In the U.S. October 1st marked the official date new regulations are in effect for the new EMV chips embedded in credit and debit cards. In the last several months, banks and retailers have been busy trying to get as many customers as possible to exchange their old cards in return for new cards with the increased security protection that EMV chips offer.
In addition, retailers, restaurants and any store that accepts payments via credit or debit card are required to install new equipment that is capable of processing the new cards and using increased security measures. If they do not have the new equipment, then they are liable for any fraudulent charges, as opposed to their bank, which covered fraudulent charges in the past.
The changes and adjustments that merchants are making and will need to make in the future have been well documented in recent months. Many customers are asking themselves how the new changes affect them. The truth is, the new cards will no affect the user in any real noticeable way, except maybe the way you tip.
Over 80% of Americans eat at a restaurant at least 2x each month, we would guess the frequency at bars is even higher. So tipping on your credit card is kind of a big deal. With the EMV Chip cards, instead of being left with a paper bill and a few minutes alone to decide how much you want to tip, consumers, will have to enter and approve all transaction information on a touch screen payment-processing terminal with the restaurant or store attendant present.
Not really a big deal right? Well... for some it might cause a little more stress when deciding what to tip your server though.
The Adjustment Period
There is going to be a period of time for customers to adjust to a server watching as you enter their tip. This might come with slight discomfort to some. It's a lot easier to leave a bad tip on a piece of paper and then dash out before your server notices. Even when people give bad service, it's not in our nature (most of us, that is) to blatantly confront them. We tend to prefer to let the tip do the talking. But what now? You'll have to enter the tip with the server directly in front of you. Some studies have come out, that anticipate customers are going to tip higher than they normally would just due to the added pressure of the server being present.
Obviously, this is good news for those that work in the service industry, as they are poised to receive a raise for doing the same job they are currently doing. However, for consumers, this is not necessarily good news or bad news, perhaps just a little uncomfortable as they try to figure out how to handle certain situations.
How Should Consumers Tip Going Forward?
In the U.S., tipping is and always has been a direct reflection on the level of service you receive, or it is supposed to be. Therefore, as a consumer, you should tip at a level that accurately reflects the performance and service received. This may be difficult in some cases, especially if you have to look at a waiter directly in the eye while you enter a paltry 3% tip. However, by rewarding bad service you are not doing yourself or the employee in question any favors.
In some cases, the employee in question may be a high school student, college student or new to the job market. If they do not see and feel the results of good and bad performance, then they may not efficiently develop the skills and knowledge required to move their career forward.
While the new way of handling credit and debit card transactions does not change anything as far as how much you should tip, it does require consumers to have a greater commitment to the principles of tipping.
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