Americans aren’t letting inflation get in the way of leaving more tips—but that doesn’t mean they’re happy about it.
According to payment processing firm Square, people in the U.S. Left gratuities more frequently in 2022 than they did a year earlier.
Food service business saw a rise in tipping frequency in the third quarter of last year, even on the heels of inflation hitting 40-year highs, data provided by Square showed.
While inflation cooled toward the end of the year, it still remains high—but apparently not high enough for consumers to cut back on how generous they are with hospitality staff.
In the final quarter of 2022, the frequency of tips left at full-service restaurants in the U.S. Rose by 16.5% from a year earlier. At quick-service restaurants—like coffee houses and fast-food outlets—the rate at which Americans tipped staff increased by 16% year-on-year.
Frustration with expanding tipping culture
U.S. Consumers may be tipping more often, but that’s not to say they’re thrilled about how many businesses are now asking them to pay a gratuity on top of the price of a service.
Complaints have arisen over the past year about service providers from mortgage companies to locksmiths expecting tips, as workers who traditionally might not be given gratuities take advantage of digital payment methods to request a tip during transactions.
Last year, Starbucks rolled out a new tipping system that gave customers paying by credit or debit card to give their barista a $1, $2 or custom tip. The change was met with some backlash from customers who felt short changed.
“I went through the Starbucks Drive through and got one drink and they now start asking if you want to tip as soon as you pull your card out to pay while looking at you, it’s so awkward,” one Twitter user wrote at the time. “Just pay these people a better wage.”
Representatives for Starbucks were not available when contacted by Coins2Day.
The increase in digital tip prompts, which often ask consumers to leave gratuities as high as 30% of their bill, has sparked a debate around “guilt tipping,” with many disgruntled consumers taking to social media to air their grievances.
“I’m not going to tip you just because you turned the iPad around and I pushed a button,” one person said on TikTok. “For me it’s just companies trying to get away with not paying their employees what they deserve—they have the assets to pay more but they just don’t want to. They give you this option to tip, this social pressure to tip.”
“Tipping culture has gotten out of hand,” another said in a video shared to the platform.
“Today I went to Shake Shack and there was nobody at the counter, you go up to a little kiosk, a little computer screen, you push in everything you’re going to order, and wouldn’t you know it, the next screen that pops up is ‘tip,’” he said, before jokingly adding: “I work here now—you should be tipping me.”
Shake Shack did not immediately respond to Coins2Day’s request for comment.
Others have described being pressured into tipping—and have admitted feeling compelled to do so even when the service has been bad.
Increase in tip requests could backfire
According to one expert, many consumers in North America are experiencing “tip fatigue,” which has arisen from “being bombarded with tipping requests more frequently.”
Michael von Massow, an associate professor of food economics at the University of Guelph in Canada, wrote in an article last month that eventually, the increase in tip requests could backfire.
“At the very least, tip fatigue means customers are leaving interactions that involve tipping with negative feelings,” he speculated. “But at the worst, tip fatigue could cause customers to tip less or stop altogether. Those pushing to increase tipping risk alienating consumers who find the amounts and the range of services expecting tips too much.”
A spokesperson for Square told Coins2Day that it was possible restaurants who may not have asked for tips in the past were now turning on tipping functions at their tills as they expanded their businesses.
“With this sort of expansion, businesses are wearing multiple hats, with tips reflecting the additional labor that is going into their services,” they said. “While your local market may not expect tips during normal grocery store hours, they might ask for tips in situations like hosting a pop-up dinner or a cheese-making workshop. Given the economic stresses of the pandemic and beyond, too, businesses are trying to find mechanisms to provide more support for their staff.”
They added: “As more payments go digital, so will the physical tip jar.”
