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Do Foodservice and Delivery Businesses Need to Ditch Tipping?
Americans are growing weary of being asked for tips at every turn. That’s the conclusion of two new and separate studies on the subject.
Sixty-six percent of Americans say they “always” tip wait staff at sit-down restaurants, down from 73 percent last year, 75 percent in 2021 and 79 percent before the novel coronavirus pandemic, according to Bankrate. Five percent of diners never tip and 12 percent only do it sometimes.
The survey of 2,437 adults commissioned by YouGov found that food delivery workers also see a smaller percentage of customers giving tips. Fifty-nine percent always tipped drivers in 2021. That has dropped to 50 percent today. Seven percent said they never tip drivers and 18 percent only do it sometimes.
Only 32 percent of those surveyed always (13 percent) or most of the time (19 percent) give a tip when picking up takeout orders. Thirty-five percent of Americans never tip when picking up takeout and 32 percent only sometimes give a tip.
Thirty percent of those surveyed said that the U.S. tipping culture has gotten out of control and 32 percent expressed annoyance at seeing tip prompt screens when paying for an order. Eighteen percent said they tip less when seeing prompts. Nine percent tip more.
Forty-one percent believe that employers should pay their staff more rather than have them depend on tips. Of course, only 16 percent said they would pay more for their orders if businesses got rid of tips.
A survey of 780 U.S. adults by Capterra found that most are unhappy when point-of-sale devices prompt them to tip the staff.
Fifty-three report having come across a tip screen at a business that didn’t previously ask for tips. Twenty-one percent have encountered tip screens at a retailer and 10 percent have been asked to add tips at a convenience store or gas station.
Half of those surveyed said they felt manipulated into giving a tip and 75 percent do not know where their tips are going.
Discussion Questions
DISCUSSION QUESTIONS: Will tipping fatigue get to the point where foodservice and delivery drivers must look for work in other businesses? Do companies need to develop a compensation model other than tips?
Poll
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I was in Italy recently and noticed how dramatically different it still is when it comes to the culture of tipping. The service for the most part was excellent and yes, many restaurants do include a service fee of around 4 Euros, but they do not expect a tip on top of that. We are so accustomed to tipping more that I felt bad if I did not tip on top of the service fee for excellent service, because we have been so conditioned to do so.
Even at coffee bars where a two cappuccinos, and two croissants, which were truly excellent cost around 3 or 4 Euros with no tip jar in site and warm and welcome service was provided happily. Just saying.
Tipping in China is more than not necessary, it is insulting. I learned that the hard way.
Service in Japan is genuine and high-caliber, and no tipping there either. Restaurant prices in Tokyo this spring were not nearly as costly as expected – on par with San Francisco or even Chicago. The American way is not the only way, nor is it the best way.
Customers drive retail and foodservice direction through wallet spend. Even though tipping fatigue is a very real thing, there are enough consumers willing to tip some of these undervalued workers in society that I don’t see it going away in the near future. However, there are some things that should be more broadly utilized. Foodservice establishments should clearly indicate how much of the tip is going to the staff as opposed to their own pockets. And customers should have a button option for 0% without being only given 10%/15%/20% and having to hunt for an “other” button. Related: only 66% say they “always” tip at a sit-down restaurant??
Tipping will not go away, and in the case of foodservice delivery isn’t it (somewhat) customary to tip the pizza guy? The bigger issue here is the reduction of people actually carrying cash, which brings us to the “electronic ask” which so many of us are offended by (and so many of us have written about). Someone handing a Pizza over along with an ipad creates a much different interaction than just handing the drive a dollar or two or five.
Tipping fatigue is real, and it is legitimate. I grew up in the service industry, and that experience made me a generous and enthusiastic tipper, but even I am often taken aback at some of the places that have decided to have their POS system ask me to tip them for the “service” they provide. Clearly, service industry people are struggling to make ends meet, and we need to find a way to help. The “easy” answer is to change compensation models so that service workers are not so dependent upon tips. This is a thorny opinion, I know, despite the fact that the states that have been leading the charge on higher minimum wage legislation have seen good outcomes from the changes.
Let’s start simply, and remove the tipping option from self checkout. We can debate how to pay waiters and delivery people a living wage later.
Of course, tipping is not a common practice in Europe, so here in the Magic City, it’s often just baked into the check at restaurants.
I generally default to generous tipping in restaurants and for deliveries (groceries and meal orders) under the assumption that these workers often get stiffed. There are major flaws in the “systems” that work against these folks: being underpaid to begin with, non-tip fees that raise prices and discourage tipping, delivery and product quality snags of all sorts that are no fault of the person being tipped, pooled tipping policies, and so on. When I do the math, the difference between a 20% tip and a 30% tip (yes, I go there) is usually a few bucks max so I figure it might at least boost morale for someone. I’m much more uncomfortable with the idea of judging and expecting people to dance for tips that are a major source of their compensation than I am concerned about “overtipping.” I don’t suffer from tipping fatigue because I take each situation in context and err on the side of generosity. All of that to say that the compensation model that most need to change is just paying a fair wage and not putting employees in an untenable position.
Food service workers in full-service restaurants should be tipped as they’ve always been. Where it’s gotten ridiculous is the person who literally takes an order or microwaves a pastry now should be tipped. That expectation didn’t exist three years ago. And the payment devices that default to, say, 20% at the low end and 28% at the high end are just egregious. As we’ve discussed in other posts on this, consumers have to resist the easy ‘press a button’ for tip checkout and take the step to lower or avoid the tip – I’m just not sure consumers are that motivated to do so. In terms of companies changing their comp plans, no.
Other than taxes and death, the one thing we can all count on is the tip jar. I was never a fan of automatic tipping and tip expectations. Extra gratuity should be for exceptional service, not for work performed. That said, we owe a great debt to delivery folks who got us through the pandemic; the solution is to build in a higher delivery fee and compensate the driver.
I am reading down the list of comments and waiting for a reference to the level of service performed. Thank you, Lucille. That is really the measure.
Tipping is appropriate for servers and delivery people. I also tip at coffee places that make custom beverages, but generally not at fast food restaurants. Tipping is also in order for furniture delivery people, landscapers, painters and other service providers. The danger lies in being asked to tip when all the cashier does is ring up the sale. That’s what’s overwhelming.
Having (literally) lived on tips in college, grad school, and beyond, I have to say I have mixed feelings on this one. Without tips a good number of foodservice workers would literally not be able to afford working. On the other hand, high pressure tip suggestions sort of miss the point of the tip which is to acknowledge great service not just any service and, sadly increasingly, perfunctory service. All that said, if automatic “tipping” — and to me it isn’t really tipping if it’s automatic — then employers will have to raise wages, which will raise costs, which will upset consumers. If foodservice companies paid a living wage, this would all be a moot point.
Ryan, I bet you gave great service!
Firstly agree with most comments about “tip creep”. I’d be mostly ok tipping in more places (like take out bakery/coffee) if there was an easy way to make it a nominal amount. A prompt screen that starts at 20% and goes up, or has a non obvious way of going to “custom” or a lower amount doesn’t help (and are those people behind me in the line really glowering at me as I try to figure it out). So instead of tipping something more reasonable – the quick mode is no tip. I don’t think the annoyance is enough to make me change where I shop, but setting the prompts more reaonably would be fair.
Did you ever get a bonus for doing a good job? Isn’t that what tipping should be?
When the taxi driver actually gets out of the car, opens the trunk, and puts my bag in the trunk, he will get tipped generously. When I pick up my take-out, please don’t show me the payment machine without a zero. If that dinner is delivered to me, you saved me a trip, which has value, therefore a tip.
Tipping has become a form of customer intimidation and not a measure or reward for good service. The result is that level of service will decline, and the tipping process will become thoughtless.
Tipping has become an issue. It’s referred to as “tipflation” or “tip creeping.” Customers are getting tired of it. What was once almost exclusive to the food and hospitality industry has made its way into many other businesses from auto-repair shops to grocery store checkouts. Where does it stop? Will we be tipping people at FedEx or the US Post Office? As for the question of the day, if you want to keep good people (foodservice and delivery), pay them well to start with. That is what gets them to work. The tip is a form of motivation to provide a great experience.
Yes, customers are getting tired of it. Will customers continue to be intimated?
As much as tipping prompts are annoying and can guilt people into giving money, the consumer ultimately remains in control. As such, people should tip when they feel it is appropriate and restrain from giving anything when they feel it’s not. However, the idea of tipping for anything and everything, such as cashiers in store, is ridiculous.
When tipping is at my discretion and it was earned, I’m in. When tipping is treated as an entitlement and nothing has been done to earn it, I’m out.
Food service workers earn their tips, but the automated prompting for 20% and higher (where 15% used to be customary) has caused a backlash. The UK (where I just traveled) makes it so much easier: Every restaurant bill includes a 12.5-15% discretionary upcharge for service, clearly identified on the tab. (And the 15% covered the higher-end places we visited.) It’s different from Danny Meyer’s prior idea of raising prices and eliminating tips — and so much more effective.
TIPS (To Insure Prompt/Professional Service) are no longer the rationale for the current tip always & everywhere mantra. What are the prompt or professional services rendered when paying for a self service order?
However, the article addresses the need to modify the compensation package for food service & delivery drivers. While I personally think both of this services suggest a tip, care must be taken so that customers do not feel taken advantage of.
The world of tipping in the US needs to change. The system is broken. We are no longer expected to tip for great service. We are expected to tip because someone showed up to provide some type of service are no service at all.
We also have tip inflation on the amount we tell the consumer they are expected to tip, and then we are now tipping on the new price we are asked to pay.
I wonder what would happen if you went to a store that said we pay our employees a fair wage, so no tip is required for them to have a living wage.
In fast/convenient foodservice, when the first thing on the payment screen is prompting for a 20% tip and I have to tap the down arrow several times to get to ‘no tip’ when all I’ve done is bought a regular black coffee (zero frills or add ons) from a staff member who didn’t say a word, it leaves a bad brand impression. Tapping a single tip option on a screen is one thing, and if I’ve had great service I will tip, but don’t make people actively navigate away from it.
As a general rule, I tip for delivery, but I prefer to tip cash, as otherwise I’m not sure it’s actually going to the driver.
The tipping prompt at the counter when swiping a credit card should go away. Tipping for service at a table should not unless the food service industry is prepared to flip the compensation system on its head in the US. On a related note, I would like more companies to use services/technology that allow customers to tip service workers if they are not carrying cash, like valet drivers or hotel staff.