Tip or not to tip? It’s a decision we all have to make.
The culture of tipping in America has adapted its own language with tipflation, tip creep and tip fatigue, experts say. But what does it all mean? Here’s a breakdown:
Tipflation is a blend of tip and inflation. It refers to the rise in the tip amount expected — often starting at 20% and increasing as much as 30%.
Tip creep is the rise in tip prompts appearing at touch-screen checkouts.
Believe it or not, tip fatigue relates to the backlash from customers who are starting to object to the pressure to tip, especially when they don’t feel it’s warranted.
Tipflation became a part of the nation’s vocabulary earlier this year as inflation pushed up the cost of living and consumers became more sensitive to their spending decisions.
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Whether you’re in a restaurant, grocery store or coffee shop, tipping is pretty much expected, and you may be one of those people giving in.
“The number of places accepting tips increased during the Covid lockdown year,” said Stephen Day, the director of the Center for Economic Education at Virginia Commonwealth University’s School of Business.
“Customers were feeling generous then. The problem is that once a restaurant starts accepting tips, it’s tough to go back.”
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Day also told Spanning The Need research shows that customers are sensitive to price increases on menus, so increasing prices to help pay for higher wages can lead to restaurants losing business.
“Paying employees with tips is a better option for the restaurants (thought not necessarily for the workers or the customers),” he said. “Recent data from a payments business called Toast showed that tip amounts have decreased for the first time since the pandemic started. People are getting tip fatigue.”
So, how should consumers handle it?
“I recommend that customers decide ahead of time what their tipping principles are, and stick to them,” Day continued. “Decide how much you tip at restaurants, and just give that amount. Decide whether and how much you tip at places that historically accept tips, like coffee shops, and places that don’t, like retail stores.”
Day pointed out that having a consistent tipping policy can save you mental anguish or keep you from stiffing workers because you’re feeling grumpy.
When should consumers give tips?
In America, Day said, tipping at sit-down restaurants is a must because servers are paid low hourly rates. Their compensation is designed with the assumption that people tip double-digit amounts.
“If you don’t tip at a place with table service,” Day said, “your server is basically not getting paid.”
How about back of the house workers?
“Personally, I think servers should tip out to the kitchen,” said Day, who jokingly recalled being jealous of how much servers and delivery drivers earned after tips.
“But that’s just the perspective of a former dishwasher at a pizza restaurant.”