Do You Think Tipping Fatigue is Justified Given Rising Service Fees and Prices?

Do You Think Tipping Fatigue is Justified Given Rising Service Fees and Prices?

Here’s The Scoop

In recent years, American restaurant-goers have been leaving smaller tips, reflecting a broader cultural shift that some might argue is long overdue. According to data from Toast, a company that provides point-of-sale systems to restaurants, the overall tipping average for U.S. restaurants was 18.8% in the third quarter of 2024. This marks a decline from previous years, with tipping rates slipping from 19% in 2022 and 19.2% in 2021.

For full-service restaurants, the average tip rate fell to 19.3%, down from 19.6% in 2022 and 19.8% in 2021. Quick-service restaurants saw a similar trend, with tips averaging 15.9% in 2024, compared to 16.1% in the previous two years and 16.5% in 2021.

These declines are not just a post-pandemic phenomenon; they also fall short of pre-COVID levels seen in 2018 and 2019. Experts suggest that “tipping fatigue” is a significant factor. Ted Jenkin, co-founder of oXYGen Financial, explained to FOX Business that Americans are tired of being pressured by automated systems that dictate tipping amounts. “Americans do want to tip a job well done, but they don’t want to be told what they should tip while someone watches them enter their tip,” Jenkin noted.

Bankrate’s senior industry analyst, Ted Rossman, echoed these sentiments, observing a “noticeable downturn” in tipping frequency over the past few years. A Bankrate survey from June 2024 revealed that only 67% of U.S. adults always leave a tip at sit-down restaurants, an 8% drop from three years ago. This trend extends beyond restaurants, with fewer Americans consistently tipping hairstylists, food delivery workers, baristas, and rideshare drivers.

Inflation is certainly squeezing American wallets, but there’s more at play. Rossman highlighted a growing annoyance with tipping culture, noting that 59% of American adults harbor at least one negative view about it. The rise of “tip creep,” where consumers are prompted to tip in previously unconventional settings, is exacerbated by technology. Payment apps and screens now make tipping unavoidable, often leaving consumers feeling awkward if they choose not to tip.

The pandemic initially led to increased appreciation for service workers, but this has morphed into a persistent expectation for tips, even as businesses hesitate to raise prices. Instead, they often rely on tipping as a hidden surcharge, shifting the burden to consumers without increasing wages themselves.

Non-optional gratuities and service fees have become more common, prompting diners to leave smaller tips, especially as menu prices soar. A SpotOn survey from May showed varied tipping expectations among restaurant workers, with over a third considering 15% the minimum acceptable tip.

As Americans navigate these economic and cultural shifts, it’s clear that the conversation around tipping is far from over. The balance between fair compensation for service workers and consumer fatigue with tipping culture continues to be a hot topic.

What do you think? Let us know by participating in our poll, or join the discussion in the comment section below!

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