Technology allows companies to overcharge you with tips

Technology allows companies to overcharge you with tips

Technology allows companies to overcharge you with tips

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


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

Payment technologies allow merchants to display a set of default tip amounts – for example, buttons for 15%, 20% and 30%, as well as the “no tip” or “custom tip” button. This configuration makes it easier for us to choose a generous tip, rather than a smaller tip or no tip at all.

Many studies document this type of behavior. Ted Selker, a product design veteran who has worked at IBM, Xerox PARC and elsewhere, has conducted previous research to encourage people to register to vote. He found that they were more likely to register if this option was pre-selected when filling out driver’s license and change of address applications. In other words, people were much more likely not to opt out than to participate.

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

A larger problem remains: when companies that don’t typically receive tips use technology to present a tipping screen, they’re asking the consumer to opt out.

“It’s coercion,” Mr. Selker said.

On the bright side, tip screens aren’t considered misleading, said Britain’s user experience consultant Harry Brignull, because the “custom tip” and “no tip” buttons are about the same size as tip buttons. If the mute buttons were extremely hard to find, it would be an abusive practice known as “dark patterns”.


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