Is it good or bad that customers can tip workers electronically at Starbucks? Good, to the extent that they are paid very poorly. Good, to the extent that the cash tip jars always looked empty. Bad, to the extent that there are usually three tip levels on the screen where people see and approve their credit card charges. The levels are usually $1, $2 and $5. (These companies have the worst reputations.)
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The employees watch the customer tip electronically. That puts on more than a little pressure to tip or not to tip at lower levels. It is a minor scheme, but a scheme nevertheless.
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Starbucks workers should have the chance to get tips. For decades, the only means was via cash, although people could use credit cards and Starbucks-branded cards almost that entire time. Those customers could not tip electronically, even if they wanted to. Workers who are paid $15 an hour should have a chance to be thanked by customers and make something more than their base pay.
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Tip jar amounts were almost always near empty. Presumably, the tips were spread among the staff, which means any one of them was lucky to get a few dollars.
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How does the problem get solved? Although it would take a few extra seconds, customers should be able to decide on the amount of their tips. However, the employee is still hovering there, so the pressure is not gone altogether.
The Starbucks Tipping Scheme
© pamela_d_mcadams / iStock via Getty Images
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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