The Emerging Trend Of Tip Inflation
For many years it's been pretty common to expect to tip in a number of different market circumstances, like taking a taxi, having a meal out, getting a massage, having a drink at the bar, and so on. In general, most people abide by the 10-20 percent tipping rule, with 15 being the standard.
Q: Do you think tipping should always be a given in service transactions? Or do do you think tips need to be earned and should only be given out for service that goes above and beyond?
In recent years an increasing number of businesses have been implementing tip-asking into their payment terminals. And tip inflation has been discussed for several years now and some are finding that those terminals are now prompting them to tip on average 20, 25, or 30 percent.
According to data from Square, for those businesses that do implement the tip-asking into the payment terminals, it's been reaping some lucrative results for them. On average, customers are shown to tip at least 35 percent more frequently.
When it comes to average tipping for last year, it seems like the 15-20 rule still stands.
Sometimes consumers are going to be willing to pay more voluntarily simply by being prompted and asked about whether or not they'd like to. And so it's easy to see why many businesses would go down the road of making the change for their terminals to prompt customers about tips and to even go about increasing the ask on those tips to 25 percent or more.
To Tip Or Not To Tip...
Not everyone has a positive regard for tipping, some say its outdated, ineffective, and irrational. Some consumers feel shamed by the tipping prompt and they aren't happy about it.
Others see it as a tool that can enable a minimum wage job to be a valuable stepping stone by providing the individual with incentive to perform well and establish job skills, meet the customers needs and so on. Many people also enjoy and appreciate the social connection and cooperation involved with leaving a tip for someone who they thought did a good job.
When it comes to where you can likely find the most tips, states like Alaska, Arkansas, and North Carolina have come out on top with an average of around 17 percent.
And the lowest? They've been seen to be states like Hawaii, South Dakota, and Delaware.
Pics:
Pixabay
Sources:
http://time.com/money/3394185/tipping-myths-realities-history/
https://www.reuters.com/article/us-money-retail-tipping-idUSKBN1962D3
https://www.theguardian.com/commentisfree/2015/feb/06/coffe-shops-tip-inflation-stingy-millennials
http://www.startribune.com/tip-inflation-is-becoming-issue-for-consumers/430411323/
https://mises.org/library/praise-tipping
https://qz.com/189458/the-united-states-of-tipping/
https://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/are-you-being-prompted-to-tip-20-consumers-grapple-with-tip-inflation/article35356290/
https://qz.com/730315/squares-design-guilts-us-into-tipping-basically-everyone/
I typically tip but I think it needs to be earned. I have had some down right terrible service before. Once a waiter spilled water all over our table and my lap. Didn't apologize and basically didn't get anything to clean up it till we asked him. I'd be very upsetting if I had to tip for that.
Not trying to be combative but I am reading replies from a lot of uninformed consumers. Almost every state has laws that let tipped employees to be paid less. I am a Regional Manager for Restaurants in Los Angeles. Most states, on average, pay their service staff $3 to $4 an hour. So as I'm reading all these " I only tip when I feel like it" replies, Just know someone was paid $3 with no guarantee for more money except the opportunity of a tip while you and your family sit at one of their tables and enjoy your meal for an hour. I am SURE if that server was your son or niece you would be really upset if they only made $3/hr and was not tipped.
So because of the government and some law and restaurant owner paying 3 to 4 $ You are gonna shame people who don't tip. Blame the restaurant owners tell them your sentence: I am SURE if that server was your son or niece you would be really upset if they only made $3/hr and was not tipped.
edit; Maybe you did that already, that I don't know of course.
Who says the owner has that money to give?! Your assumption is that all restaurant owners have a Scrooge McDuck vault of money. Imagine you have 5 servers at $3 who work 8 hours a day. What do you want to pay them? $13 sounds like a good number. $10 extra dollars an hour x 5 employees x 40 hours a week x 52 weeks in a year=? I know what it equals. It equals that restaurant shutting down and you not having the luxury of choosing that restaurant to sit down and eat dinner at and deciding if you want to tip or not in the first place.
I have seen nice restaurants sell $3 million a year in food and drinks and make $12k a year in profit after liabilities like rent and labor. In this scenario, you want to add another $104,000 to the balance sheet in the form of higher wagers and expect them to stay open? The math just isn't there. Please bring an educated comment telling me why I am wrong if you are going to reply. What you replied was not helpful or informing and that is what this community is about.
This is my thoughts on tipping. As best explainded by Mr. Pink.
pretty much sums up what i wanted to say too
couldn't be said better.
Tips should be earned and based on how satisfied the customer is to the service provided. It also gives incentive to provide better service. I usually tip for standard service, and tip more when i feel the service is outstanding. I would be upset to tip someone who are not friendly and seems unhappy doing their work
I serve at a restaurant in Disney world. At least with serving and in most cases tipping is essential for us to make a living. @jeffjagoe most of the time a included tip, is just a suggested tip. A tip can be completely removed or if you liked the servicec you can increase the tip to compensate appropriately. Not only is the hourly wage for most servers next to nothing, but in most resturaunts especially major corporate ones the server is expected to "tip-out" anywhere from 3 to 6% of their sales. At my particular place of business it is 4%. A percentage of that tip out goes to the bar, hostess, and busers. This is a part of a bigger problem where these corporate places are using the servers to pay the labor for other positions in the restaurant. All these other positions being tipped out rely on the servers sales for their income as well. Also if a no tip is left at all for the server they still pay out of pocket to serve the table. Serving tables is like being a 1099 contractor, we pay for all our own supplies and equipment( shoes, uniform, office supplies, etc.) and essentially are just leasing the space or "station" we have in a restaurant. The food the ambiance and theme is the product we represent and sell.
Tipping is very IMPORTANT. I am not saying all service deserves one cause sometimes someone really sucks at their job but it is essential part of our income for servers and the other service support staff.
Tips need to be earned.
You should always tip 15%. Any more is actually the tip in my opinion
The tipping custom in the US is weird, no doubt about it. I would prefer to see wait staff paid a standard wage, and tips be a voluntary gift rather than a necessary payment in lieu of wages.
I suspect the tax system, wage laws, and old tradition combine to a hard-to-overcome status quo.
Its all of those things. But now we have dug a financial hole in this country with inflation where we would have to choose. Lose 90% of the restaurants in the entire country or pay a fair standard wage that won't put workers below the poverty line. Anything less and the math just isn't there. Rock and a hard place now.
"We" haven't done anything. Place the blame where it belongs. The government is not us.
For sure.
Another interesting topic to think about. Ya know...I live out here in Vegas and it's just normal to tip. I usually do not even think twice about it. For restaurants, you really have to do a sh*tty job to make me even think about altering the tip. But I still tip. I do not have really many bad experiences. If service is slow I do take notice how busy a place is and if they are understaffed. Which is typically the case and if that is the case I NEVER let that alter the tip.
One time with my two children we were at a restaurant and they were busy. And our poor server was getting killed. It was slow but we still had a good time. When we got the bill I could tell he was apologetic. So I gave him a nice tip and thanked him for taking care of us. He looked SHOCKED. But I think it goes back to the "Kindness Contagion" piece you wrote. Perhaps this set a series of positive things to come from it. And I still had great time with my kids anyway.
Many people have stated 'tipping is important. I need it to survive....'. If that is true, the company is not paying enough. Tipping should be a reward for good service, not part of the basic pay check.