Americans facing a radically different tipping culture

Mar 27, 2023, 12:30 PM

A Square payment device at a store in New York, US, on Thursday, March 23, 2023. Shares in Square-parent Block plunged Thursday after Hindenburg Research disclosed a short position in the stock while claiming that the digital payment company facilitates fraud with Cash App consumer services. (Yuki Iwamura /Bloomberg via Getty Images via CNN)

(Yuki Iwamura /Bloomberg via Getty Images via CNN)

BY NATHANIEL MEYERSOHN, CNN

CNN Wiresource

(CNN) — More stores now offer customers the option to tip, from coffee shops to ice cream stores.

Around 48% of purchases at fast food restaurants, as well as coffee shops, included a tip during the final quarter of 2022, according to data released this month from Toast, a restaurant management software company. That was up 11% from pre-Covid levels.

But Americans are tipping less.

The tipping percentage for quick-service restaurants last quarter was 15.9%, dropping from 16.4% last year, according to Toast.

People are tipping less in part because of inflation, experts say. They are also overwhelmed with the number of places that give them the option to tip with a card on an iPad, leading people to be less generous.

Customers and workers today are confronted with a radically different tipping culture compared to just a few years ago — without any clear norms.

Although consumers are accustomed to tipping waiters, bartenders and other service workers, tipping a barista or cashier may be a new phenomenon for many shoppers.

It's being driven in large part by changes in technology that have enabled business owners to more easily shift the costs of compensating workers directly to customers.

Adding to the changing dynamics, customers were encouraged to tip generously during the pandemic to help keep restaurants and stores afloat, raising expectations.

The shift to digital payments also accelerated during the pandemic, leading stores to replace old-fashioned cash tip jars with tablet touch screens. But these screens and the procedures for digital tipping have proven more intrusive than a low-pressure cash tip jar with a few bucks in it.

Customers are overwhelmed by the number of places where they now have the option to tip and feel pressure about whether to add a gratuity and for how much. Some people deliberately walk away from the screen without doing anything to avoid making a decision, say etiquette experts who study tipping culture and consumer behavior.

Tipping can be an emotionally charged decision. Attitudes towards tipping in these new settings vary widely.

Some customers tip no matter what. Others feel guilty if they don't tip or embarrassed if their tip is stingy. And others eschew tipping for a $5 iced coffee, saying the price is already high enough.

Correction: A previous version of this article incorrectly stated that 48% of quick-service restaurants now give customers the option to tip. Forty-eight percent of purchases at quick-service restaurants included a tip, according to Toast.

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