How the cashless economy put more money in the pockets of Seattle workers

The coffee counter has become a cashless high-tech experience. For most workers, especially in cities as expensive as Seattle, this is a very good thing.

Jars full of change were replaced by tablets with three options after someone stuck their credit card on a small cube: 15%, 20% and 25%. The customer can choose one of them, or guiltily chase the “no tip” tab. Few do.

Due to new technology, customers are tipping more than ever, and servers often know before providing service how much a customer has tipped, or if they simply abstained. Tipping has changed and is changing the client-worker relationship.

Most people haven’t paid much attention to the automated process now happening on a tablet, said Nathan Warren, associate professor of marketing at BI Norwegian Business School, who has written several articles on tipping. But there are those who are angry about tipping when they haven’t received service yet. Others increasingly see tipping as their social responsibility, Warren said.

The normal restaurant tip these days is 20%.

Customers have started noticing the change in tipping at the Van Gogh Coffeehouse in Wedgwood because of COVID-19, said Amanda Parmenter, a supervisor there. Instead of asking people to tap a screen to select tips, baristas have started asking customers how much they’d like to tip. Some would say not at all.

“We definitely don’t like it, and we’ll definitely talk about it,” Parmenter said. “It sometimes feels like a little slap in the face when they say ‘No’.”

Along with the shift to cashless (or nearly cashless) POS systems, delivery and pickup apps have also made it easier to tip.

As more people ordered delivery during the pandemic, the average tipping percentage in face-to-face situations declined, according to a new study by Michael Lynn, a Cornell University professor who studies tipping practices. tip.

Services like Uber Eats and DoorDash give customers the option to tip before or after delivery, rather than handing over cash to the delivery person. In many cases, customers do not interact with the person delivering their orders. But they tip more than before.

“The pandemic has increased the average tip per order given to a pizza delivery driver,” Lynn said in a 2021 article analyzing how COVID affected tipping.

Starbucks has a similar tipping structure. Instead of jars when customers walk to the checkout, customers can tip as an add-on on the Starbucks app after picking up their order. Starbucks’ system, Warren said, is an example of what a good tipping system should be.

But new technologies have not completely eliminated cash. Justin Wong is the captain of a fishing boat with Seattle-based Cut Plug Charters. He said he gets at least $100 in tips after most outings. Most of the time these are cash, although some anglers use credit cards. Wong said people often ask in advance if they should tip.

“Tipping is based on the price of your charter, not what you did in the 1980s tipping $10 or $20. Charters back then were much cheaper than they are today,” Wong said.

The company charges people $1,200 for a private boat, or $275 per person on a shared charter.

Inequalities have persisted in tipping, even with new technology, Warren said. Women might tip more than men because of their appearance. And while servers can be tipped, people working in restaurant kitchens don’t have the same opportunity.

In July, employees of the Capitol Hill Barrio restaurant came out to protest the restaurant’s pool tipping system. They claimed there was not enough transparency in how the pool was distributed. The restaurant’s parent company settled a lawsuit in 2021, claiming the company failed to properly allocate service charges.

Maids and movers are now struggling to get tips in their jobs with the cashless economy and little face-to-face contact with customers because of the pandemic. Fast food workers do not receive tips by default.

“People have these different perceptions,” Warren said. “The person who works in a small business feels like my peer, so I will help them.”

In most cases, companies set tip options on the monitor. They use systems from companies such as Toast, a point-of-sale and management system for restaurants.

“Because the restaurant sets these options by default, it does not dictate tip percentages,” a Toast spokesperson said in an email, “but may allow for larger tips.”

Square, another point-of-sale service, and Toast do not receive tips, spokespersons for the two companies said.

In the past, Jimi Cunningham, a server at the El Gaucho steakhouse, would come home late at night with the tips he earned that day. Now, at 54, he gets paid twice a month. His paycheck consists of his base salary and service charges. El Gaucho has a 20% service charge – 15% goes to the server and 5% to the back house.

Cunningham said predicting how much he would earn in tips is “like going to a game”.

Despite a digital point-of-sale device, Van Gogh Coffeehouse still tips workers in cash at the end of their shift. Cafe patrons are greeted with a sign that reads, “Cash is preferred, but not required.” Credit card transactions incur high per-transaction fees paid by companies. Many customers carry cash, Parmenter said. But even if a customer pays with a credit card, the tip is converted into physical money later.

Parmenter, who lives in Lynnwood with her boyfriend, says about half her income comes from tips. This is how she can afford to live in such an expensive metropolitan area as Seattle, she said.

“If I didn’t have tips,” she said, “I couldn’t live on what I do.”

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