Social Media User Explains How Tech Companies Like Toast Are Shaping Tipping Culture

The internet is abuzz with debates on tipping culture. It seems like everywhere you turn, from buying a cup of coffee to ordering a sushi burrito or even shopping for jewelry online and even at a hairdresser's, customers are being nudged to leave a little extra.

Even if a business already pays its staff a regular wage, they still prompt you to tip. This trend has disturbed many and sparked debates and discussions on social media, with folks wondering why it's suddenly so widespread. What's interesting is how all sorts of businesses, seemingly unrelated, are jumping on this tipping bandwagon. It's like they've all adopted the same "ask for a tip" protocol, no matter what they sell.

But why is this tipping trend so widespread all of a sudden? Why are so many many seemingly unrelated businesses around the country adopting this "flip-around-the-iPad-it's-going-to-ask-you-a-few-questions" routine?

Toast's role in tipping culture

TikToker Matt Epstein, @matt_epstein, has an interesting idea for why tipping alternatives have suddenly become common in locations where they were previously a last-minute addition. According to Epstein, companies such as Toast, which provide point-of-sale systems, are giving away expensive equipment to get businesses to use their services. Toast earns a share of a company's revenues, particularly for giving free equipment, so it's in their best interests to push customers to spend more.

Toast's strategy to make tipping the default

According to the TikToker, Toast made tipping the default setting on its tablets and purposefully made it difficult to disable tipping, and in case, the restaurant operators want to suspend tipping they are forced to go through various tedious documentation. He credits the growing prominence of tipping culture to businesses such as Toast and their competitors. He believes that the rise in tipping culture is driven by Toast's desire to increase revenues from its 3% transaction charge, not by firms seeking to enhance workers' wages.

In his video, Epstein explains how, just a decade ago, you wouldn't be overwhelmed by tipping cues when buying your morning coffee. But it seems like everywhere you go, from grocery stores to self-checkouts, you're asked whether you want to give a tip. He argues that Toast's strategy is to make clients feel guilty for not tipping.

Toast's revenue model

Epstein claims that Toast distributes tablets to businesses for free, although it's worth noting that the free package often only includes one terminal. However, to use several terminals and additional functions, business owners must pay a monthly fee. Despite the "free" equipment, Epstein shows that Toast still makes money by charging a 3% fee for each transaction processed through their devices. So, if a consumer spends $100, Toast earns $3. Essentially, if a consumer leaves a tip, Toast earns more.

According to Epstein, Toast is actively encouraging consumers to tip just by touching their cards, making it the default choice for leaving a tip. He speculates that Toast has purposefully normalized and streamlined tipping to make it effortless. He then asks viewers whether they generally leave a tip when requested on the tablet or whether they prefer to press zero. Indeed, Toast offers thorough instructions online for altering tip settings and enabling features such as tip withholding. However, discussions online indicate that default tip percentages, like 20%, 25%, and 30%, are common on POS tablets.

Viewer reactions to tipping practices

Epstein's video was watched by many who also expressed their views on hesitation to tip, with some frustrated by the practice. One person stated that they always choose $0 and do not feel horrible about it.

Another expressed their refusal to be swayed by the iPad's prompts: "No matter how many times that iPad is flipped around on them, they will not take the bait and keep their money to themselves."

Some were concerned that Toast would profit from these tips rather than the employees who deserved them. One customer stated that they prefer tipping using traditional ways such as a tip jar rather than contributing to the company's earnings.

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