Ditching Automatic Tipping: How to Tip Independently in Card Payments
How to Easily Increase Your Tips When Using a Credit Card
In today's world, more and more of us are encountering a screen filled with tipping options when paying for goods or services with a card. Whether it's at the bakery, hairdresser, or corner shop, these choices often include pre-set percentages like 10, 15, and 20, as well as the option to not tip at all. But for the uninitiated, these screens can feel quite daunting, especially for those not used to tipping in countries like Germany, where it's usually a voluntary gesture by the customer.
So, what's the deal with these card terminal tipping screens? Well, it's all about nudging - subtly influencing people into making certain decisions in their day-to-day life without any explicit rules or restrictions. According to economist Prof. Julia Pitters from IU Internationale Hochschule, "We prefer to make things easier for people when it comes to decision making." But who really benefits from this nudging? Let's delve into the details of this intriguing topic.
How Does the Appearance of Tipping Options on a Card Terminal Affect Consumers?
The impact on consumers varies from person to person. For some, the convenience of being able to tip without having to calculate is a welcome feature. However, others may find the pressure to tip overwhelming, resulting in a choice not to tip or even avoiding the establishment in question.
From the provider's perspective, offering tipping options on card terminals is a clever move, according to Prof. Dominik Enste, a behavioral economist from the Institute of the German Economy. Since tipping is often forgotten during card transactions, these reminders can help to jog a customer's memory. "It gives the impression that it's common," says Pitters. People are strongly influenced by social norms and usually don't want to stand out, so they often choose to tip.
Do People Typically Tip More or Less When Presented with Tipping Options?
The use of nudging, designed to prompt people to consider tipping, generally leads to an increase in tips overall. However, the amount each individual tips depends on their usual tipping habits and the options presented on the payment terminal.
Many business owners are aware of this psychological effect and strategically choose their tipping options. In Germany, tips usually range between 5 and 10 percent. If the lowest option starts at 10 percent, it sets a different anchor, causing customers to choose a higher tip than they might have otherwise.
Why Is Choosing "No Tip" So Difficult for People?
The difficulty in selecting the "no tip" option arises from the way the choices are presented. When faced with multiple options, the "no tip" choice can be perceived as an active decision, making it less appealing. Additionally, people tend to follow the path of least resistance, opting for the default or middle option.
"People often feel reluctant to choose 'no tip' because they don't want to appear stingy," says Pitters. This reluctance may cause discomfort if the decision is immediately noticed by staff members or even bystanders.
To escape this pressure situation and make tipping decisions more freely, it's best to think ahead. Reflect on how much, if any, tip you'd like to leave before making a payment, so you're less likely to be caught off guard by unfamiliar tipping options on the card terminal. Sharing opinions with others may help shift your internal compass, as you'll discover that others may also have mixed feelings about tipping and prefer having more freedom in their decisions.
- Aware of the impact of tipping on personal-finance, some community policy makers might consider regulating the automatic tipping options in card payments, especially when these options pressurize consumers to tip, thus leading to financial imbalance for certain individuals.
- In the realm of personal-finance management, it's crucial for employment policy to provide guidance and resources for employees in understanding the technology used in card-based tipping systems, so they can make informed decisions about tipping and manage their finances effectively.
