Have you ever hesitated at the checkout, feeling uncomfortable as the worker watched you select your tip? It’s not only you. The rise of digital tipping systems—from point-of-sale devices held by employees to countertop screens that clearly display selections—are changing the tipping dynamic, often in ways in which make customers feel closely watched.
How marketing professors who study digital suggestionswe wanted to learn the way customers react to any such “end surveillance”. So we conducted a field study analyzing 36,000 transactions and conducted 4 controlled experiments with over 1,100 participants.
We compared tipping configurations that provide less privacy – reminiscent of when firms use manual payment systems, when employees face customers, or when apps immediately show employees suggestions – with configurations that provide more privacy, reminiscent of counter payment systems, employees facing away from customers, and apps that reveal directions only after the service has been performed.
Our the results were clear: High levels of surveillance are bad for business. Customers who felt watched while tipping were less likely to return or recommend the business. While privacy often made customers feel more generous and in control of their decisions, feeling controlled led to resentment and less loyalty.
Interestingly, research shows that folks enjoy watching after they donate to charity. So why is tipping different? Perhaps that is because tipping is not entirely voluntary – it’s often seen as an expectation. When customers feel pressured, they lose their sense of control, which makes tipping a positive experience.
Welcome to the payment panopticon
During a digital tip can be convenientalso can contribute to ‘tipflation’ – feeling that waiting for suggestions got uncontrolled. If businesses want to be certain customers keep coming back, our research shows they’d do well to give customers privacy when tipping.
One problem may be that some employees think they’re keeping an in depth eye on customers encourages them to tip generously. However, we didn’t find a straightforward relationship between tip privacy and tip amount. While privacy allows customers to tip less in the event that they select, we have found that it also often encourages them to be more generous. These effects mean that customers pass on similar amounts whether or not they have privacy or not.
It’s crucial for businesses to strike the right balance between giving customers control and supporting generosity. An organization that trains its employees to keep customers private when tipping, and makes sure it pays those employees fairly in order that they do not have to put pressure on customers in the first place, will likely earn a greater status and a more loyal customer base.
More horizons of dump trucks
Tipping can be a feel-good and empowering experience feelings of generosity AND social status. It also can be a source Bow. And for higher or worse, digital technology is here changing the way we tip. People tip today more cashto get more services and in more places than ever before.
As firms, customers and even politicians As we debate how best to integrate digital tipping into our world, our research shows how necessary it’s to think holistically. In our opinion, it is best to not focus solely on this increasing income from suggestions for workers but also further creating positive experiences for customers.
More broadly, customers, employees, businesses and society may want to consider how to create a tipping system that protects staff’ rights and dignity while ensuring fair wages and enabling customers and business owners to reward staff who contribute providing great service.