Despite reports of tipping fatigue among consumers, new data indicates that people are actually tipping more at restaurants.
Square, the company behind many of the iPad point-of-sale machines you might see at a local restaurant or coffee shop, found total tips received in the fourth quarter climbed 16.5% year-over-year at full-service restaurants and 15.9% at quick-service restaurants.
The hike comes in spite of high inflation and surveys indicating that consumers are feeling stretched thin thanks to an abundance of iPads asking for tips across all types of businesses.
With digital payment methods automatically prompting customers to tip, many feel pressured into tipping, said Nathan Warren, assistant professor of marketing at BI Norwegian Business School.
It’s not tipping at restaurants, where tips are expected, that some Americans are upset about but tipping requests at places where they normally wouldn’t leave a gratuity, Warren said.
“You never know when you’re going to be asked for a tip request,” Warren said.
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What is tipping fatigue?
Complaints about iPads asking for gratuity at a variety of businesses can be found all over social media, with some saying it has led to “tipping fatigue.”
Nearly one-in-five Americans are tipping a wider range of services, and about half say they have tipped when they normally wouldn’t because an iPad asked them to, according to a September survey of more than 1,000 people in the U.S. by PlayUSA, a website that covers the gambling industry.
More businesses may be asking customers to tip as their operating model shifts, according to Matthew O’Connor, head of verticals and platform at Square. For example: A coffee shop may start asking customers for tips after it begins offering a breakfast menu.
“Businesses are wearing multiple hats, with tips reflecting the additional labor that is going into their services,” O’Connor said in an emailed statement.
Are we seeing ‘tipping fatigue’?
Despite surveys showing that consumers are feeling overwhelmed by tipping requests, data from restaurant management software company Toast shows diners are still tipping between 15% and 20%.
Average tips for full-service restaurants remained unchanged between the second and third quarters at 19.6%, while quick-service restaurants saw the average tipping percentage dip slightly from 16.9% to 16.8%, according to Toast.
“Our tip percentage on credit card transactions is holding pretty steady,” said Drew Weintraub, vice president of restaurants for Eleven Hospitality Group, which operates restaurants in Las Vegas, Atlanta and Salt Lake City. “There has not been a huge dip in any of our locations.”
Miguel Hernandez, chief operating officer of Rreal Tacos in Atlanta, said his staff has been able to make more tips since they started using handheld tablets to run credit cards in August 2021.
He said servers went from making $50 to $80 in tips per shift to $200 to $300 with the tablet.
“They’re able to turn tables faster,” he said. “You’re able to make sure that these servers, in that short time span of a shift, they can they can make 20% to 30% more money.”
Calvin Roose, general manager of Smokey Row Coffee Co. – which operates coffee shops in Iowa – says tips vary greatly between locations but have remained steady. The company also saw a boost in sales once it updated its point-of-sale technology around 2017.
Roose said baristas typically make an additional $2 to $7 per hour in tips.
“Tips for our baristas are a big part of their take-home pay,” he said. “In general, our tipping has stayed fairly consistent.”
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Are people tipping less?
While data from Square and Toast indicate that tipping has remained strong at restaurants, other surveys indicate that people are tipping less overall.
PlayUSA’s survey found 17% of Americans are tipping less due to inflation, and a November survey from restaurant tech company Popmenu found 43% of consumers tipped servers 20% or more in 2022, down from 56% the year prior.
Lizzie Post, co-author of the book “Emily Post’s Etiquette, The Centennial Edition,” attributes tipping fatigue to a combination of pandemic-induced stress, inflation and the growing popularity of screens that ask for tips.
“People are seeing it at every interaction,” she said. “So it’s not like just when you go in for food or the service industry, you’re seeing it in retail experiences, which was totally unexpected, and people weren’t feeling good about it.”
Restaurants moving away from tipping
It’s not just customers who are getting sick of tipping culture. It’s also restaurant owners.
Joey Ward, chef and owner of Southern Belle and Georgia Boy in Atlanta, shifted to a service-inclusive model in July. The bill for each guest now comes with a 25% charge that is divided among staff and helps cover paid vacation time.
“(We wanted to) provide a better quality of life for our staff,” Ward said. “Why not just (have customers) pay a price and have it cover the business’s costs instead of hoping that we did a good enough job for you to think that we deserve to eat or pay our rent?”
Ward noted that he was nervous ahead of making the shift, but says his customers have “overwhelmingly accepted it and celebrated it.”
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What is the general rule for tipping?
We don’t tip all people the same way, Post said.
Tipping 15% to 20% at a restaurant, for instance, is expected, while leaving a gratuity in a coffeehouse’s tip jar is discretionary.
“It’s up to you whether you leave” a gratuity in a tip jar, Post said. “The workers at these establishments are usually paid in a different way from restaurant workers, which is why this is a little bit different.”
Tipping screens are no different from tip jars. The only difference is that consumers have to hit “no tip” on the screen if they’re not leaving a gratuity, Post said.
When an establishment has a tip jar or screen, consider the circumstances around your order such as its complexity and whether the establishment is busy or not.
“For tip jar situations, we typically say that up to 10% is what we’re seeing most people doing in America and feeling good about doing,” said Post, co-president of the Emily Post Institute. “You can always leave more and you don’t have to leave anything in these situations.”
What services should you tip for?
In “Emily Post’s Etiquette,” Post and co-author Daniel Post Senning recommend tipping on food and beverages, including alcohol, as well as rideshares like Uber and Lyft.
You don’t have to choose a suggested tip percentage on the screen, especially if the amounts are inflated, Post said. And don’t feel embarrassed if you decide not to tip in certain situations.
“When it comes to that discretionary tip, that tip jar type moment, even if it’s a screen in front of you, it’s okay for you to make the decision,” Post said. “It’s nobody’s business, (including) the people behind you, what it is that you’re tipping.”
Here’s advice on how to tip in some everyday situations, according to “Emily Post’s Etiquette”:
- Tip jars: Tipping is entirely up to you. You can leave change from your order or a dollar or more, depending on your order.
- Personal services: You usually add a 15% to 20% tip when you pay for services in businesses like salons or spas.
- Dining out: You’re expected to tip no less than 15%. “If you don’t have the money to tip at a restaurant, you can’t go out to eat that night,” Post said.
“No matter what, when you’re making the decision of whether to tip or how much to tip, it is incredibly important to keep the gratitude in your gratuity,” Post said. “Look the person in the eye if you’re able to make eye contact, and be sure to say please and thank you and wish them a good day..”
Story Credit: usatoday.com