How do I know my gratuity is reaching the right beneficiaries?
The phone or account numbers of the group of workers involved in producing the work order for your garment at the supplier factory anywhere in the world is assigned a unique QR code. These codes are printed on tip4good tags attached to all garments produced on that line. Upon purchase, the user scans that QR code with his mobile phone and effects gratuity payment. This transfer the gratuity to the account associated with the QR code. Users are notified when their gratuity is paid out. Only workers whose digital account/phone numbers appear on the original work order list associated to the QR will receive their pro-rata share of the gratuity accumulated in the respective account.
How is tip4good sustainable?
We encourage repeated generosity by offering the option of becoming tip4good members by registering and downloading our mobile app. This allows members to enroll in our rewards program and earn points based on their frequency and amounts of gratuity payments, no matter which participating brand the garment was produced for. Points can be exchanged for a range of exciting rewards and confer status which can be displayed on the member’s social media.
Why don’t the fashion brands just pay the factory workers more?
The question answers itself. Brands don’t pay the factory workers more because brands don’t pay the factory workers. The brands pay the supplier (or a broker or a supplier outsources production to another supplier, etc.) and the supplier/factory must compete with other suppliers all over the world in order to win the brands’ business. This means it must produce the quality of garment the brand supplies at the lowest price per unit possible. The supplier pays the factory workers. So the supplier will have to pay the workers enough to comply with the country’s minimum wages and provide incentive for the worker to remain working, while at the same time ensuring their unit costs remain low enough to maintain their business with the brands.
How do you ensure each factory worker receives enough share of the gratuity in each disbursement?
Gratuities are accumulated at a clearinghouse based on their respective QR code. That QR code account contains pertinent information such as the wage level, number of workers attached to the account, other costs, as well as the disbursement threshold (i.e. 10% of monthly wages per person). Using a smart contract, the account disburses automatically once payment conditions are met and reaches the account numbers of the workers associated with that QR through digital wallets on their mobile phones or other applicable fully digital means.
Will you provide traceability to the factory that produced the garment?
That will depend on the respective brand. We do not need to have factory traceability in order for tip4good to function. Brands may provide it to us if they choose to and they may allow us to provide it to our users. We certainly encourage transparency in the production chain, but it is not our mission and it is not required for us to function or account for our remit of activities.
What is the difference between you and FairTrade?
tip4good is completely optional. It is only paid if the consumer wishes to pay it. For example, if there are two identical competing garments from different brands and one has tip4good and the other does not, their prices do not change. tip4good is not factored into the price of the item. FairTrade involves paying a premium. Normally that premium is paid by the customer in the form of a higher price (or someone else down in the value chain voluntarily reducing their margin) for a product marketed as a FairTrade item.
Why can’t we just force the stakeholders to pay higher wages, or find a fix for the problem like we could for other working conditions like harassment, fire safety, child labor, minimum wage enforcement, unionization of labor, forced overtime, etc.?
There’s a big difference between most of the problems associated with garment production and wages. Fire extinguishers and building safety are objects. These can be solved by spending money on them. Harassment, child labor, minimum wage compliance, and payment of adequate overtime, and labor organization come down to creation and enforcement of legislation. Governments need to be lobbied to accomplish this, which can be done by investing in oversight ad enforcement. The garment factory wage is nothing but the price of unskilled labor. It is set by the demand and supply for this labor in any given national market. Governments should be lobbied to set minimum wages at the “Living Wage” level. But, unlike fire extinguishers, real wages at factories cannot be manipulated. They are a price set on a globally competitive with billions of unskilled workers. Forcing payment of higher wages means higher costs for the supplier and less margin for the brand. Brands answer to a huge competitive fashion market—as well as their shareholders, who logically value profitability. If governments set the minimum wage too high, there is no way to stop brands and suppliers from moving to other jurisdictions with laxer standards.
Why would a fashion brand want to do this?
We believe the time has come for brands to allow customers to take matters into their own hands. Those customers who are concerned for the plight of the workers will choose to participate by thanking them with gratuities. Those who don’t care won’t participate and won’t be affected by anything more than having to remove an additional tag from the garment they purchased. We give brands a turnkey Corporate Social Responsibility (CSR) program that they need not build out or administer. It permits them to allow their customers to play a direct, positive role in transferring some of the surplus value conferred in the form of competitive prices back to the workers who need the value most. Direct income transfers via digital payments platforms can change the future of humanity Fashion brands will benefit tremendously from enhanced brand equity by providing their customers with yet another alternative to do good in the world by purchasing their merchandise.
How would this impact the market?
tip4good should improve the image of all the fashion brands that choose to participate. Sustainability and ethical sourcing are issues that are increasingly near and dear to the hearts of Millenials and other important consumer segments. Brands that espouse such values by permitting their customers to thank the factory workers by paying gratuities show their commitment to sustainability. Moreover, customers that care will be very happy to have this option. This should increase the brand’s market share without sacrificing any profitability.