Americans are tipping more often, even if they don’t want to
Americans may be grumbling about the new rules of tipping — whatever those are exactly — but they’re ponying up anyway.
Figures that the payment processor Square provided to NBC News show the frequency of gratuities at full-service restaurants grew 17% in the fourth quarter last year from the same period in 2021, while tip frequency at quick-service restaurants rose 16%. Restaurants deemed quick-service, like coffee shops and fast-food chains, typically do not offer wait service, the company said.
Square found those tipping increases came on top of gains in the third quarter for both types of establishment.
T.J. Horn, a 41-year-old construction laborer based in Boston, said a 20% tip has been his standard minimum since the lockdown era, even on a $3 cup of coffee.
“It’s just become a common expected thing in my brain,” said Horn, who added that having friends in the restaurant industry softened his outlook on tipping. “I see how much abuse they take on a daily basis.”
The jump in tipping frequency comes despite a period of record inflation that has whittled away many consumers’ discretionary income. And it coincides with a shift toward spending on services and experiences, like travel and dining out, during the recovery from the pandemic recession.
The past few years’ economic changes may have helped shape attitudes like Horn’s, consumer experts say.
“Big disruptive moments reset habits,” said Americus Reed, Whitney M. Young Jr. professor of marketing at the University of Pennsylvania’s Wharton business school.
“The big part is just a realization and appreciation for human contact. If we get really great service, and you have a really great connection with a service provider, it fills you with joy,” he said. “It’s almost like a chemical reaction — that you’re paying for that dopamine hit.”
But that doesn’t mean all patrons who’ve been tipping more often are doing so solely out of the kindness of their hearts.
The point-of-service, or POS, systems that restaurants increasingly use to process payments have made it easier than ever for customers to offer — and businesses to solicit — gratuities, experts said.
“People don’t like to expend cognitive resources,” said Deidre Popovich, associate professor of marketing at Texas Tech University. “These retail establishments have gotten better at providing us with those default choices to kind of prompt that tipping behavior.”
In a recent survey of restaurant executives by industry group Hospitality Technology, 71% of respondents said using data to “understand guest preferences and behavior” was their main reason for making POS upgrades. For 57%, enabling new payment options was paramount.
Those devices and software also give businesses more ways to calibrate tip amounts. For example, managers can set the tip percentages customers can choose from, and even include a certain selection in the subtotal by default.
Not everybody likes that, and some consumers have been complaining on social media about ‘tipflation.’
“This is your job. It’s getting way out of hand,” chirped one Twitter user who said they recently declined to tip on a Starbucks order.
“At the cafe pressing ‘no tip’ on the tiny iPad as I maintain eye contact with the barista,” another posted, as though narrating their defiance of what is sometimes an uncomfortable social interaction.
So far, the rise in tipping frequency suggests resisters remain a minority faction. Even if some find the POS nudges irritating, many are likely adding a tip anyway.
I can help out where I can, but you don’t tip the clerk at CVS for taking the aspirin bottle and handing it to you.
Tyler Cooper, 34, who lives in Oakland, Calif., and works as a tech marketer, said he’s noticed the default tip selection at quick-service shops “keeps increasing.” He said he adds gratuity for complicated orders but is frustrated with what he sees as a growing expectation to subsidize workers’ pay.
“I make a good living, so I can help out where I can,” he said, “but you don’t tip the clerk at CVS for taking the aspirin bottle and handing it to you.”
Consumers aren’t necessarily tipping more generously, though. POS operator Toast found the average tip of around 19% on its systems has remained basically flat for much of the past 12 months. Even quick-service restaurant tips have held steady, hovering at just under 17% in the second and third quarters last year as inflation surged.
“Tipping is still slightly up compared to the time right before the pandemic in 2019,” a Toast spokesperson added.
Hannah Mase, a 25-year-old barista at Lobos Coffee Roasters, an Orlando-based cafe, said a customer recently tipped 14 cents when prompted on the touchpad. Mase said that while she thinks American tipping culture is “kind of ridiculous” in the absence of more equitable wages, gratuity often comprises a substantial portion of her paycheck.
Of the $765 she earned during the last two-week pay period, with her base pay of $10.50 an hour, $263 came from pooled tips.
“We’re making you something not from thin air, but from all the ingredients that we have back here,” said Mase, who is also pursuing a recording arts degree at nearby Full Sail University. “It’s not exactly advertised how much somebody at a local coffee shop is making hourly, but those tips do go a long way.”
Many consumers described encountering tipping prompts sans wait service as “awkward.” Even patrons who are open to adding to their tabs said they’re unsure when to tip and how much.
Diane Gottsman, an etiquette expert and founder of the Protocol School of Texas, recommends gratuity in most situations but said consumers looking to deflate their anxiety at the register can ask themselves: Did they give me a reason to tip?