NEW YORK (CBSNewYork) — Workers who rely on tip jars to bolster their incomes have noticed a dip in tips because of an increase in the use of plastic for purchases.
To combat the problem, new technology called DipJar has popped up in some cafes and shops across the city.
“They work hard and deserve a good tip,” Manhattan resident Mario Arcari told CBS 2’s Dave Carlin on Wednesday.
DipJar allows a customer to swipe their debit or credit card to give a preset $1 tip to the employees of the store or restaurant.
“We wanted to make it a one-step process,” DipJar inventor Ryder Kessler told Carlin.
DipJar is free to retailers. Kessler, a Columbia University graduate, said DipJar collects less than 10 percent on each swipe, with the rest of the tip going to the store’s employees.
“They’re working so hard they are taking home less money now because of these payment trends over which they have no control and we want to help them recoup some of those lost tips,” the 26-year-old Kessler told Carlin.
At a Midtown coffee shop, a barista told Carlin that her weekly tip take-home has gone up nearly 20 percent since the installation of the DipJar.
“It’s a help, every little bit helps,” Yvonne Hartung told Carlin.
But it’s a mixed bag on whether people will use the technology to tip workers.
“I have no problem using the DipJar,” one man told Carlin.
“I prefer using cash,” a woman added.
DipJar uses encryption to securely transmit credit card information to its servers. The company does all the math, cuts the tip checks and delivers them to the merchants to dole out to workers.
DipJar is still in the process of testing out the product but said it hopes to have more e-tip jars in stores soon.
Since there is an electronic record of all tips collected with DipJar, the workers must be extra careful to accurately report them to the IRS.
Would you use a DipJar to give a tip, or do you prefer to use cash? Share your thoughts below…