April 30, 2013

Tip of choice

A line that caught my eye towards the end of a Grub Street article on Square, the mobile payment app: (emphasis mine)

The perk that sounds best is the way Square handles tipping. Instead of feeling guilty if you don’t have a dollar bill for the tip jar, customers decide on tips after they leave. When you walk out of a Square merchant, you get a push notification asking you if you want to tip,” Dorsey explains. You can do it on your own time.” You might think that would empower cheapskates, but Dorsey says businesses that use Square have actually seen a 22 percent bump in their tips.

Another startup is doing the exact opposite to incite tipping: DipJar wants to eliminate the no cash” excuse by placing electronic tip jars” on counters, where customers can dip their credit card to leave a tip.

This reminds me of a persuasion technique called But You are Free”: You increase your chances of getting a yes” by reaffirming the other side’s right to decline the request. Psyblog recently reviewed just how effective it is:

A recent review of the 42 psychology studies carried out on this technique has shown that it is surprisingly effective given how simple it is (Carpenter, 2013). All in all, over 22,000 people have been tested by researchers. Across all the studies it was found to double the chances that someone would say yes’ to the request.

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