Tipping is out of control. At least that’s what 3 out of 4 Americans think – according to a new survey by WalletHub. Let’s take a look at their findings.
Tipping Tumult
Tipping is a big deal in the U.S., but it’s not so common in other parts of the world where workers are paid more. Lately, though, people are beginning to think that tipping has gotten out of hand.
Is It Getting Out of Hand?
It used to be just for servers and barbers, but now you’re expected to tip in all kinds of places – even at self-checkout machines.
Pandemic Pressures
Since the pandemic restaurants and businesses have been feeling the pressure. Lower takings, coupled with higher business expenses and employee wages, have led places to try out all manner of experiments to try and recoup their lost finances.
Businesses Turn to Tipping to Stay Afloat
A common solution in many businesses is just to increase the reliance on the tips. Relying on tips lets businesses offer their staff more money without promising pay rises – which are an impossibility for some small businesses in the current economic climate.
Mandatory Service Charges
Some restaurants will add a mandatory service charge, which has slowly been creeping up in the years since the pandemic. What may have been a 15% charge two years ago can now be as much as 25%.
An Unwelcome Trend in Dining
This, of course, has not done these establishments any favors in the eyes of the customer.
Americans Weigh in on Tipping Trends
A survey by WalletHub found that nearly 3 out of 4 Americans think tipping has gone too far. Most people believe tipping should be optional, not something you have to do all the time.
Many also think that businesses are relying too much on tips instead of paying their workers properly.
Optional or Obligatory?
Some other interesting findings from the survey include: About 64% of people think tipping should be a choice, not a requirement. And, nearly 3 out of 5 Americans think businesses are using tips to replace employee salaries.
Americans Push Back Against Digital Tipping
Over a quarter of people reduce their tips when prompted by a screen, while nearly 80% believe automatic service charges should be abolished. Furthermore, half of Americans report feeling compelled to tip, regardless of the quality of service received.
Tip or No Tip?
Americans tip on average 16%, according to a Forbes survey from 2023. While tips are a lifeline to industry workers, many Americans think they are a nuisance – especially when they’re pressured to leave a tip and haven’t had good service.
The Cost of Courtesy
When factoring in the current cost-of-living crisis, which is driving up the price of food, many people are finding it increasingly difficult to pony up an extra 25% for a tip.
Tipping’s Reach
The rise of tipping is, in part, due to the rise of food delivery services like DoorDash, Uber Eats, and Grubhub.
Restaurants to Retail
The popularity of these platforms has normalized tipping, and now it’s normal to tip in bakeries, fast food joints, and coffee shops. Some grocery stores have even begun asking for tips.
The Rise of Tipping at Self-Checkout
Digital tipping is a trend that many people dislike, especially when it’s part of using a self-checkout machine – an interaction that requires no human contact whatsoever.
Dave Portnoy Speaks Out
Barstool Sports founder Dave Portnoy recently came out against tipping culture in America in an interview with Stuart Varney, stating, “I don’t do it to be a nice guy, Stuart. I’m deathly afraid of somebody seeing me not tip, and them be like, ‘Dave Portnoy is a cheapskate who doesn’t tip.’ So that, I live in fear of, and it forces me to tip at all times.”
Global Contrasts
The tipping culture in other countries is very different from that in the U.S.
Tipping Norms Around the World
10-15% is the norm in Europe, Latin America, Australia, New Zealand, and the Middle East. In some Asian countries, they prefer people not to tip and would rather just receive a polite thank you.
Tipping Troubles
Tipping is an issue that will only get worse as inflation rises.
Restaurant Owners Grapple With Inflation
Many restaurant owners have no other option but to increase their reliance on tips as food and rent prices increase across the board. For many, it’s either do that or close their doors for good.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
