New York City techie Ryder Kessler came up with the idea for DipJar in 2008, after he noticed baristas going tipless even during extremely busy hours. After years of research and development, Ryder and his brother and co-founder, Judd Kessler, released the first functional DipJars this summer at a few coffee shops around New York City.
"Everyone was paying with credit or debit, so the tips had plummeted," Ryder told the New York Post. "Baristas take really great care of me, and I didn't like that they were working just as hard and making less money."
Here's how DipJar works:
A store or restaurant places the DipJar on the counter, just like a regular tip jar. A customer can then dip his or her credit or debit card into the slot, and for each dip it deposits an amount set by the establishment into the jar. The device displays the tip amount and emits a friendly chime to let you know that the Dip went through. The machine keeps track of who's behind the counter on a given shift and divvys up the tips accordingly.
For this test run, Kessler told USA Today, DipJar isn't taking anything out of employees' tips and is covering the cost of credit-card fees. But eventually, the service will start taking a cut of the tips as a processing fee, with employees receiving at least 80 cents per dollar. In the future, Kessler hopes to have enough bargaining power to lower the credit card fees, and let employees keep 90% of the tips.
DipJar also addressed employee fears that people will tip less with an electronic tip jar. "Our research suggests that people who pay with cash tip with cash, while people who pay with plastic don't tip at all," according to the website's FAQ page. "We want to capture all the tips those people would be leaving if there were an easy way to tip electronically."
While DipJar only accepts credit and debit cards now, the Kesslers are working to equip the product to accept all forms of electronic payment. If the devices take off, a cashless wallet will no longer be an excuse for not leaving a tip.