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America’s Tipping Fatigue: Truth or Myth?

Business

Server picking up a cash tip at a coffee shop. | Image by Sean Locke Photography, Shutterstock

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Leaving a gratuity has long been part of American culture, particularly at an establishment like a restaurant where employees rely on the generosity of others for their income. However, tipping has gone to a new level in the wake of the pandemic, spilling over from sit-down meals to just about anywhere goods and services are sold.

Now signs suggest that consumers may be growing weary of adding on to the bill. Of course, tipping is subjective, and not everybody is complaining.

When dining out at a restaurant, the standard tip amount is 20% of the bill — as long as the service is exceptional. If the service is less than ideal, it is customary for the patron to adjust the percentage accordingly. U.S. consumers don’t seem to have a problem with that. However, what appears to be causing some pushback is an expectation among businesses for customers to tip when making a standard purchase, such as a cup of coffee or a snack that they take on the go.

Uptip Founder and CEO Eric Plan told CNBC, “Part of it is tip fatigue.”

Gratuities became more complex as a result of the pandemic when consumers started tipping for services they usually would not, such as ride-share services and curbside deliveries for take-out. Lockdowns and social distancing restrictions made service providers into unlikely heroes overnight.

Suddenly electronic payments were the preferred method for everybody in the middle of the health crisis, where tipping prompts became standard alongside the check-out experience. While this courtesy went a long way for workers during the pandemic, it may have consumers feeling a bit jilted now that the dust has settled.

Record-high inflation that has gripped the economy has thrown a wrench into the tipping culture, considering consumers must dig deeper into their pockets to pay for rent, groceries, automobiles, fuel, airline tickets, and more this year vs. 2021. Early in the pandemic, as of April 2020, tips were up 23.5%, according to Square data cited by The New York Times. As of March 2022, that rate had fallen to less than 20%.

One small business owner of a bakery and café in Washington State told CNBC how they have experienced a drop in tipping since prices went up. This business has integrated digital payments at the register, where customers are automatically prompted to tip anywhere from 15-25%. While it’s not mandated, it has created confusion around what’s socially acceptable for everyday purchases. At the café, approximately 20% of customers decide to tip.

A recent study by payroll fintech Toast suggests that the so-called tipping fatigue may be a myth. According to Toast’s findings, consumers have been digging into their pockets to tip even amid sky-high inflation. As prices have risen, “the average same-store tip amount” has climbed close to 10% vs. year-ago levels, according to the report.

Toast further breaks down the data between in-person and take-out diners. As of the second quarter of 2022, in-person diners tipped 19.7% on average compared with 14.5% for delivery or take-out customers. The findings continued a trend that played out in Q1 too.

Meanwhile, the gap between the highest and lowest tippers in the country is not too wide, with Indiana in the No. 1 spot at 21% and California at the bottom of the list at 17.5%. Texas rolled in at No. 45 with an average tip of 18.8%, according to Toast data.       

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Karen Whitehead
Karen Whitehead
28 days ago

I notice that I am asked to tip people who take my order at a counter and do nothing but take my order and my money.

WezelleDallas
WezelleDallas
Reply to  Karen Whitehead
28 days ago

You are tipping the people who are making the food in the kitchen, plating it and taking your order, not just the person you are interacting with.

Barb
Barb
Reply to  WezelleDallas
28 days ago

Yet in a regular restaurant tips are not shared w kitchen staff so I’m not sure your comment is accurate.

caseyp
caseyp
Reply to  WezelleDallas
28 days ago

Tips for servers are because they are not subject to and are paid below minimum wage. Staff at restaurants where you order at the counter and their kitchen staff are paid at least minimum wage. If feel that they are not paid well enough and are unhappy they can get a job elsewhere.

caseyp
caseyp
28 days ago

Get rid of tipping and pay waitstaff at least minimum wage. In some upscale restaurants, waitstaff can make upwards of $200 to $300 for working a four hour shift. Their pay should be more than an everyday chain sit-down restaurant.

Mulletman
Mulletman
Reply to  caseyp
28 days ago

Take away tipping waitstaff and you will have more restaurant closings . If you can not afford to tip eat at home , cook your food and shop yourself . All restaurant employees remember the non tippers. Put yourself in their place and see how you like being stuffed for good service.

Dave
Dave
Reply to  Mulletman
28 days ago

So if one cant afford to tip, then they should stay at home?? How does that work for the waitstaff depending on tips of whatever amount. I would add, if a restaurant owner cannot afford to pay a livable wage, perhaps he/she should close down and also stay at home. I’ll ask again, how does that work if small/non tippers and business owners decide to stay at home, where does that leave the waitstaff. Waitstaff knew when they went into this line of work that they WORK for tips. Offering mediocre service is not a tippable situation. I tip for over the top, good service. If they only offer so so service, then their $2.13 wage is enough. If they want more, then step it up. Some waitstaff seem to want much for doing very little if anything extra. At times they seem to barely do the minimum. If I am to tip, I want exceptional service. If that is not possible, then I can stay at home which might require business closures. All I can say is you did it to yourself. Tipping has become an entitlement, a requirement, where it should be an equal and balances exchange. When I tip I am augmenting the waitstaffs salary. In essence I become their employer. In that case there are many that I would give a hefty raise to, but there are also many I would fire on the spot. Don’t kill the hand that feeds you!!

Cookie
Cookie
Reply to  Mulletman
22 days ago

I have noticed a steady increase in the number of incorrect orders I receive both on take out and dine in orders, even after repeating my order 2-3 times. I don’t mind tipping, and I tip generously, but I don’t feel I should pay high prices to eat out and then be expected to leave a tip for rude servers and incorrect orders. Tips used to be left for exceptionsl service, now some servers see it as an entitlement for poor and sloppy service. Send the food back, tried that – resulting in the server getting pissed and argumentative because the took the order wrong, reveiving cold food, me getting pissed because the service got worse not better, and everyone at the table loosing their appetite in the midst of waiting for me to get my food. I’ve chosen to eat at home more and avoid the hassle. Shame how some of the food service industry workers have ruined the dining out experience by demanding more in tips but giving poor service.

Todd
Todd
28 days ago

I get tip prompts for everything now, like fast food places and donut shops.
I’m see them looking and am afraid they’ll spit in my food if I give nothing. It’s just a big scam for corporations to justify paying employees less

Diane R
Diane R
Reply to  Todd
27 days ago

So true. Ordered a sandwich at Jimmy John’s. Didn’t tip. The same girl who took order made sandwich, tomatoes were all mostly green (and super hard), the cheese was barely tucked in the bread and parts fell out when I ate it. Never have I eaten one that looked/tasted like that and I’ve been going for many years. Jimmy needs to pay his staff more from his millions.

Chrystin
Chrystin
28 days ago

We always give cash tips, and I ignore all prompts. We tip 20-30% to service staff AND to-go staff. The people who pull orders and make sure the to-go food is right are working just as hard as wait staff for sit down diners. Bucky Moonshine’s charges a 17.5% tip on all orders. That seems fair to me. We augment the auto-tip with additional cash.

We don’t tip at typical Burger joints–those staff are making $12-17 an hour.

I don’t think this is post-pandemic behavior, as tip jars were at LOTS of places prior to 2020.

H E
H E
25 days ago

Being expected to leave a tip for TO-GO orders is just plain WRONG. And it is wrong for businesses to present tip request screens to customers in these situations.

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