They say if you can’t afford to tip, don’t go to a restaurant. But when one is prompted to tip 18% or more for a morning latte, counter-service lunch, drivers and more, the cost of going out can leave customers feeling fatigued, confused and pressured to dole out more money to minimum-wage workers than they used to.
“Some of the causes for this are really increased inflation and companies not being able to increase wages, so they pass that onus onto the consumer to increase wages through tipping,” says Meagan Baskin, director at Southwest Florida Leadership Institute and associate professor of management at Florida Gulf Coast University’s Lutgert College of Business.
Many of these businesses use kiosks and portable credit card readers with suggested tip options, from 18% to 25%, rather than leaving the choice completely up to customers.
“There’s plenty of literature that says people will go up to the suggested amount in tipping,” says Amir B. Ferreira Neto, director of the Regional Economic Research Institute at FGCU.
The Bottom Line, a publication by point-of-sale software Square, notes that consumers are likelier to tip if they have to press “no tip” to not. Consumers can feel guilt-tripped, but Maria Joyce, executive director of The Protocol School of Naples, suggests it’s deeper than that.
“Even though we are burdened by this guilt tipping and the expense of it, what is really bothering us is we’re feeling cheated that we have to pay up for service that we’re not receiving,” she says. “I don’t want to feel the pressure of having to tip somebody for service I’m not receiving or is substandard.”
Joyce said being deliberate about where one is spending their dollar can make giving tips feel more comfortable and intentional.
“Let’s try to be diligent, strategic and selective. Don’t return to a business where you feel uncomfortable tipping for no service at all,” Joyce says. “[People] shouldn’t be in a business that they note from the door they’re not going to get the service they’re entitled to.”
A pleasant experience goes both ways, she adds. “Always be polite, and always go in with your smile and try to build a relationship, because if you’re putting your best foot forward, and generally when you smile and talk to people, they can’t resist but to give it back to you.”
Tipping also tells service-industry workers how a customer feels about their work.
“Sometimes, you get in your head if you’ve done a service that’s $300 to $400, and they don’t tip,” Emily Hart, co-owner of Salon Adrian, says. “We try not to take it personally because we don’t understand everybody’s financial position. It’s appreciated but never expected, and if it’s outside their budget, I don’t want them to feel obligated.”
Hart said she makes 25%-30% tips on average, 5%-10% higher now that the company uses Tippy, a tipping software separate from the salon’s point-of-sale system that directly deposits tips to a stylist of the customer’s choosing. “We are trending higher with the tips since we’ve used the Tippy system,” which suggested tip percentages, she adds. “Nobody likes to do the math when you’re standing there.”
Baskin said customers could find it helpful if more companies increased transparency of where electronic tips are going, especially regarding counter service.
“I think it’s extremely unethical for companies to use tipping to offset or subsidize the cost of employee wages. It should all go directly to the employees because that’s the intent of tipping,” she says.
Still, customers should not be pressured to tip, she added. And when one is not sure whether to tip, Baskin suggests asking, “‘What is the service I’m receiving, and does it necessitate tipping?’ When there is no service being received, I don’t think there’s a tip that’s necessary.”
Managing tipping and inflation
Don’t expect costs to come down anytime soon, said Amir B. Ferreira Neto, director of the Regional Economic Research Institute at FGCU.
“We live in a world where prices are higher, and the only way we’ll have it go down is if we have a deflation, and that would be a sign of lack of economic growth, so that’s not something we really want to see,” Neto says. “Consumer spending continues to be strong throughout this inflationary period, so tipping continues to be a strong part of the economy.”
If businesses were to cut out tipping, we may see even higher costs.
“We’ve seen some businesses that won’t allow for tipping, but they pay higher wages. So, they increase the price of the goods to account for that additional cost of what was first passed onto the consumer,” Neto adds.
Doing things differently can be difficult.
“First, we would have to see a change in business behavior, but people would also have to change their mindset. Many still have a tipping culture of wanting to leave a tip because [someone] did an excellent job, so that would have to change, and changing norms is really hard.”