Tipping has become an increasingly prevalent practice in the United States, with the customary tip percentages steadily rising over the years.
In the 1950s, it was customary to tip 10% of the bill. By the 1970s and 1980s, this had increased to 15%.
In 2023, tipping typically ranges from 15% to 25%, with an average of more than 21% according to a Creditcards.com survey conducted in May 2022.
This phenomenon, often referred to as ‘tipflation,’ has permeated various aspects of our daily lives.
Etiquette expert Thomas Farley, also known as “Mister Manners,” observes that we are frequently presented with opportunities to tip, often via tablets or digital interfaces.
The COVID-19 pandemic further amplified tipping practices, with consumers extending tips to service industry workers for services they had not previously tipped for.
For example, in February 2020, just before the pandemic, 43.4% of remote transactions in the food and drink sector offered tipping options. By February 2023, this figure had risen to 74.5%.
Restaurants also began encouraging tipping when customers picked up their orders, mirroring the practice of food delivery tipping. This trend remains persistent.
One contributing factor to the increased tipping culture is the emergence of sleek and modern technologies, such as kiosks and tablets that display three prominent tipping suggestions.
Business owners often select these suggested tip amounts and can disable the feature as desired. Creditcards.com reported that 22% of respondents feel pressured to tip more when presented with these options.
Mike Lynn, a professor of consumer behavior and marketing at Cornell University’s School of Hotel Administration, explains that these suggested tip amounts set a normative range for tipping, leading customers to tip within that range. As a result, the more these options are presented, the higher the tips become.
Square, Toast, and Clover are three prominent companies known for their trendy and user-friendly interfaces.
These companies, established approximately a decade ago, have revolutionized the way businesses operate by offering tools that simplify credit card processing, reduce fees, and provide various other management features.
Dave Koning, a senior research analyst at Baird, highlights Square’s exceptional growth in the credit card processing industry.
However, as tipping continues to rise, it raises the question of whether there is a logical ceiling for tip percentages.
Mike Lynn contemplates this issue, stating that while tipping is likely to increase, there must be a logical limit, though its exact point remains uncertain.