Traditionally, tipping has been a way to reward workers for providing good service. But the norms around tipping are changing, and if you’ve recently felt more pressure to tip, you’re not alone. A survey by the Pew Research Center found that 72% of adults said that tipping was expected in more places today than it was five years ago, a phenomenon known as “tip creep” or “tipflation.” 1

The gift of tipping has its origins in 1700’s England, where patrons would tip in advance of receiving service in order “To Insure Prompt Service”, hence TIPS.  It wasn’t embraced by all Americans, in fact in the 1890’s a movement came about to attempt to ban TIPS.  It seems a second movement related to TIPS is underway.

While the American wage pay scales reflects the “gift” of TIPS as a normal part of payment and wages, it is not often expected in other cultures, as many of our readers can attest to.  In fact, in some cultures, the gift offering of a tip can be considered rude.

Why tipping culture is changing

Tipping affects everyone (even tipped workers have to tip others!) and confusion and complaints about tipping abound. Studies have shown that those in hospitality are the highest tippers.  If you’re among those feeling uneasy about tipping, blame the pandemic. That’s when tipping culture really started to change. Consumers, anxious to reward front-line workers and support struggling businesses, left more and bigger tips. To survive and become more lean, businesses began adopting digital ordering and payment solutions that made tipping more convenient and could be programmed with preset tip suggestions that were often higher than customers were used to.

And then inflation took its toll.

Businesses that lost employees during the pandemic increasingly realized that tips could help fill wage gaps and attract employees reluctant to return to service positions. But consumers, already having to make their money go further, began to grow weary of seemingly non-stop constant tip requests, especially in situations or places where they had not previously been asked to tip.

To Tip or Not to Tip?

Percentage of U.S. adults who say they always or often tip for:

Average Tippers

Source: Pew Research Center, 2023

Tipping guidelines

Tipping often feels good, but the pressure to tip can be guilt-provoking and confusing. When a worker turns a screen around and you’re prompted to choose a preset tip, it can feel wrong to choose the lowest option. While you might always tip your server at a sit-down restaurant, in situations where you’ve had little to no direct interaction with any employee, should you even tip at all?

Last month, this blogger and her family enjoyed sundaes at a local, otherwise considered, a fast food-joint.  New signs were on the tables with QR codes – “Skip the line, order from your table!”  We scanned the QR code, punched in our toppings, linked to Apple Pay and then…. the tip bar.  At a fast food joint, where I placed my own order?  But having worked in hospitality, and knowing the downsides to not being kind to those who make your food, we grudgingly tipped.

Then just last week, while strolling down a hometown main street for local retail shopping, it was surprising to see that little screen turned around and be presented with a TIP option on a retail purchase.  Suggested tip: 15% on a little local grab.  That’s a whole lot more than rounding up or offering “keep the change”!

Ultimately, tipping is always voluntary and it’s up to you to decide who, where, and how much to tip. While there are no set rules, here are some guidelines you can use to inform your decisions.2

  • Full-service restaurant or food delivery: 20% of total bill
  • Quick service restaurant: 10%
  • Online food orders/takeout: $1 to $5 per order
  • Bar or coffee shop: $1 to $2
  • Hotel bellstaff: $1 to $5 per bag
  • Hotel housekeeping: $1 to $5 per night
  • Valet/parking attendant: $1 to $5 when car is delivered
  • Rideshare/taxi driver: 15% to 20% of the fare
  • Salon staff: $5 per assistant (ie: shampoo)

Finding a balance

Planning ahead can help you avoid some of the frustration around tipping and still tip fairly and appropriately.

Do an informal audit. How much have you spent on tips during the last month or two? Does that align with your budget?

Set tipping limits you’re comfortable with. You can always make adjustments at the register.

Reserve higher tips for special situations. This might be rewarding a worker at your favorite coffee shop, or showing your appreciation when someone provides extra-special service.

Don’t feel bound by on-screen tip recommendations. Use the “custom” tip option when available to leave the amount you want.

Carry small bills. These can be used in traditional tip jars, or when traveling, to reward workers who don’t have access to digital tips.  For leaving a nice surprise, leave tips in increments of $2 bills… which you can still get from your local bank.  For a bundle of 2’s to keep on hand, call ahead and pre-order the bills.

Talk to the manager or business owner if you have questions or complaints. It’s not always clear where your tips are going (for example at fast-casual restaurants or when ordering online), so feel free to ask. And reserve your complaints about tipping expectations for management, rather than workers.

Respect policies. While many businesses encourage tipping, some do not allow their employees to accept tips for legal reasons. Instead, consider leaving positive feedback.

We all feel the pressures of the Tipflation phenomenon as it affects the evolving dynamics of gratuity in our modern economy. As digital payment systems proliferate and the service sector diversifies, the traditional norms surrounding tipping are being reshaped.  In America tipping will remain deeply ingrained as a gesture of appreciation for good service.

It’s becoming more essential to recognize when tipping is warranted and when it might be a product of technological or social pressures rather than genuine service quality.

The bottom line lies in that tipflation requires a mindful approach from both consumers and service providers. By staying informed and considerate, we can ensure that tipping remains the fair and appreciated practice it is intended to be, reflecting true gratitude rather than a response to escalating expectations. As we move forward, a collective effort to balance generosity with fairness will be key to maintaining the integrity of this time-honored tradition.

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Sources: Broadridge Investment Management Solutions

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1) Pew Research Center, 2023
2) Toast, 2023; American Hotel & Lodging Association, 2023; U.S. News & World Report, 2023