Imagine the customer thinking you are such an idiot they need to spell out their 3-4 letter name to ensure it gets on the cup correctly. Sometimes you can sense the slight anxiety in their voice which probably explains why; they once went to a Starbucks and someone got their simple (perhaps shortened) name wrong. It is for clarity, so I don't mind it.

Funny enough, customers with longer names, especially those more complicated, never spell it out without being asked.
I have noticed on occasions I have abandoned the name spelling exercise for the most difficult names only for the person to attempt to spell it out once I have already pressed Pay to advance past. Too late... if it is always an issue in day-to-day life, perhaps spell it out quicker.