Coffee shop thoughts

This is not a picture of coffee *or* tea, but the closest I had to the topic at hand.

Random thought on the economics of coffee shops:

When I am doing work in a shop, I typically won’t be buying food, but am aware that I am not the most lucrative customer they will get, so I try to tip well.  This leads to an odd situation at my most-frequented place: I can get a pot of tea for under $4 with a cash discount, and so will typically get a pot of tea with a $5 bill, and leave the change as tip.

However, sometimes the barista will forget the discount, and here’s the problem: do I point out this mistake?  I’ll still be leaving a (noticeably smaller) tip, and so no matter what, I am spending $5.  In some sense, I am helping out the barista by pointing out the mistake, but then: is it really worth it to either of us to have this conversation over $0.50?  The conversation has been surprisingly confusing in the past, especially when I take the extra money I just made a point of getting back and leave it in the jar anyways.

Also, I would assume that most shops price their coffee based on what (they expect) will maximize profits. I imagine the pricing would be different if the goal would be to maximize tips (I’ll leave $1.50 on a $2.50 coffee, but $0.60 on a $2.40 coffee).  Likely the answer would be different again if the goal was to maximize profit+tips, but the tea is cool enough to drink now.

This entry was posted in General.

4 comments on “Coffee shop thoughts

  1. Whether the barista applies the discount affects the distribution of your $5 between the cash register and the tip jar, and I think $.50 isn’t too small an amount to get it right. After a few confusing conversations the barista should remember you well enough to be aware of the pattern.

  2. Bridget says:

    I would think of it more as a perk for the barista if they apply the discount and get the extra $0.50 and not worry about the smaller tip they receive when they forget.

    If you were a more lucrative customer paying with cash, you would definitely want to always make sure you got the $0.50 discount because these things add up. So if the barista is doing his/her job correctly, they will always remember to give it out. Furthermore, I wouldn’t think of it as being a discount as opposed to the fact that so many people use their cards, the prices are probably inflated slightly to account for the credit card fees. Hence, the $0.50 is added or subtracted in order to account for the extra transaction costs. If the barista does not give you the cash discount then, they are kind of overcharging you.

    So you could consider the extra $0.50 going directly to the barista when they apply the discount as a reward for when they do their job correctly — which is precisely what a tip is supposed to be anyway.

    • Right, but then I look like the jerk when I undertip. Though it isn’t like people- especially me- go to coffee shops to try to impress people.
      -posted from my MacBook, next to a pile of research papers, at a coffee shop.

  3. The source of this ambiguity is the student discount.
    Hence, the only solution is to graduate.

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