Starbucks to prompt more tipping on card payments, fueling 'tip creep' backlash
· Fox News
Starbucks is revamping its tipping system in a major way, the company announced recently, including expanding the tipping options.
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The Seattle-based company said Thursday that baristas will be able to receive tips on more credit and debit card transactions, according to Reuters.
While customers can already tip in-app and in stores, Starbucks is expanding tipping to more credit and debit card transactions, including when customers use the app to pay in-store.
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The coffee giant is also rolling out a new bonus structure allowing baristas and shift supervisors to earn up to $1,200 annually on top of their base pay.
The bonus structure, based on customer service targets and sales, will take effect in July.
Also, employees will be paid weekly starting in August, a move the company said is in response to barista feedback.
In a statement obtained by Reuters, Workers United, the union that represents some Starbucks employees, said the move was "clearly a reaction to our organizing and demands for higher take-home pay for baristas."
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The union also said that bonuses and tips are "largely out of baristas' control."
Starbucks has said baristas — in a fast-paced, customer-facing role that often involves high order volumes — average around $30 an hour when pay and benefits are combined.
Customers "should absolutely expect to see more frequent tipping prompts," said Amore Philip, a public relations strategist based in New York.
"What's happening here is part of a broader shift in consumer culture often referred to as 'tip creep,' where tipping is expanding into spaces that traditionally didn't require it," she told Fox News Digital.
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"For customers, that can create a sense of pressure or even confusion to where consumers may be tipping for service, convenience or simply because the system is prompting you to."
The move is strategic for Starbucks — as higher tips and bonuses could improve morale and translate to better service, Philip said.
"The tension is really about balance," she added. "Consumers are becoming more aware of how often they're being asked to tip, [but] if the experience feels elevated, including faster service, better interactions … customers may be more willing to participate."
The new tipping move is "an easy way for Starbucks to avoid raising prices directly," said Ted Jenkin, managing partner at Exit Wealth Advisors in Georgia.
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"Who wants to give a tip before you even get your latte?" he said to Fox News Digital.
"That defeats the whole idea of a tip."
Fox News Digital reached out to Starbucks for comment.
Reuters contributed reporting.