Payments

Self-checkout tip requests draw criticism

Image: Adobe Stock.

May 8, 2023

As self-checkout expands at retail, shoppers are noticing checkout screen requests for tips, requests that are causing some consternation among consumers, according to a report in The Wall Street Journal.

Researchers and labor advocates claim the automatic tip request that oftentimes comes before final payment at self-checkout is a a way to generate revenue for employees instead of raising employee wages.

Retailers employing the optional requests say the tips are a way to offer thanks.

A spokesperson for OTG, which operates restaurants and stores at airports, said all tip revenue goes to employees.

While employers are required legally to provide all tips to workers, some researchers said tips given to a machine may not reach human employees since protections under the federal Fair Labor Standards Act don't extend to machines.

Square, which provides technology for iPad point-of-sale machines, said tipped transactions rose 17% at full-service restaurants and 16% at quick-service restaurants in Q4 2022.