Tipping has become a controversial issue in recent years as “tipflation” increases and more consumers complain of experiencing “tip fatigue.” Customers are still tipping, but totals are declining, with 30 per cent of this year’s customers tipping restaurant servers 10 per cent or less, up 19 per cent from last year.

How are customers feeling about tipping these days, when value is top of mind for many consumers, and how can operators bridge the gap between boosting the bottom line and keeping customers coming back for more?

Offering value

As consumer wallets get tighter and they look even more closely at discretionary spending, it’s often a matter of perceived value. “The continued squeeze on consumer bank accounts is impacting restaurants and other industries that are heavily reliant on tips,” Brendan Sweeney, CEO and co-founder of Popmenu, said in a statement. That, combined with steadily rising food costs, may be discouraging guests from wanting to tip, as they are already spending more on their meals.

Operators need to find ways to provide value without compromising their margins, from LTOs to add-ons to loyalty-driven rewards and beyond.

Providing a positive experience

This year, 61 per cent of diners have felt pressured to tip, and 60 per cent of consumers are tired of tipping for services at different establishments. Often, it’s a perceived expectation from restaurants that turns patrons off, discouraging them from wanting to tip. However, guests who enjoy their experience, stay engaged, and get to know your staff are more likely to tip generously.

“…Restaurants should just be delivering on a customer experience that is differentiated and unique,” said Sal Nazir, general manager of payments at Par Technology. “If they’re able to do that, I think customers will go out of their way and [say], ‘Hey, I want to reward you for your service.’”

Transparency is also key. Customers don’t want to feel like they’ve been tricked, so policies, like auto gratuities for groups, need to be made perfectly clear to your customers.

Using technology

Studies have shown greater restaurant success with technology adoption like tablets that can help simplify the experience, lessening customer frustration with confusing screens and smaller buttons. Many restaurants have invested in streamlined technology like self-order kiosks and pay-at-table tablets where tipping is embedded in the ordering process, making it easier to just become part of the process. Another advantage of this technology is the data available, which can help restaurateurs decide the best times to add tip prompts based on traffic and the amounts based on diner behaviour.

Tipping can be a controversial issue, but at the end of the day, operators and guests need to find a system that benefits both parties in today’s tough economic times.