Restaurant tips remain strong, despite inflation and ‘tip fatigue’

Despite reports of tip fatigue among consumers, new data indicates that people are actually tipping more in restaurants.

Square, the company behind most of the iPad point-of-sale devices you might see at a local restaurant or cafe, found that the total number of tips received in the fourth quarter increased by 16.5% year-over-year at full-service restaurants and 15.9% at quick-service restaurants.

The rise comes despite high inflation and surveys indicating consumers are feeling stretched by an abundance of iPads asking for advice across all types of businesses.

With digital payment methods automatically prompting customers to tip, many feel compelled to tip, said Nathan Warren, assistant professor of marketing at BI Norwegian Business School.

It’s not tipping in restaurants, where tips are expected, that upset some Americans, but tipping requests in places where they normally wouldn’t tip, Warren said.

“You never know when you’re going to be asked for a tip request,” Warren said.

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What is tipping fatigue?

Complaints about iPads asking for a freebie at various companies can be found all over social media, with some claiming it has led to “tipping fatigue”.

Nearly one in five Americans tip a wider range of services, and about half say they tipped when they normally wouldn’t because an iPad asked them to, according to a September survey of more than 1,000 people in the United States by PlayUSA. , a website that covers the gaming industry.

According to Matthew O’Connor, head of vertical markets and platform at Square, more businesses may ask customers to tip as their operating model changes. For example: a café may start asking customers for advice after it has started offering a breakfast menu.

“Businesses wear many hats, with tips reflecting the extra labor that goes into their services,” O’Connor said in an emailed statement.

A tipping option is displayed on a card reader at a restaurant in Schaumburg, Ill., Tuesday, Jan. 10, 2023. Tipping fatigue, it seems, is gripping America as more businesses embrace digital payment methods that automatically prompt customers to tip. (AP Photo/Nam Y. Huh)

Are we witnessing “tip fatigue”?

Despite surveys showing that consumers feel overwhelmed by requests for tips, data from restaurant management software company Toast shows that customers still tip between 15% and 20%.

Average tips for full-service restaurants remained unchanged between the second and third quarters at 19.6%, while quick-service restaurants saw the average tipping percentage drop slightly from 16.9% to 16.8% , according to Toast.

“Our tip percentage on credit card transactions remains fairly stable,” said Drew Weintraub, vice president of restaurants for Eleven Hospitality Group, which operates restaurants in Las Vegas, Atlanta and Salt Lake City. “There hasn’t been a huge drop in any of our sites.”

Miguel Hernandez, chief operating officer of Rreal Tacos in Atlanta, said his staff have been able to provide more advice since they started using handheld tablets to run credit cards in August 2021.

He said servers went from $50 to $80 in tips per shift to $200 to $300 with the tablet.

“They are able to turn roles more quickly,” he said. “You’re able to make sure that those servers, in that short time of a shift, can make 20-30% more money.”

Calvin Roose, general manager of Smokey Row Coffee Co. — which operates cafes in Iowa — says tips vary widely from place to place, but have remained stable. The company also saw sales increase after updating its point-of-sale technology around 2017.

Roose said baristas typically earn an extra $2 to $7 an hour in tips.

“Tipping for our baristas is a big part of their take-home pay,” he said. “In general, our tips have remained fairly consistent.”

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Do people tip less?

While data from Square and Toast indicate that tipping has remained high in restaurants, other surveys indicate that people are tipping less overall.

PlayUSA’s survey found that 17% of Americans tip less due to inflation, and a November survey from restaurant tech company Popmenu found that 43% of consumers had tipped 20% or more to servers in 2022, up from 56% the previous year.

Lizzie Post, co-author of the book “Emily Post’s Etiquette, The Centennial Edition,” attributes tipping fatigue to a combination of pandemic-induced stress, inflation and the growing popularity of screens that ask for tips.

“People see it with every interaction,” she said. “So it’s not like when you go into food or the service industry, you see it in retail experiences, which was totally unexpected, and people didn’t feel good about it. .”

Restaurants are giving up on tipping

It’s not just customers who are tired of the tipping culture. It is also restorers.

Joey Ward, chef and owner of Southern Belle and Georgia Boy in Atlanta, switched to an inclusive service model in July. Each guest’s bill now comes with a 25% charge which is split between the staff and helps to cover paid vacations.

“(We wanted) to provide a better quality of life for our staff,” Ward said. “Why not just (ask customers) to pay a price and have it cover the costs of the business instead of hoping we’ve done a good enough job that you think we deserve to eat or pay our rent?”

Ward noted he was nervous before making the switch, but says his clients “overwhelmingly embraced and celebrated.”

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What is the general rule for tipping?

We don’t tip everyone the same way, Post said.

A tip of 15% to 20% in a restaurant, for example, is expected, while tipping in the tip jar at a coffee shop is discretionary.

“It’s up to you if you leave” a tip in a tip jar, Post said. “Workers in these establishments are usually paid differently than restaurant workers, which is why it’s a bit different.”

Tipping screens are no different from tip jars. The only difference is that consumers must tap “no tip” on the screen if they’re not leaving a tip, Post said.

When an establishment has a tip jar or screen, consider the circumstances surrounding your order, such as its complexity and whether or not the establishment is busy.

“For tipping jar situations, we generally say up to 10% is what we see most people doing in America and feeling good about doing it,” said Post, co-chair of the Emily Post Institute. . “You can always leave more and you don’t have to leave anything in these situations.”

For which services should you tip?

In “Emily Post’s Etiquette,” Post and her co-author Daniel Post Senning recommend tipping on food and beverages, including alcohol, as well as on rideshares like Uber and Lyft.

You don’t have to choose a suggested tip percentage on screen, especially if the amounts are inflated, Post said. And don’t feel embarrassed if you decide not to tip in certain situations.

“When it comes to that discretionary tipping, tipping jar type moment, even though it’s a screen in front of you, you can make the decision,” Post said. “It’s nobody’s business, (including) the people behind you, what you give.”

Here are tips on how to tip in some everyday situations, according to “Emily Post’s Etiquette”:

  • Tipping jars: Tipping is entirely up to you. You can leave the currency of your order or a dollar or more, depending on your order.
  • Personal Services: You typically add a 15% to 20% tip when paying for services at businesses such as salons or spas.
  • In restaurants: You are expected to tip no less than 15%. “If you don’t have the money to tip at a restaurant, you can’t go out to eat that night,” Post said.

“Regardless, when deciding whether to tip or how much to tip, it’s incredibly important to keep the gratitude in your tip,” Post said. “Look the person in the eye if you are able to make eye contact, and be sure to say please and thank you and wish them a good day.”

USA Today

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