Why Has Tipping Culture Become So Confusing?

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Tipping has become a psychological game in which someone hands you a device with your bill displaying your apparent fixed tipping options, then mentally coerces you to tap “25%.” They should at least screen-protect the devices from your anxious sweat and tears.

Even airport self-checkout kiosks are asking for tips. Who are you tipping? Yourself? Americans are feeling conflicted—even angry—about the practice of tipping. It has gone from a mostly standard gesture of appreciation to one of confusion as it evolves due to new customs and technological changes.

Tips have become the 'participation trophies' for anyone in retail.

It all started with “Suggested Tip” printed at the bottom of your restaurant receipt, with the math equations already done for you—because no average diner can be trusted with simple addition once sated on deconstructed quesadillas.

Today you might find yourself in a silent but annoyed assembly struggling to know who to tip, how much, and how often. This economic state is known as “tipflation,” but there is guidance managing the new frontier of tipping etiquette.

Why consumers are so confused

According to the Pew Research Center, 72% of U.S. adults say tipping is expected in more places today than it was five years ago.¹ But as Americans feel guilted and squeezed to tip more often, only about one-third of us have confidence about when and how much to tip for different types of services.

Moreover, there is an emerging backlash to all the unjust "tip creep," in the form of less tipping frequency overall.² In the stages of tipping, we’ve gone from confusion to anger to refusal.

If all they did was spin the iPad around, you should confidently be able to tap “No Tip.”

Tipping, unfortunately, lacks a single set of rules or expectations. And, as inflationary prices rise, there is often surprise when we receive a bill and then must add more in the form of a gratuity. Also, there are different service levels to consider, such as those at coffee shops versus high-end restaurants. “Tipping norms are created through collective behavior, and what most people tend to do ends up setting the standard for others,” says personal-finance expert Jonathan Merry. At this rate, Americans will start expecting a tip when they hold a door open.

The rise of tipflation

“There's an increasing recognition of the disparity between wages and living costs, particularly for those in the hospitality industry, leading consumers to tip more voluntarily,” says CPA and founder of The William Stanley Group, Michelle Delker. “Societal pressures and expectations add to this, creating what could be perceived as a social guilt dynamic,” she adds.

Yes, it's a guilt trip tip.

As inflation and financial unease throttle American tipping habits, we’re passive-aggressively confronted with more invitations to tip than ever. The pandemic spurred more tipping generosity, as there was a swelling of support for service workers who risked their health to show up at work. That fervor has waned, but service charges and tip expectations have endured. We have tipping fatigue like we’ve been tipping cows. The result is that Americans are now tipping less overall, even as more places ask for them.

Tipflation is further driven by low wages for workers. “Many service workers rely on tips to supplement their low pay, leading to a perception that higher tips are necessary to ensure fair compensation,” says David Reyes, founder of Reyes Financial Architecture. “Businesses have embraced tipflation by introducing pre-set tipping options and encouraging customers to tip more generously,” he adds. All this while inflation has eroded the value of wages in general.

How digital point-of-sale systems like Square encourage tip creep

The industry shift from analog to digital point-of-sale systems (e.g. Square and Toast) and app-based service platforms (e.g. Uber and Lyft) has disrupted tipping norms, resulting in new tipping practices. “The way these digital screens prompt for tips feels more coerced than the laid-back approach of a cash tip jar sitting on the counter,” says Merry. “These systems overwhelm customers with the frequency at which they're asked to consider tipping, creating a sense of pressure regarding whether to tip and how much to give."

Digital point-of-sale systems with their preprogrammed tipping options subconsciously prod customers to tip, or to tip more than they otherwise would, in a form of tip creep. Their displays prompt consumers with tipping options such as 15%, 20%, or 25%. “This, combined with the social discomfort of appearing cheap or unappreciative in front of staff, can push consumers to opt for higher, pre-set tipping rates,” says Delker. That’s why people sometimes give verbal tips instead: “Thank you so much. You were the best!”

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You don’t need to tip a barista who hands you a microwaved croissant. They didn’t churn the butter.

Not long ago, leaving no tip was the default option. Now, digital payment systems force you to opt out. “According to behavioral economics, people prefer not to make financial decisions, and these payment systems compel users to make decisions they don't want to. They force users to opt out of leaving sometimes very generous tips, which can make the consumer feel guilty,” says CFA and president of Bemiston Asset Management Ryan Graves. If tipping feels stressful, remember that quokkas toss their babies at predators so they can escape a bad situation.

The current standard practices

"As a standard practice, tipping in most cases is culturally expected and ranges from 15% to 20% of the total pre-tax bill, especially in dining establishments,” suggests Delker. However, this is not a steadfast rule, and you should use tipping guidelines that work for you no matter the external prompts or social pressures. Even if they wait and stare at you.

“The three groups of people you should tip are those who help with your dependents, those who provide personal services, and the people who help maintain your home,” advises president and owner of Mannersmith Etiquette Consulting, Jodi RR Smith. “For quick service or counter service, 10% is the guideline. For meals and personal care/grooming, 20% is the standard. Tip anyone who helps you year-round the cost of one session. If you pay your dog walker $50 per week, then the year-end tip would be $50,” Smith says. For people whose services you use less often, tip less.

“It’s also important to know who not to tip,” cautions Smith. Certain professions are not allowed to accept cash tips, such as mail carriers, municipal workers, and, typically, garbage collectors and teachers. Consider a smaller gesture instead.

“Developing a personal tipping strategy should ultimately take into account local customs, service quality, employee reliance on tips, and personal financial considerations,” says Delker. It’s always your personal choice to determine the amount you feel is appropriate. And, if you’re ever unsure who or how much to tip, it’s perfectly OK to ask the potential recipient what range is generally recommended.

If you enjoyed this post, please consider a gratuity.