Here’s why Americans are sick of tipping: the survey

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By Erica Lamberg, Fox Business

June 10, 2023 | 8:21 p.m

Americans turn to a variety of services more often, which has shown a steady decline over the past few years, according to new data from Bankrate released this week.

Also, two-thirds of respondents (66%) have a negative opinion of tipping, including 41% who said they feel companies should pay their employees better rather than relying so much on tips.

People are annoyed by previously introduced tipping screens (32%), share that the current tipping culture has gotten out of hand (30%), and note that they would be willing to pay higher prices if they could get rid of tipping. (16%), and confusion about who and how much to tip (15%), Bankrate reports.

In his opinion, what caused negative changes in the past year was the economy, says Ted Rossman, senior industry analyst at Bankrate.

“The biggest change, over the past year at least, is that inflation is leaving people with less money to run around,” Rossman told FOX Business.

“A lot of people seem to feel that things already cost enough, so they’re not likely to tip on top of that.”

He also says that the “great wave of appreciation” for workers in the service industry that was evident early in the pandemic seems to have died down.

But we were seeing a significant decline even before the pandemic. The “tip crawl” that’s happening — where you’re asked to tip for things that don’t warrant a tip — seems to bother a lot of people.”

Gratuity for accepting food varies by service

Tipping is becoming increasingly ingrained in our society, Rossman says, and workers depend on it.

“Consumers won’t want to pay higher prices, and if you don’t tip generously, you’re hurting the worker, not the business,” he says.

The issue of accepting tipping in relation to food items often includes the type of service and can include seated dining, express service stops, and delivery services.

“I think everyone should tip 20% at a sit-down restaurant, unless the service is really bad,” Rossman told FOX Business.

“Many waiters and waitresses earn less than $2.13 an hour (the federal minimum wage), and tips are expected to increase their compensation.”

Rossman cites research that only 65% ​​of diners sitting on the bench always tip, down from 77% four years ago, and notes that only 44% tip at least 20%, down from 50% last year.

“I think we should always tip for delivery, too. The exact number depends on the size of the order—for example, instead of a percentage, it might make more sense to tip like $5 for a pizza,” Rossman adds.

Consumers may not know that service or delivery fees often do not go to the person delivering.

“I don’t think you should feel obligated to tip if you’re buying fast food. This was something more important during the pandemic when sit-down dining was closed,” he continues.

Why should consumers budget for tipping?

Bankrate’s study notes that high inflation and unease about the economy contribute to consumer vulnerability.

“I understand that money is tight for a lot of people, but I’ve also noticed that tipping often involves a discretionary expense,” says Rossman.

“Honestly, if you can’t afford to tip 20% for a sit-down meal, you probably shouldn’t go to this restaurant. When tipping is a norm, as it is in restaurants, I think consumers need to factor those costs into their budgets.”

Can tip claims go over the limit?

Sometimes the creep of the hint goes too far, Rossman believes.

“I was recently asked to tip by the self-check-out machine at Newark Airport. I also don’t like the way Hopper, the online travel agency, asks for tips when people book travel on their website. I’ve even heard of some doctors’ offices asking tip,” says Rossman.

“All of this looks like blatant profit abuse and appropriation.”

According to Rossman, a tip should be more rewarding for service, and is often expected when someone serves you food or carries your bags.

“It’s not usually about self-service or highly paid professionals like doctors,” he says.

And from his point of view, pre-populated hint screens can be embarrassing.

“Since the cashier will often look right at you when you’re deciding whether or not to tip, the customers behind you may be spying on you, too,” he adds.

The sums are also very strategic.

They are usually 10%, 15% and 20% or 20%, 25% and 30%.

Many people tip in these cases out of guilt.

“Starbucks, for example, says half of its credit and debit card paying customers leave with a tip,” says Rossman.

These pre-entered screens shift the dynamic of tipping from needing to actively decide on the tip (like putting extra change or a few dollars in the tip jar) to actively stating that you don’t want to tip (which isn’t always easy with pre-entered screens) I think a lot of people really don’t want to tip for something like ordering a coffee or a food truck, but they’re guilty of it, and then they feel bad afterwards.”

How has the pandemic affected the behavior of the tipping culture?

The survey indicates that people said they would like better information during and after the pandemic, but that didn’t really last, Rossman says.

“Right now, 14% of Americans say they tip more than they did before the pandemic, and 9% say they tip less,” he explains.

Other components of our survey indicate a significant decrease in the frequency of tipping for various services. Every single category is lower than the recent past.”

How does age play a role in changing attitudes?

The Bankrate report shows that Americans are turning out less to many services, showing a steady decline over the past few years.

According to his research, Gen Zers (ages 18-26), millennials (ages 27-42), and men stand out as the worst types of tippers across multiple service categories.

In general, says Rossman, older Americans tend to be better tippers.

“I think it’s mostly because they have more money, but maybe also because they’re more closely associated with the social norms around tipping,” he says.

This pattern continues across the majority of other services, with differences in how Gen Zers, millennials, and men in particular do hairdressers/barbers, food delivery people, and taxi/cab drivers, says Pankrat.

The study notes that “while 53% of American adults who have a hairdresser/barber always give them advice, only 24% of Gen Zers, 40% of Millennials, and 46% of men always do,” compared to 60% are women, 67% are Gen Xers, and 70% are Boomers.”

Similarly, 50% of American adults who order food delivery always tip the delivery person, but only 31% of Gen Zers, 42% of Millennials, and 45% of men do the same, compared to 54% of women. and 63% are Gen Xers, and 62% are Baby Boomers, the Bankrate study reports.

Finally, according to the study, while 40% of American adults who ride taxis/ride-hailing trips always tip the driver, only 22% of Gen Zers, 30% of millennials and 36% of men always tip. , compared to 45% of women. , 51% of General Xers, and 56% of Baby Boomers.

According to the study, 30% of U.S. adults overall say changing the general culture They say the tipping culture has gotten out of hand, with a tendency to feel this way increasing for older generations and higher earners.

Thirty-three percent of Gen Xers and Baby Boomers agree with this sentiment about tipping culture, compared to 27 percent of Millennials and 22 percent of Gen Zers.

How do income levels intersect with volatile situations?

Forty percent of those in the highest-income households (who earn more than $100,000 a year) say the tipping culture has spiraled out of control, according to Bankrate data, compared with 34% of those earning between $80,000 and $99,999 annually, 33% earn between $50,000 and $79,999 annually and 23% are in the lowest-income household (earning less than $50,000 annually).

And the favor is certainly still important, with the study saying that 35% of people say they feel satisfied when they leave a generous tip.

The Bankrate survey was conducted May 3-5, 2023, with a sample size of 2,437 adults in the United States.