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"Liz Vayda, who owns Baltimore plant store B.Willow, says the tipping option she added to transactions during the pandemic generates about $1,000 every two week

"Liz Vayda, who owns Baltimore plant store B.Willow, says the tipping option she added to transactions during the pandemic generates about $1,000 every two weeks. Five employees split the money. She acknowledges the requests aren’t perfect. “It makes me feel uncomfortable as a business owner to know people are like, ‘Why doesn’t she just pay them more?’ It’s just not that simple,” Vayda says. Ultimately, she says retaining staff is more important than the possibility of annoying some customers. " She can't afford to pay her employees an extra 200 a pay check? Yet she is bringing in that much extra money through a tip screen. She can afford it. Edit: some spitball math, if she's getting an extra %15 in revenue from a quarter of her sales (if 1-in-4 tip), she's taking in approximately $27k every 2 weeks. She could raise her prices by less than 4% to cover paying her employees more.

solarmist 3y ago
Yup. She just doesn’t want to pay them more.
hgsgm 3y ago
You have no reason to believe that charging 4% more would have the same level of sales. Some people tip a lot. Others tip 0.
- thx-2718 3y ago
  Raising prices isn't the only way to raise revenue. Especially if it's a product that consumers are very price consciousness of (though I suspect a bespoke flower/pottery shop isn't one). She can lower prices through sales to increase revenue needed to pay her employees more and grow her business. She has options that are alternative to frustrating or bothering her customers to subsidize her wages.
somethoughts 3y ago
I agree it for sure sucks - its kind of like hidden fees at hotels. I think from a game theory perspective it makes rational economic sense in that if all of your competitors are going the tipping route and you don't, then you will appear to be 20% more expensive than the competition to people who are walking by on the street. A nice way to handle this would be to heavily advertise that gratuity is included on the menu and spell out per item what the pre-charged gratuity is. In order words instead of just showing the price+gratuity on the menu: Hot Dog - $12 show the breakdown: Hot Dog - $10 + $2 Gratuity

solarmist 3y ago

Yup. She just doesn’t want to pay them more.

hgsgm 3y ago

You have no reason to believe that charging 4% more would have the same level of sales. Some people tip a lot. Others tip 0.

thx-2718 3y ago
Raising prices isn't the only way to raise revenue. Especially if it's a product that consumers are very price consciousness of (though I suspect a bespoke flower/pottery shop isn't one). She can lower prices through sales to increase revenue needed to pay her employees more and grow her business. She has options that are alternative to frustrating or bothering her customers to subsidize her wages.

somethoughts 3y ago

I agree it for sure sucks - its kind of like hidden fees at hotels. I think from a game theory perspective it makes rational economic sense in that if all of your competitors are going the tipping route and you don't, then you will appear to be 20% more expensive than the competition to people who are walking by on the street. A nice way to handle this would be to heavily advertise that gratuity is included on the menu and spell out per item what the pre-charged gratuity is. In order words instead of just showing the price+gratuity on the menu: Hot Dog - $12 show the breakdown: Hot Dog - $10 + $2 Gratuity