Have we reached peak tipping?

Tipping has risen over the past two years, but recent data suggests it’s falling back to pre-pandemic levels.

Would you like to add a 30% tip to that $6 oat milk latte?

Have we reached peak tipping?

According to The New York Times, a trend toward bigger and more frequent tips since March 2020 is due in part to cultural pressure to support frontline workers and the proliferation of digital tip menus.

Research shows…

… serving up tip choices to customers generally leads to bigger tipping. A working paper from the Stanford Graduate School of Business analyzed millions of NYC taxi rides, and found the average tip jumped by ~11% when customers were given menus with three tip options.

Then, there’s the social aspect of tipping. Tip menu options served up on point-of-sale tablet apps, like Square, can make it awkward not to tip — especially if the worker can see your choice. It’s also easier (and less shameful) to tap a percentage option versus doing math in your head.

But tip menus can backfire…

… if the options are too high. For instance, if options start at 25% and scale up to 30%-35%, customers may view it as exploitative and tip less in response.

Tipping fatigue is setting in, too: Now that inflation is sky-high and the restaurant scene is returning to normal, customers feel less compelled to tip everywhere, per NYT.

At quick-service restaurants, the average tip is declining. In April 2020, the average tip was 23.5%; this year, it’s down to ~20%.

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