Tip demands are getting out of hand?  Many consumers say yes.

Tip demands are getting out of hand? Many consumers say yes.

  • Business
  • January 25, 2023
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Across the country, a quiet frustration is brewing over an age-old practice many say is spiraling out of control: tipping.

Some consumers, fed up, are posting tirades on social media complaining about tipping at drive-thrus, while others say they’re tired of being asked to tip a muffin or a simple cup of coffee in their Leaving neighborhood bakery. What’s next, they wonder—are we going to tip our doctors and dentists too?

As more businesses adopt digital payment methods, customers are automatically prompted to leave a tip — often up to 30% — in places they normally wouldn’t. And some say it’s gotten even more frustrating as item prices have skyrocketed on inflation, which fell to an annual rate of 6.5% in December but still remains painfully high.

“And they talk about the 18% tip already included in the bill. Girl it’s water,” one person recently said on TikTok.

“Suddenly these screens are in every store we come across. They also pop up online for online orders. And I’m afraid there’s no end to it,” said etiquette expert Thomas Farley, who views the whole thing as “an invasion.”

Social pressure from screen prompts

Unlike tip jars, which shoppers can easily ignore if they’re short on change, experts say digital requests can create social pressure and are harder to circumvent. And your generosity, or lack thereof, can be exposed to anyone close enough to look at the screen – including the workers themselves.

Dylan Schenker is one of them. The 38-year-old makes about $400 a month in tips, which is a helpful addition to his $15 hourly wage as a barista at a Philadelphia cafe that’s located in a restaurant. Most of these tips come from consumers ordering coffee drinks or interacting with the coffee shop for other things, e.g. B. Takeout orders. The tip helps pay his monthly rent and lightens some of his burdens while he attends grad school and balances his job.

Schenker says it’s hard to sympathize with consumers who can afford expensive coffee drinks but complain about tips. And he often feels demoralized when people don’t leave anything — especially if they’re regulars.

“Tipping is about making sure the people who are providing that service to you get paid what’s owed to them,” said Schenker, who has been in the service industry for about 18 years. But he added that it is primarily up to the employer to ensure employees are paid fairly.

“Responsibility should definitely lie with the owners, but that won’t change overnight,” he said. “And that’s the best we’ve got right now.”

Traditionally, consumers pride themselves on being good tips at places like restaurants, which typically pay their workers less than minimum wage, with the expectation that they will make up the difference in tips. Wages for restaurant workers vary widely by state, with hourly wages frozen at $2.13 an hour in some states, according to the Labor Department.

However, academics studying the topic say many consumers are now irritated by automatic tipping requirements in cafes and other counter-service restaurants, where tipping is not typically expected, workers earn at least minimum wage and service is typically limited.

After being asked on a website to tip 20% after ordering a pizza for pickup, a stunned customer immediately took to social media to express his frustration. “20%? What for? What did you do?” asked a TikTok user in a video that has since garnered over a million views.

“People don’t like unsolicited advice,” said Ismail Karabas, a marketing professor at Murray State University who studies tipping. “They don’t like being asked for things, especially at the wrong time.”

“It makes you sick”

Some of the requests may also come from unusual places. Clarissa Moore, a 35-year-old who works as a supervisor at a Pennsylvania utility company, said even her mortgage company has been asking for tips lately. She is usually happy to leave a tip in restaurants and sometimes in cafes and other fast food places when the service is good.

But Moore said she believes consumers shouldn’t be asked to tip almost everywhere they go — and it shouldn’t be something that’s expected of them.

“It makes you feel bad. You feel like you have to do it because they’re asking you to,” she said. “But then you have to think about the position that people get into. They pay for something they really don’t want to pay for, or they tip when they really don’t want to – or can’t – tip. They can’t afford to tip – because they don’t want to feel bad.”

In the book Emily Post’s Etiquette, authors Lizzie Post and Daniel Post Senning advise consumers to tip on ridesharing services such as Uber and Lyft, and on food and beverages, including alcohol. But they also write that everyone is free to decide how much to tip at a coffee shop or diner, and that consumers shouldn’t feel embarrassed about choosing the lowest recommended tip amount, and they don’t have to explain it themselves, if they don’t tip.

Digital payment methods have been around for a number of years, although experts say the pandemic has accelerated the trend towards more tips. Michael Lynn, a professor of consumer behavior at Cornell University, said consumers were more generous in tipping in the early days of the pandemic to show their support for restaurants and other businesses that have been hit hard by COVID-19. Many people genuinely wanted to help and were sympathetic to workers who held jobs that put them at higher risk of catching the virus, Lynn said.

“It’s a relatively new phenomenon,” Dipayan Biswas, a marketing and economics professor at the University of South Florida, told CBS Philadelphia.

Professor Biswas has been involved with tipping for ten years. Like Cornell’s Lynn, he says this new tipping trend started with the digital kiosk boom, then the pandemic “added extra flow to that fire,” plus inflation and more companies allowing tips to make jobs more lucrative at your expense.

“I see it becoming more widespread,” Biswas said.

Larger tips in restaurants

According to Square, one of the largest companies operating digital payment methods, tips in full-service restaurants increased by 25.3% in the third quarter of 2022, while tips in quick service or counter restaurants increased by 16% compared to the same point in 2021 .7% rose . The data provided by the company shows continuous growth for the same period since 2019.

As requests for tips become more common, some companies advertise tipping in their job postings to attract more workers, although the extra money isn’t always guaranteed.

Danny Meyer, CEO of upscale Union Square Restaurant Group, announced in 2020 that his restaurants would move away from a five-year tipping policy when they reopen after months of being closed at the start of the coronavirus.

The company, which owns the Gramercy Tavern and Union Square Cafe, laid off more than 2,000 workers after New York ordered restaurants to close in 2020. Concerns that workers would not return without the lure of tips were a major factor in the decision to reintroduce tipping, Meyer said on LinkedIn at the time announcing the decision.

In December, Starbucks introduced a new tipping option for credit and debit card transactions at its stores, something a group organizing the company’s hourly workers had called for. Since then, a Starbucks spokesman said, nearly half of credit and debit card transactions have included a tip that — along with tips received in cash and through the Starbucks app — is distributed based on the number of hours spent a barista worked on the days the tips were given.

“tipping recession”

Karabas, the Murray State professor, said some customers, like those who have worked in the service industry in the past, like to tip workers at quick-service companies and wouldn’t be annoyed by the automated requests. But for others, research shows they may be less likely to return to a particular company if they feel irritated by the requests, he said.

Analysts at tech firm Branch are pointing to a “tipping recession” as persistent inflation prompts a shift in US consumer attitudes. Since the onset of COVID-19, the number of restaurant patrons tipping has declined steadily, falling from 77% in 2019 to 73% in 2022, according to a Creditcards.com survey.

The last tab can also affect how customers respond. Karabas said in research he conducted with other academics that they manipulated the payment amounts and found that when the check was large, consumers no longer felt as irritated by the tip demands. This suggests that the best time for a coffee shop to request a 20% tip, for example, might be four or five orders of coffee, not a small cup that costs $4.

Some consumers may continue to dismiss requests for tips, regardless of the amount.

“When you work for a company, that company’s job is to pay you to work for them,” said Mike Janavey, a shoe and apparel designer who lives in New York City. “They’re not supposed to be juicing consumers who are already spending money there to pay their employees.”

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