To tip or not to tip? Tip fatigue has us second guessing

Picture this: you’ve had an amazing night out with friends, you ate great food, your drinks were delicious, and the service was stellar. But worse than the ‘who’s gonna reach for the bill’, that awkward moment is coming. With a ‘Hope you enjoyed your night!’, the server lays down the payment machine, and stares directly at you as you’re faced with the classic modern day dilemma: how much to tip.

Essentially a given in North American culture, tipping has become a stressful situation for most consumers. With the inflation we’re currently experiencing, more and more establishments are adding a tipping option to help subsidize wages for. And it’s not just for servers and hairdressers anymore—it seems like almost any retail or service payment function now has a tip option.

Feeling exhausted just thinking about it? That’s what we call tip fatigue, and we need to talk about it.

What is the meaning of tip fatigue?

While we may not be ready as a society to fully boycott tipping, there’s no denying that more and more tipping opportunities are popping up. The weight of deciding whether to tip or not—and how much—is getting to people, so much so that we’ve given it a name: tip fatigue.

Tip fatigue is the newest term for the growing frustration and exhaustion customers feel from being constantly prompted to tip. Although, it’s not just the tipping itself. It’s the context in which people are being asked for a tip. More and more businesses that have traditionally not had tipping as an option have added it to their payment screens.

This phenomenon is leading to negative feelings about businesses that frequently request tips, especially when the service provided may not warrant a tip.

USA Today Blueprint in partnership with OnePoll conducted a survey that found that 63% of respondents said that too many places are asking for tips, and 48% said they’re tired of being asked to tip.

Why is tipping a thing?

Let’s pause a second for a history lesson. Why is tipping even a thing?

According to ‘Tipping: An American Social History of Gratuities’ by Kerry Segrave, the practice of tipping started during the Middle Ages in Europe. American travellers brought the custom back to the United States. Tipping didn’t take hold in the U.S. until after the Civil War. Less educated and lower-income workers were being paid a much lower wage. Their employers encouraged patrons to supplement their workers’ wages with tips.

So much has changed since then, but one thing hasn’t: the expectation that customers supplement lower wages. In fact, the federal minimum wage for tipped workers is only $2.13 per hour. Many states have their own minimum wage amount, but the vast majority have a much lower hourly wage for tipped workers. With the overhead of businesses being exorbitant, hiring and employing people at this lower wage helps mom-and-pop shops or new restaurants stay afloat.

The catch for employers is that they’re responsible for making up the difference between the tipped worker’s wage and the regular minimum wage if their employees don’t get tipped enough—which protects the employees. That leaves no room for debate. Employers expect their patrons to subsidize the wages of their employees—and people are tired of it.

The rise of tipping with the rise of technology.

Tip fatigue is becoming more common as digital payment systems make it easier for businesses to solicit tips, even for minimal or self-service interactions. Every POS system has a leave a tip screen, leaving many patrons guilt tipping.

When we had to sit down with a pen and paper and were given time to think about the service and the tip amount, we could carefully weigh and calculate what to offer as a tip for good service. Nowadays when we’re holding a POS with the service provider standing right beside us, we’re likely to tip more. The numbers can feel surreal when it’s all digitally done.

Capterra’s 2023 survey of over 780 U.S. consumers found:
1. 50% felt manipulated into tipping or into tipping more than they intended.

2. 56% felt confused or surprised to see a tip screen.

3. 70% felt they were being asked to tip too often.

But should we be tipping just because we see that tip amount screen?

This leads us to the real question. Who do you tip and how much?

How much do people really tip?

A large part of tip fatigue comes from just not knowing who and what to tip. How much is acceptable? Let’s break it down to make it easier for you.

Sit down restaurants

Sit-down restaurants are at the top of industries where people are expected to tip. Even with that standard set, there’s been a big dip in tipping. Currently, 65% of patrons always tip, which is down from 73% last year, and 77% in 2019. A lot of this is attributed to the rate of inflation.

Servers aren’t only responsible for taking your order and delivering your food, but they manage timing, clear tables, run drinks, do other restaurant tasks, and handle unhappy customers—and they tip out other team members like hosts, bartenders, and cooks.

If you do choose to tip your server, 15% is typically the bare minimum. Anything above that is for good service. A leave a tip screen will often prompt you to choose an amount between 15% to 25%.

Fast-service restaurants and take-out service

When you go to grab food you’ve ordered over the phone or online, do you tip? This survey says that most Americans don’t. Only 13% always tip when they go to pick up their order from a restaurant or fast food location.

There’s a perception that when you grab the food yourself, you’re getting less service. Even though fast-food workers work very hard, the belief is that they are doing their job—and shouldn’t be tipped for that.

The truth is that if you’re doing take-out service at a restaurant, servers still have to run around and pack the order. They also often tip out the kitchen on those orders. So, if you’re able, consider tipping for take-out service starting at 10%.

Delivery drivers

Having food delivered straight to your door became more common with the rise of Uber Eats and with the pandemic leaving us housebound. Because we were so grateful for delivery drivers working during the pandemic—and offering us a service we so desperately needed—tips were high.

Tips have dropped quite a bit since those days. The percentage of adults who always tip food-delivery workers fell from 59% in 2021 to 50% in 2023.

If you think about the time and effort it takes to deliver food door-to-door, it’s a good idea to tip your delivery drivers. Tipping 15% is the expected minimum, with 20% being considered a good tip. Were they fast? Were they kind? Did they brave bad weather? Consider tipping that 20% if you said yes.

Coffee shop baristas

If you’ve ever woken up desperate for your caffeine fix and rushed to your local coffee shop, we can bet that you love your barista. But does that mean you should tip them?

People tend to tip baristas more frequently because a $1-$2 tip is much easier to part with than a $10-$20 tip for a server. Also, because people visit their local coffee shop more often than say a restaurant, they develop friendly relationships with their barista—which also leads to more tipping.

Baristas make anywhere from 100-300 cups of coffee a day. That’s a whole lot of coffee. If you want to show some goodwill, you can always round up your purchase. There’s no set amount that’s standard to tip a barista. Some people tip $1 a cup and others tip the change they’ve got in their wallets. Either way, baristas are grateful for the generosity.

Hair stylists and barbers

Next to servers, hairstylists and barbers are the most tipped service providers by a mile. But just like servers, salon workers have seen a large drop in tips over the past couple of years. This may be because the prices of these services have risen. With the cost of products going up and chair rentals going up, the price of getting your hair done is higher, meaning less room in the budget for tips.

Salon workers are on the list of ‘definitely tip.’ The amount you tip all depends on the services you get and the time spent in their chair. If you’re getting a wash, cut, colour, and style, that’s a stylist’s entire day. Giving a 20% tip is a good tip for someone who spent their entire shift helping you.

There are many other service providers who get tipped. Think Uber drivers, taxi drivers, housekeepers, babysitters or nannies, and even some retail workers. When in doubt, start at 10% and go up from there depending on how good the service was.

Just remember, you do have a choice. Figure out what feels right to you before you head out to alleviate the pressure you might feel when you’ve got that POS in your hands.

Should I feel bad if I don’t tip?

This is a tough question. The simple answer is: no one’s obligated to tip. It really is up to the patron. Knowing what we know about minimum wage and how much abuse service providers take, we’re inclined to say yes.

But as we’ve been saying, it’s normal to feel tired of tipping. You aren’t alone in that. And while inflation has affected servers’ wages, it has also affected your wages and you’ve got every right to be discerning of what you spend your money on.

We think the old rule still applies. If you receive good service, give a good tip. Just remember that service providers are humans too. They have good days at their job and bad days at their job. It’s not their fault that their living wage depends on tips.

Confused about tipping?

One thing that can make tipping easier for customers—and help them avoid tip fatigue—is when business owners go the extra mile. Think about automatic gratuities for things like large groups, when restaurants automatically add an 18% service charge for groups of 6 or more. While it might be more than you were considering tipping, it does make things a lot easier because they’re taking the guesswork out of the equation.

As a business owner, clearly designating the difference between service charges and tips, as well as suggested tip options, can go a long way to making your customers feel more comfortable—and more likely to tip.

Tip laws and management for owners and managers

Struggling with how to manage tip outs, tip pooling, and how to record staff tips on your taxes? Let Homebase lend a hand.

Homebase is an all-in-one app and software tool that makes managing things like tips and employee pay easy for both team members and owners. Not only does the software directly link payroll and shift scheduling together, it makes all that complicated data seem more straightforward, meaning employees get paid the right amount on time, and you’re less stressed managing your business. And that’s a win we can definitely get behind.