, you really don’t want to leave a tip. If you are a merchant, simply turn off the tipping function (although with the extra income it generates, I don’t know why you would).
I personally see nothing wrong with this new tipping option. I don’t feel bad not leaving a tip for someone who hands me a muffin from a bakery box. But I can understand why many consumers and merchants feel uncomfortable. Do you guys feel uncomfortable using this new tipping function? Have you ever felt like you are forced to leave a tip when using one of Square’s registers? Do you think that Square is taking advantage of some internal bias that all consumers have, making them feel guilty if they do not leave a tip? If they are doing so, is it morally right for them to take advantage of consumers in this way?