Simon Haslam
Personally, I like to round up the bill and leave a tip of around 10 per cent when I go to restaurants, in cash, regardless of whether my Echo rate of pay is actually higher than that of the person who serves me. But I find it quite awkward to do this when paying by card, wondering whether that money is really going to the person who served us (great), or spread around the staff (fine) or just going straight to the restaurant owner (bad).
Apparently, most Australians think our waiting staff are paid so much (the minimum rate is around $22 p/h and it’s set to rise by 5.75 per cent next week) that, unlike in the US, it’s a point of pride that we don’t need to tip. It turns out I’m not alone, also, in wondering whether tips paid through online platforms are just subsidising the restaurant owner, or obviating the need to pay staff properly.
According to Troy Green of the Australian Food Service Advocacy Body, ‘tipping culture does appear to be changing’, with an uptick in venues encouraging tipping, especially through online platforms, raising the question whether businesses are just passing on a cost to customers. Whether people are actually tipping more, given cost-of-living pressures, is another matter.
The credit crunch caused by rising interest rates and costs of living has seen annual spending on credit cards rise 20 per cent higher than at the same time last year. Having experienced the difficulty of repaying a credit card debt (on average the interest rate is around 17 per cent, according to RateCity) I prefer to pay in cash.
The other benefit of paying in cash is that credit card surcharge fees are increasingly being charged as businesses seek to defray costs; payment provider, Tyro, says that in May this year 40 per cent of cafes and restaurants levied surcharges, compared to 25 per cent in May 2022. Using a credit card for every transaction costs 1–1.5 per cent, a cost that quicky adds up. Debit cards cost less, premium credit cards cost more. There is no legal obligation for a business to accept payment in cash.
As the RBA points out in the March 2023 bulletin on the cash use cycle in Australia, cash use is declining and that’s a self-reinforcing cycle, with the number of ATMs offering ‘cash out’ declining, bank branches closing, and therefore businesses finding it harder to source the change that may be required.
But as people carry less cash, they increasingly rely on the internet, and the big four banks to support them with proprietory tech solutions. The total system outage during the floods, and this week’s Commonwealth Bank system failure shows that ‘operational resilience’, the ability of the payment system and its service providers to deliver critical operations during a disaster or tech event, is an issue for restaurants and other merchants as they transition to a ‘cashless’ system.
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