Tech is allowing businesses to charge you more in tips

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You may be wondering why I, a technology columnist, would be writing about tipping. This is because tipping is no longer just a socioeconomic and ethical issue regarding the livelihood of service workers.

It has also become a technology problem that is rapidly spiraling out of control due to the proliferation of digital payment products from companies such as Square and Toast. Since payment applications and touch screens make it easier for merchants to determine gratuity amounts, many businesses that normally did not ask for tips now do.

And many consumers feel pressured to comply or ignore charges. This phenomenon – known as “guilt tipping” – was compounded in recent years when more privileged professionals shelled out extra to help essential workers weather the pandemic. But even though business has returned to some degree of normalcy, gratuity requests have remained constant.

Tipping practices could form part of a wider government crackdown on so-called junk fees, extra costs that businesses attach to products and services while adding no value. The Federal Trade Commission, which announced an investigation into the practices last year, said people could experience “junk fee shock” when companies use deceptive technical designs to drive up costs on the buying end.

I’ve felt the pain and awkwardness of arbitrary tip requests. I was recently taken aback when a grocery store’s iPad screen suggested a tip of between 10 percent and 30 percent — a situation that was made all the more unpleasant when I hit the “no tip” button. And the cashier gave me a glare.

When a motorcycle mechanic asked for gratuity with the screen of his smartphone up, I felt pressured to tip because my safety depended on his services. (It still felt wrong, since I had already paid for his labor.)

I shared these examples, along with stories I’d read across the web about consumers angered by unusual tipping requests, with user-interface experts who work on tech and financial products. All agreed that although it was good that paid services extended gratuities to service workers who relied on them, the technology created a bad experience when consumers felt coerced by businesses that typically do not expect tips. Were.

“If your users are not happy, it will come back and bite you,” said Tony Hu, a director at the Massachusetts Institute of Technology who teaches courses on product design. “Ideally they should make tipping an excellent experience.”

Based on my conversations with design gurus, the reverse is true of all of this. If we focus on the technical design aspects of tipping, we can take the pressure off of tipping in the same way that we grapple with issues like digital privacy. Let me explain

In 2013, Square released a point-of-sales product that replaced cash registers by allowing vendors to input an order into a tablet and allow customers to swipe a credit card to add their signature and tip. Square has said that its products have led to a big increase in tips for many businesses. Its technology has since been widely copied by many brands, and traditional cash registers are a rare sight.

A key driver of the success of digital payment systems, said design experts, is that they take advantage of a design principle that influences consumer behavior: the default is the path of least resistance.

Payment technologies allow merchants to display a set of default tipping amounts — for example, “no tip” or “custom tip” buttons along with buttons for 15 percent, 20 percent and 30 percent. This setup makes it easier for us to choose a generous tip rather than a small or no tip.

Lots of studies document this type of behavior. Ted Selker, a product design veteran who worked at IBM, Xerox PARC and elsewhere, led past research encouraging people to vote. They found that they were more likely to register if that option was selected when filling out an application for a driver’s license and change of address. In other words, people were much more likely not to opt out than to opt in.

A Square spokeswoman said the company’s payment technology doesn’t allow merchants to pre-select the tip amount (except when tips are added automatically for large groups at restaurants, an industry standard). But in my experience, some imitators of Square allow traders to do this.

A broader issue remains: When businesses that would not normally receive tips use the technology to present tipping screens, they require the consumer to opt out.

“It’s coercion,” Mr. Selker said.

On the bright side, the gratuity screen isn’t supposed to be deceptive, said Harry Brignole, a user-experience consultant in the UK, because the “custom tip” and “no tip” buttons are roughly the same size as the tipping buttons. If opt-out buttons were extremely difficult to find, this would be an abusive practice known as a “dark pattern”.

Still, if people feel undue pressure to tip in situations where gratuity is unnecessary, government agencies such as the Federal Trade Commission should examine that concern through a regulatory lens, Mr. Brignole said.

The FTC did not immediately return requests for comment.

I recommend approaching tipping the same way you might approach technology: Be mindful of the omission, and decide when it’s right to opt out.

In a previous column, I went over the default settings that I and other technology writers always turn on on our devices and social networking accounts to minimize the amount of data we share with tech companies. The moral of the story was that we can exercise some control over our personal information – we just need to know where to look and do the extra work.

The same principle can be applied to tipping in the digital age. When a business asks for a tip, that technology is nothing but an emotionless software showing numbers. You, too, can be neutral and objective when deciding whether to tip and, if so, how much.

“When the whole point of tipping is to personalize it, they are objectifying the transaction,” Mr. Selker said. “Your mind must be whether this is really what you want to do?”

The best way to avoid feeling controlled by a screen, he said, is to tip in cash whenever a gratuity feels necessary.

If you are displeased with how a merchant uses technology to solicit tips, you can even boycott it (though this may be impractical now that so many businesses use this technology). This isn’t too different from the actions of those who deactivated their Facebook accounts when they felt their privacy had been violated.

Even design experts are sometimes caught off guard by defaults on tipping screens. MIT’s Mr. Hu said he was recently presented with tipping options of $1, $3 and $5 after a $10 Uber ride. He chose the middle button, $3, before realizing that he would normally tip the driver 20 percent, or $2.

“It’s a psychological mind game,” he said.

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