Countless consumers feel tipping is starting to lose its original meaning of not only showing appreciation for a job well done, but also making sure the service person gets paid what they deserve.
Customers state that it seems like everyone is asking for a tip these days, particularly several types of businesses where patrons never were expected to tip before. USA Today reports that even a mortgage company has started to ask for tips.1 It is not only the number of industries asking for tips that has increased, but the suggested tip amount has risen from the range of 15-20% to 20-30%. Cambridge Dictionary calls this increased amount of tipping, Tipflation.
Tipping larger amounts as well as tipping workers who traditionally wouldn’t receive a tip, such as a package delivery person, began in 2020. The intent was to show appreciation for essential workers as well as help the restaurant industry which took a beating with the COVID-19 lock downs and other pandemic restrictions.
The post-COVID world also saw an increase in cashless vendors. Digital check out at restaurants and stores is often preset with a tipping screen. As a result, even customers at a self-serve kiosk are asked to leave a tip. Restaurants are still encouraging guests to leave tips over 20%. Another reason for the larger tip request can be traced to the job market and inflation. Service businesses are fighting for workers and attempting to draw them in with better wages through tipping.
Reasons aside, these practices have led to “guilt tipping” since no one wants to be the person who doesn’t tip. Studies have shown that when screens are added that ask for tips people feel pressured and leave a larger amount than they would otherwise.2
However, tipflation has led to “tip fatigue” for some consumers and they have begun to tip smaller amounts and tip less often.3 Tipping less for workers who depend on tips, such as restaurant servers, means they are earning less. Workers in the restaurant and other industries where tipping is traditionally the norm are paid less per hour than other type of workers. Contrary to popular belief there is more than one type of minimum wage. The two types of minimum wage are tipped minimum wage and federal minimum wage. The tipped wage is the minimum cash wage or the lowest amount you can pay a tipped employee per hour of work.
The federal tipped minimum wage is $2.13 per hour as opposed to the higher federal regular minimum wage of $7.25 per hour for other types of employees. It should be noted, states with a higher regular minimum wage also have a higher tipped minimum wage. For example, New York’s tipped minimum wage is $10.65 per hour for tipped workers such as waiters and waitresses. New York's minimum wage for a fast food worker is $15 per hour, and the regular minimum wage is $16 per hour for untipped workers. Tips are supposed to close the wage gap, so the worker earns at least the regular minimum wage.
Who should you tip?
With all kinds of businesses asking for tips, it can be confusing to decide who should actually be tipped. However, tipping should primarily be for service industry workers as they usually receive the tipped minimum wage and are making less per hour than those outside the service industry. Here is a general list: grocery/floral delivery, food delivery, drivers, valet, porters, hotel housekeeping, restaurant servers, bartenders, hairdressers, barbers, and manicurists.
While there is no need to give a tip or a higher tip every time you are asked, workers who are being paid the tipped minimum wage should be tipped, especially if the service is good.
2.https://www.investopedia.com/tipflation-8180832
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