Starbucks Expands Digital Tipping Option
You can do practically anything with a mobile phone these days including tipping your favorite barista. Could such apps be another path for rewards programs and tapping customer needs?
March 24 2014 by ChiefExecutive.net
The Seattle coffee chain says the mobile tipping option, an app which it announced more than a year ago, will be available starting March 19, according to a report by AP writer Candace Choi. The rollout comes as the company’s app has surged in popularity, with roughly one out of every 10 purchases now made with a mobile device.
After paying with the app, Starbucks says customers will be able to leave a tip of 50 cents, $1 or $2 anytime within two hours of the transaction. The tipping option will only be available at the 7,000 of the roughly 11,000 Starbucks locations in the U.S. that are owned by the company.
The move puts a spotlight on what can be a sensitive topic for customers, workers and even Starbucks, which has faced lawsuits over how it divvies up the contents of tip jars among workers. Some customers are happy to tip for friendly service, knowing that baristas don’t earn that much. Others say that they already fork over enough money and shouldn’t be made to feel like they should throw money into a tip jar as well.
The question is can similar apps be created for taxis, hotel services, bars and restaurants and other places where transactions frequently call for cash payment? And what about customer information capture? Can such an app be another pathway to collect frequent user data and rewards programs?
Starbucks, meanwhile, has been pushing to get people to sign up for its mobile app and rewards program, which helps boost the number of times people are likely to visit its stores. The company says the addition of the mobile tipping option is a response to demand from customers, many of whom no longer carry around much cash.
“We asked our customers what they thought would be easiest and best,” Adam Brotman, chief digital officer for Starbucks, said in a phone interview. There are no plans to bring the mobile tipping option to stores licensed to other operators, however.