Starbucks' New Tipping System Is Coming Under Heavy Fire
You're likely to hear lots of impassioned opinions when bringing up the subject of tipping culture in America. According to the US Department of Labor, a tipped worker is any person who earns more than $30 in tips on a monthly basis. The federal minimum cash wage for these workers is just $2.13, although state minimum wages are usually much higher than that. Regardless, many people within the service industry rely on tips to survive, and patrons should be happy to supply tips when they have an enjoyable experience at an establishment.
The real controversy arises when tipping culture extends to other types of employees and services. WCNC explains that many establishments are now offering digital tipping options during transactions, including for workers who are not normally tipped. In some cases, these employees are not waiting on customers in the traditional sense, which leaves consumers scratching their heads as to why they're actually being asked to provide tips in the first place. Even Starbucks is not immune to such controversy, as the company recently became embroiled in the tipping debate after updating its digital gratuity strategy.
Why both customers and staff are unhappy with the change
Nasdaq highlights Starbucks' impact on coffee culture since its opening in 1971. Among its many notable achievements, Starbucks is also well known for embracing digital technology to make for a more convenient experience. NBC Chicago reports on one recent technological advancement enacted by the chain that has been met with a fair amount of controversy. Customers using cards to pay will now receive a prompt on the digital display asking them to leave a tip. This practice is largely uncontroversial when transactions take place in a physical location, but drive-thru customers are having a hard time justifying the gratuity for what they consider a "brief interaction."
Some Starbucks employees are also unhappy with the recent update, per Insider. While a portion of staff members have received an influx of tips from customers after the update, others bear the brunt of customer dissatisfaction with the new system. In addition to balking at being asked to leave a tip, customers are also frustrated with the drive-thru transaction process. Because employees cannot enter tip information on their own, they must physically hand a card reading device to the customer. And because responding to the tip prompt is mandatory to access the pay screen, customers complain they're being put in an awkward position. Oddly enough, Starbucks implemented this new system as part of its latest improvement strategy.
The philosophy behind Starbucks' revamped tipping strategy
In an effort to facilitate lasting growth of the business, the coffee retailer recently launched a "Reinvention plan," according to Starbucks' website. The overall goal is to enhance the business's bottom line, which CEO Howard Schultz hopes to achieve through a series of strategic changes. When it comes to customers, Starbucks aims to provide more customization options for its menu items, as well as offer a more convenient experience both in physical locations and when using the app.
The Reinvention plan also focuses on the chain's "partners," meaning its employees. This is precisely where the new digital tipping strategy comes in, which is one of many solutions that Starbucks hopes will boost the "overall pay" of its staff. Despite this noble goal, many employees are wondering whether the extra money is worth the hassle of handling aggrieved customers. According to one partner on TikTok, the new system is "top 10 worse [sic] disasters to ever happen to humankind." While that might be stretching it a bit, it's definitely not the smashing success the company intended.