Thanks to “tipflation,” a 20% gratuity isn’t what it used to be.
With more opportunities to tip and predetermined point-of-sale options that now range from 15% to 35% for each transaction, tip expectations are growing, whether consumers like it or not.
“Sometimes you tip to reward good service, but only at restaurants do I tip out of obligation,” said Michael Lynn, a professor of consumer behavior and marketing at the Cornell University School of Hotel Administration.
Otherwise, it depends, Lynn said. “I don’t tip for carry out or counter service,” he added. “I don’t tip the Amazon delivery guy but I do tip the pizza delivery guy.”
Tipping 20% at a sit-down restaurant is still the standard, most etiquette experts say. But there’s less consensus about gratuity for a carryout coffee or other transactions that didn’t involve a tip at all in the past.
While tipping at full-service restaurants has held steady, tips at quick-service restaurants by guests fell to a five-year low of 16.7% at the start of 2023, according to Toast’s most recent restaurant trends report.
These days, fewer consumers also said they “always” tip when dining out compared with last year, according to Bankrate, or for other services, such as ride-hailing services, haircuts, food delivery, housekeeping and home repairs.
“It’s still OK not to tip,” according to Jaime Peters, Maryville University’s assistant dean of accounting, finance and economics. “It really is a tip; it is not obligatory.”
Peters said she primarily tips 20% in a sit-down restaurant, but less for other transactions.
Some workers rely on tips
In most other countries, “tipping remains a small gesture of gratitude,” Peters said.
But in the U.S., tips make up a larger part of workers’ pay, particularly in industries like entertainment, food service, and leisure and hospitality.
In some of those jobs, workers make less than minimum wage because they are considered “tipped employees.”
Under federal law, employers can pay workers as little as $2.13 per hour — much less than the minimum wage — if the tips they receive bring them up to a baseline salary. (Some states are now increasing the hourly minimum wage for tipped employees or have eliminated tipping wages altogether.)
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