By  Updated on Wed May 7, 2014

Merchants Use Digital Tipping Alternatives

 
Merchants Use Digital Tipping Alternatives

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These days, consumers use credit cards, debit cards, and other forms of technology as their primary payment method, rather than being bothered with carrying cash. What happens when you want to tip someone?

Technological advances make it easier for merchants to accept various forms of tips. Merchants are beginning to utilize technology so consumers have the ability to tip, using a debit or credit card.

DipJar explained

DipJar was created by Ryder Kessler, who in 2008 was at his favorite coffee shop during an Oktoberfest event. He noticed the baristas were hard at work providing service to customers. He asked one of the baristas if working during an event like Oktoberfest was rewarding in terms of tips, but was told that as the years progressed, the amount of tips decreased.

It came to Kessler’s attention that more people carry plastic cards in their wallets as opposed to cash, which may be the reason why the baristas in his favorite coffee shop were getting less in tips as opposed to a few years prior.

Kessler’s speculation is not far from the truth either. A report conducted by Javelin Strategy & Research, a market research firm, concluded that by 2017 only 27 percent of point-of-sale purchases will be made with cash. With less than three out of every 10 people paying in cash, it is reasonable to expect few to carry bills small enough to provide a tip.

Starbucks is paving the way for apps to provide tips

Starbucks recently released a new feature on their mobile application to allow anyone to tip their barista directly. All you have to do is download and use the Starbucks application and you can tip $0.50, $1 or $2. The process quick, and it’s now easy to reward your coffee or cappuccino maker a couple extra dollars for a job well done.

Square Register and other payment solutions offer tipping options as well

The Square Register device, which allows merchants to utilize their tablet device to work as a register, lets customers to include a tip of their choosing at the end of their transactions.

Allowing customers to leave a tip via debit or credit card is a smart way to help provide an incentive for merchants to use devices such as Square Register over others. The traditional register cannot provide this option, unless a receipt is printed with the option for the customer to add a tip, which is usually only the case at restaurants.

Look for updates from payment apps to allow customers to provide tips digitally. For now, the ability to leave a tip with your mobile phone or plastic card may not be available as much as you’d like, so be sure to carry a few bucks with you to ensure you can tip your barista or merchant directly.

A look at our poll on tipping

MyBankTracker recently polled our audience to see how our viewers felt about tipping. Our findings revealed the following:

  • 44% of people suggest leaving a tip for a mover is proper
  • 60% of people suggest leaving a tip for the hotel concierge is proper
  • 73% of people suggest it is not proper to leave a tip for a band or DJ
  • 80% of people suggest it is not proper to leave a tip for a mechanic

Find out how people feel about tipping a gardener, personal trainer, and more here.

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