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Starbucks implements new tipping system

Yahoo Finance Live anchors discuss Starbucks's new tipping system and customer backlash.

Video transcript

JULIE HYMAN: Starbucks is facing some angry customers over its new tipping system. It includes an added tipping feature when paying through debit or credit cards. A lot of places do this now, but I guess Starbucks did not until now, and this was explicitly, reportedly, something that unions had pushed for. They wanted this tipping option. But Starbucks users not all happy about it.

BRIAN SOZZI: Yeah, especially those rolling through the drive-thru, just according to some of the threads I have seen out there. I mean, if someone is just going to hand you a drink, should you tip them?

BRAD SMITH: That's a great question, Brian. I think it's a-- I think it's a larger question, though, of how much in the tipflation right now that we've seen for the experiences that you go into where, pre-pandemic, you wouldn't have normally tipped, you continue to feel comfortable saying, yeah, I'm going to add on whatever that--

BRIAN SOZZI: But you already spent $9 on a caramel brulee latte with three shots in it. And now what? You're going to tip an extra dollar, and now it's a $10 drink?

JULIE HYMAN: Well, and Starbucks, right, has been raising its pay for workers, right? Aren't they topping out-- they're going to be topping out at-- not topping out, but $17 an hour. What, is that the average pay for workers? So I think a lot of consumers ask the question, like, raise the wages instead of--

[BUZZER]

--putting the onus on the customer.

BRIAN SOZZI: Good point, indeed.