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Digital on-screen tipping: How the business practice came to be at restaurants and more
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Sergio’s Restaurant president and CEO Carlos Gazitua explains how robot waiters help to serve more tables while making human employees more tips.
Tipping remains a controversial topic as Americans appear to feel differently about the service industry and the level of work that goes behind it.
In recent years, more companies have enabled selectable tipping features through their point-of-sale (POS) systems and social media users have been sounding off – with some saying they feel pressured whenever a cashier turns the digital kiosk around to request gratuity.
"The 'Add Tip' when you’re just walking into pick-up/fast-food restaurants or stores is getting out of hand," one person tweeted in February. "Pay your employees more so I have to quit getting awkward…"
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"Asking a customer if they want to tip on the screen at any register of any fast food company was the worst idea ever," another Twitter user vented in December, adding that they're "tipping for no reason."
FOX Business took a look at how the business practice came about and how people can navigate tipping etiquette.
How on-screen tipping became a thing
Bob Vergidis, founder and chief visionary officer at pointofsale.cloud – a cloud-based POS system in Cincinnati, told FOX Business that on-screen tipping became "mainstream" thanks to Square – which is often considered a leader in the POS industry.
The Square POS System, which is owned by Block, Inc. – a financial services company led by former Twitter CEO Jack Dorsey – revolutionized merchant services and mobile payments with portable credit card processing machines that work with phones and tablets.
Real-time sales intelligence company Enlyft estimates that 14,330 companies use Square and "are most often" found in the U.S. and restaurant industry.
"What made Square successful was how frictionless it was for virtually anyone to accept credit cards, and since back then you had to ask people to sign for their credit card on the screen, it was an easy leap to ask the guests to select the tip amount," Vergidis said.
"Then it grew based on human psychology, he added. "Humans are very good at taking the shortest path to a solution and pressing a button to select 15%, 20% or 25% was much easier than having to calculate the tip in your head."
FOX Business reached out to Square for comment.
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Vergidis added that researchers in the POS industry have conducted experiments to encourage "higher tips" and have found that on-screen tipping options can drive tips up by "20% to 40%."