Today’s tipping trends

Tip-flation and fee fatigue have been in the news as high inflation continues and consumers look to save their pennies. With costs continuing to rise, are consumers tipping and how do they feel about the shift in tipping culture?

Reports show that consumers have negative feelings towards tipping, with about 30 per cent of consumers feel that tipping culture has “gotten out of control.”

Restaurants are the most commonly tipped service, with 81 per cent of people always tipping for a restaurant meal. However, the standard 15 to 18 per cent tip has shifted, with 57 per cent tipping 15 per cent or less. 18 per cent of people tip less than 15 per cent for an average restaurant meal, with two per cent choosing not to tip at all.

Studies suggest that tip fatigue is to blame for the decline in restaurant tipping, as customers have started to resent tipping prompts. Some consumers are feeling pressured to leave a larger tip when they are prompted to choose an amount in full view of their server, especially as many of the prompts now list 18 per cent as the minimum amount, rather than the previous standard of 15 per cent.

Takeout is another matter. Studies show that only 13 per cent of diners leave a tip when picking up their order at a restaurant. Experts suggest that conventional takeout does not require tipping, however noting that it is appropriate if there is a complicated or large order, or curbside pickup is involved.

To combat tip fatigue and maintain their margins, some restaurants are introducing surcharges that look like three to five per cent of the cheque total listed in a line item at the bottom of the bill. According to reports, 15 per cent of restaurants have added surcharges to their billing so far this year, and it’s expected that more will follow.

This strategy may benefit restaurant employees on a broader level. Rather than this revenue going to the servers, restaurateurs would be able to use this income to provide health benefits, cover additional expenses, or raise wages for their employees.

Operators will need to get creative in recouping growing costs, improving the guest experience, and combatting fee fatigue with their customers in the coming months.