Pressure on the tip may work in the moment, but customers will be less likely to return

Have you ever hesitated at the checkout, feeling uncomfortable as the employee watched you choose your tip? It’s not just 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 lively, often in ways that make customers feel closely watched.

How marketing professors who study digital tipswe wanted to find out how customers react to this type of “end surveillance”. So we conducted a field study analyzing 36,000 transactions and conducted four controlled experiments with over 1,100 participants.

We compared tipping configurations that provide less privacy – such as when companies utilize manual payment systems, when employees face customers, or when apps instantly show employees tips – with configurations that provide more privacy, such as 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 people enjoy watching when they donate to charity. So why is tipping different? Perhaps that’s because tipping isn’t 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 convenientcan also contribute to ‘tipflation’ – feeling that waiting for tips got out of control. If businesses want to make sure customers keep coming back, our research shows they would do well to give customers privacy when tipping.

One problem may be that some employees think they are keeping a close eye on customers encourages them to tip generously. However, we did not find a straightforward relationship between tip privacy and tip amount. While privacy allows customers to tip less if they choose, we’ve found that it also often encourages them to be more generous. These effects mean that customers pass on similar amounts whether they have privacy or not.

It’s crucial for businesses to strike the right balance between giving customers control and supporting generosity. A company that trains its employees to keep customers private when tipping, and makes sure it pays those employees fairly so they don’t have to put pressure on customers in the first place, will likely earn a better reputation and a more steadfast customer base.

More horizons of dump trucks

Tipping can be a feel-good and empowering experience feelings of generosity AND social status. It can also be a source Bow. And for better or worse, digital technology is here changing the way we tip. People tip today more moneyto get more services and in more places than ever before.

As companies, customers and even politicians As we debate how best to integrate digital tipping into our world, our research shows how essential it is to think holistically. In our opinion, you should not focus solely on this increasing income from tips for employees 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 workers’ rights and dignity while ensuring fair wages and enabling customers and business owners to reward workers who contribute providing great service.