Monday, March 16, 2015

2423 Tipping Point

I read an article on how the electronic pay revolution is also bringing about electronic tip exaggeration.  A new tipping point if you will.  Because people just don't do math that well.  Also because electronic money doesn't feel like real money.

Las Vegas has known this for years; keep your gambling transactions in virtual money and you gamble more.  Change it to cold hard cash and most folks get more conservative with how they spend it.  Even with cash, if you keep it in large denominations, you fritter it away less.

The article showed a picture of how a bill rendered on an electronic device at a certain mermaid-festooned coffee shop looked to the consumer, when the device was flipped around for him to punch in his approval. 

The bill was $2.78.  A line on the screen below the coffee total was for tips, with four boxes you could press to make your choice.  The choices offered for the $2.78 purchase were "No Tip," "$0.50," "$1.00," and "$2.00."  The highlighted choice, I assume to mean a suggestion, was "$1.00."

The headline of the article, by the way, was, "Tipping: Is 25% the new normal?

Even they find math hard. 

And psychology.  Because your first thought when you look at the choice is, "50 cents, that's really cheap.  I'll pick a dollar."  But the bill is only $2.78.  A dollar would be a 36% tip.  More than a third of the price of the product. 

Even a 50 cent tip is about 18%, certainly generous by many restaurant standards.  15% would actually be 41 cents. 

Hey.  No one wants to be a coffee cheapskate.  But think about this: The original $2.78 purchase included about a 9% sales tax. 

Are we supposed to tip the state and city too?

America, ya gotta love it. 

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