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Makers Of the DipJar Hope That Dipping To Tip Catches On

Filed by KOSU News in Business.
September 17, 2012

As Americans increasingly rely on cards, not cash, to pay for small items like coffee and snacks, it’s not always easy to tip the baristas and counter folks who make those transactions run smoothly. A new device called the “Dip Jar” might fix that, by allowing customers to dip a card to give $1 to the staff.

That might come as welcome news to workers behind the counter, who’ve seen debit and credit cards take over from cash. As a result, there’s less change from which to pull a tip for the traditional jar that’s often seen on counters where coffee, beer, or sandwiches are sold.

The DipJar — a metal cylinder with a card-reader embedded in its center — was inspired by CEO Ryder Kessler’s realization that the staff at his local coffeeshop wasn’t profiting from a sudden spike in card-wielding customers.

The company’s jars can be set to exact a $1 transaction on any card that’s dipped into them (other amounts can be set, as well). Because many businesses and credit card companies don’t require a signature on purchases that total less than $25, the transaction can be a fast one. The jar gives out a little dinging sound for each tip.

But the Dip Jar faces some hurdles.

First, there are the fees — a small one from DipJar and a larger one for the credit card issuer. The company says it doesn’t charge retailers anything for using the system.

“We will always deliver at least 80¢ of a $1 tip to employees, and we’re working frantically to get that amount up to 90¢ or more,” the company says.

Because of costs like that, many in the service industry prefer to receive tips in cash — separate from the credit card transaction.

Part of their reasoning is that business owners often take a portion of their employees’ gratuities to cover the transaction fee. Managers might also delay giving servers their credit-card tips — weekly instead of daily, for instance. And (it must be said), keeping the tips in cash might also allow less scrupulous servers to report less income for tax purposes.

You can read a multi-faceted debate of that topic on the Chowhound site.

DipJar is currently in a trial phase in New York City. And The New York Post reports that reactions have been mixed.

“I get a check for, like, six dollars every two weeks,” a barista told the paper. “Either people aren’t using it or DipJar is stealing our kit. I think people just don’t notice it.”

Of course, tipping in cash requires a well-stocked wallet. And the trend is pointing in the other direction, toward a wallet that’s stocked with plastic — or a cellphone that’s connected to bank accounts. DipJar says it’s working on a phone-ready system, as well. [Copyright 2012 National Public Radio]

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