Could digital tipping make you more generous?

Michelle Miller reports on how the technology is putting more money in workers' pockets
Michelle Miller reports on how the technology... 03:10

Starbucks customers will see something new on Wednesday, but it's not on the menu. Customers already have use of an app to pay for coffee and snacks, but now there will be a digital tipping option. The technology gives the customers two hours to add gratuity to their purchases, putting more money in workers' pockets.

Many other businesses are turning to Square Wallet as well, which is a streamlined alternative to traditional credit card readers, created by Twitter founder Jack Dorsey.

Several of the company's more than 4 million customers are small business owners, like Jeremy Lyman. He co-founded Birch Coffee in New York City, which started using the technology about a year ago.

"With Square we basically swipe their card, we flip it around and then they close out the entire transaction," he said.

Customers are then given a screen asking them how much they'd like to tip.

"You have the option," said Lyman. "You can do one, two or three [dollars]. You can do a custom amount."

You can also select "no tip," but almost nobody wants to seem like a cheapskate and Lyman said tipping with technology has skyrocketed.

"When people would come in and have to actually physically enter a tip amount and sign a receipt we'd be taking in $100 per day, just on credit cards," he said. "The day we started using Square it went up 100 percent."

CBS News' Michelle Miller spoke to several small business owners who found the same drastic increase. Experts on consumer behavior cite a combination of factors. For one thing, the preset options eliminate the mental work.

"There is a lot of research on defaults," said Columbia Business School's Stephan Meier. "That defaults or strong defaults or suggestions actually make people do what those defaults or suggestions suggest."

And then there's the guilt factor.

"I feel like sometimes people actually do feel bad pushing 'no tip,'" said Lyman. "The amount of care and attention that these guys put toward a cappuccino or a latte, it warrants people being tipped."

Research shows the cashless transaction makes that easier. And Starbucks chief executive officer, Howard Schultz told "CBS This Morning" that it's the way of the future.

"The consumer is going through a seismic change in which cash is, over time, going to be obsolete," said Schultz."

But as much as things are changing, tipping is still optional even if it doesn't always feel like it.

"It just makes it easier to leave money ... when they don't feel like they're leaving money," said Lyman.

To see Michelle Miller's full report, watch the video in the player above