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Which drives you crazier? ‘Tipflation’ or tip creeping?
Tipping fatigue has been trending as a topic in the media and has sparked angry debates on social media for nearly a year. The arguments now appear to center on two different phenomena: “tipflation” and tip creeping.
Tipflation refers to the rising expectations regarding acceptable tipping percentages. Pre-pandemic, traditional tipping etiquette called for customers to give their servers at sit-down restaurants an extra 15 to 20 percent, before tax. Consumers tipped big-heartedly during the pandemic to support restaurants hit hard hit by the pandemic’s restrictions.
Another reason for tip inflation is the use of point-of-sale machines from Toast, Square, Clover and others that automatically prompt tipping. Many of the touchscreen tablets offer tip options in the range of 15, 20 or 25 percent of the post-tax bill, but some start with a default option of 25 percent.
A third factor driving tip inflation is the 8.3 increase in restaurant prices last year. Surveys from CreditCards.com and Popmenu indicate consumers are becoming less generous tippers than earlier in the pandemic, attributing the change to inflationary pressures.
Tip creeping, on the other hand, refers to the increasing array of services that now expect a tip from customers. It’s become more common to be met with a tip request not only at coffee shops and other fast-food places, but also at the farmer’s market, the auto shop, retail outlets and elsewhere.
Many consumers feel pushed or guilted into tipping by the automatic tip requests from POS devices.
“Suddenly, these screens are at every establishment we encounter,” etiquette expert Thomas Farley told The Associated Press. “They’re popping up online as well for online orders. And I fear that there is no end.”
Some argue that tipping only supports lower-wage workers, but others feel occupations that earn the regular minimum wage or above, such as baristas, should not expect tips. Cornell University professor Michael Lynn, who studies consumer behavior, told CBS News, “I feel obligated to tip waiters, but anybody else I don’t feel obligated, but often I do tip if they’ve gone above and beyond.”
- Americans are worse tippers now than before COVID-19 hit – Creditcard.com
- Fewer U.S. Consumers Are Tipping Restaurant Staff 20 percent or Higher, but Majority Expect to Boost Gratuities Over the Holidays – PopMenu/GlobeNewswire
- ‘It makes you feel bad’: People are getting sick of being asked for tips everywhere they go – The Associated Press/USA Today
- How “tipflation” and “tip creep” are sparking a backlash: “I don’t feel obligated” to tip – CBS News
- Tipping Is Weird Now – The Atlantic
- The pandemic began a trend of generous tipping. Is San Antonio suffering from gratuity fatigue? – San Antonio Express
- A tip too far? Why tip fatigue may be setting in for North Americans – The Conversation
- ‘Out of control’: No one knows how much to tip – CNN
Discussion Questions
DISCUSSION QUESTIONS: Do you see tipflation or tip creeping as the bigger driver of tipping fatigue? What solutions do you see?
Poll
Loading …BrainTrust
Jenn McMillen
Chief Accelerant at Incendio & Forbes Contributing Writer
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
There is one way to stop tip creeping and that’s simply not to tip where it is unreasonable to do so. At restaurants and in some other industries it is traditional and logical because you are being served by someone who is, hopefully, helping to make your experience better. In a retail store where you help yourself to the goods — it’s absurd. Of course, people are always free to tip for exceptional service regardless of the industry.
I now see some restaurants adding a service fee for paying with credit cards apart from the tip.
Interesting. I see more restaurants not taking cash.
We don’t have to do what some think should be done just because they do it. We should tip as we think is appropriate and to those whom we think deserve it. Herd mentality has seldom followed the right path.
Tip creeping. Everyone should book a holiday to Europe — experience “tip reality” and come back and shed the guilt of not tipping in all the largely self-serve, or at best counter-served, establishments.
In China if you try to tip someone, the tip is refused. Some get insulted.
Both drive me crazy, but I don’t find it hard to say no to either (and I have a kid and friends’ kids in food service, so I’m sensitive to this). Tips are not automatic, they’re earned, and if an establishment isn’t making that clear to employees, shame on them.
I left my teller job for the flexibility and tips of waiting and bartending. It was not easy work especially getting my start working graveyard in a coffee shop but I paid for undergrad that way. Tips were my lifeline and I worked hard to earn them with great, friendly service. For me, both drive me crazy but tip creeping is the worst because its often an expectation and often before the service is even rendered, like at the cash register. There’s no easy solution but the market is already forcing the issue; hopefully business owners will figure it out and remove tip jars from establishments that never had them or should never have them. In the meantime, if you’re asking for or expecting a tip, work for it.
Tipflation is the bigger issue. Tip creeping is easy to ignore, tipflation, not so much.
Not only am I seeing a starting point of 20 percent going up to 30 percent, the amount calculated is based on the total after-tax amount, which is clearly wrong. The other part of this “experience” which is missing is the connection between the service given and the customer — the core reason being that with the technology disconnecting the check from the waitstaff there is no “closure” regarding the service given and the customer. Finally, when I ask about disbursement of the tips (which I do frequently, I cannot help myself! :)) the answer is always “tips are pooled” and in some cases not only are they pooled but the establishment (allegedly) skims off the top. THIS practice came to light because recently in New York our table experienced the waitstaff asking us if we could please tip in cash — in order to avoid the skim!
During the pandemic I generously tipped at all food and beverage establishments thinking that I was — in some small way — helping the associates who showed up in a time of uncertainty. Since then my tipping has trended back to normal, but I see the tipflation and creep all around me. Certain coffee chains have moved to a POS system that forces you to select a dollar tip amount (or zero) before tapping your card. And this in the drive-thru lane. I’ve been to other establishments where the tip amount starts at 30 percent and goes to 40 percent! That’s absurd and enrages me. The bottom line is this — if someone performs above and beyond, regardless of situation, I’m likely to tip. Over the last year, I’ve generously tipped a tow truck driver because the guy did an amazing job and clearly went out of his way to help me in a time of need.
Tip creeping is a bit too much. I support restaurant and fast food tipping, but retail stores and other service-oriented retailers need to pay a living wage. A phenomenon I totally support is a back-of-house appreciation fee I’ve seen recently. This compensates those that make the food and clean up. It is my understanding that tip sharing that has occurred in the past is no longer legal, so this charge to me is understandable and welcomed. As for tipflation, I think that it’s most offensive when it’s built into the POS system and it puts you on the spot. Starting at 18 percent was bad enough, going to 25 percent borders on crazy, but not having a “no tip” option is the worst. There really should be a tipping app that’s separate from the POS system. That would give customers an option vs. putting cash in the old “college fund” jar.
Personally, I think it’s tip creeping. And it may be hurting organizations in ways they don’t expect. They should test the impact of automated tipping prompts on overall sales. If you adjust the auto prompts down, or remove them, what happens? What happens to sales from loyalty program members, and do they tip differently than non loyalty program members?
I referenced this phenomenon a few years back in this forum and I kind of felt like a jerk for mentioning it. But the default systems that start at 18 percent to 20 percent for someone taking an order or ringing up a drink is maddening. Paying $4 for a cup of coffee that then becomes $5+ with the tip expectation just makes me not want to go at all. I don’t see this waning but it is good to see that others have fatigue related to this.
As a former waitress I’m highly attuned to tip etiquette, but when my med spa asks for tips it’s gone a little too far. Remember when the discussion used to be about whether or not you tip when you pick up a to-go order? Ah, the olden days.
The ones that drive me crazy are the tips expected before the service. As an example, having to tip ahead when I order online for car-side pickup at a restaurant. There is a little bit of a fear factor that if I do not tip there will be no incentive to bring the meal to my car with any sense of urgency. I would almost rather that they put a 15 percent fee on the order that is split between the entire team. If I feel like giving the person that actually interacts with me a little extra I can at that time.
I vote for tipflation. While I like how the machines simplify the checkout, it is particularly annoying as the server watches as you choose your tip amount. I don’t know if it is my imagination, but that seems to happen more where the tip is not earned.
Personally, I was quite generous with all tipping during the pandemic because I just appreciated those folks coming to work in a challenging environment. Post-pandemic, I am now back to normal.
Of the two I see tip creeping as the larger factor. Tipping used to be something you did in restaurants or bars or for someone that provided you a personal service such as a haircut. Now it is headed towards being something that occurs between every customer and someone they interact with during any purchase. What’s next, tipping the cashier in a supermarket? Like Mark, when I tip it is always in cash.
I now tip more and more often than I used to. And for some reason I feel bad about not tipping enough. That credit card machine has become a needy little gizmo. I think I’ll just try to be fair. It’s not worth getting worked up over it all.
For me it’s tipflation. Like many of us I worked in the bar and restaurant business when I was younger and actually worked pretty hard for my tips. The idea of having to opt out of paying an additional 25 percent pretax for mediocre service is just crazy. I used to live on tips, so I know how important they are and I almost always overtip as a result. But that should be my choice, not an entitlement or expectation regardless of the service level provided. The solution is simple: just don’t tip or tip what you think is a reasonable amount. And remember, there are lots of places out there that require tip pooling and/or giving “the house” a cut of the tips, so you aren’t always rewarding the person who served you as much as you think you are.
I try to always tip in cash for these reasons, Ryan.
I have never understood — and have ignored — tipping in self-serve or counter-served establishments. That is better than making me annoyed.
There appears to be a move to shift more service industry employee compensation from the establishment to the consumer. New service fees, tip inflation, and tip creep are clear indicators. The consumer continues to get tapped for more while receiving the same value. This is not a sustainable trend.
They are both problematic, and likely to experience backlashes. Generally I err on the side of over tipping given my experiences in service businesses and general good nature for others in it, but I don’t like being “bullied.”
The other day I picked up a Snickers bar and went over to the self-service checkout. On one of the final screens, I was asked I wanted to leave a tip. That’s when I thought, “Tipflation. .. It’s gone too far!”
In the end, it’s up to the consumer to leave the tip — or not. It’s up to the business to decide if they want to ask for the tip. Just realize that asking for the tip can become offensive to some customers.
The sales persons don’t get paid unless they make the sale. The tip should only be given when they are earned. The definition of earned is up to the consumer.
I have doubled my standard delivery tip since Covid. I’m cool with that. I’m not cool with every POS system in America asking for a tip. It used to be a that a smile and thank you were good enough for the average checkout but not today. Now, it’s hard to get out of nearly any store or shop without being asked for a tip. Tip creeping is off-putting, especially when it’s the same service being offered. My real concern is that overall tip fatigue is likely squeezing those who don’t make regular wages. That’s not cool.
“…But often I do tip if they’ve gone above and beyond…” Imagine that!
I see no reason to rank these, both are offensive. Or are they? If we assume these are both a response to stagnant compensation, then the public is receiving a payback for years of tacit approval given to the low price/low wage model that has come to dominate retailing. (Of course that doesn’t mean there aren’t also people putting their hand out simply because they can.)
Tip creep has definitely worked it’s way into places for pick up of to-go orders, with suggestions of 20%-25%-30%, even in shops with no seating. It ultimately devalues the long standing tradition of paying servers for what was to be going above and beyond.
A local ice cream shop has recently changed policy, that they will no longer accept tipping on the POS system as tipping has been built into the price of ice cream. Takes away any anxiety at checkout and in doing business with that shop.