In the News: Is Tipping becoming too much?

[Pesso]

Hey Sellers,

A big thanks to @TCSlaguna for finding and bringing up this article! 

This week we’re talking tips, with an article and video from CBS News reporting on the increased prevalence of businesses asking for tips, and the negative reaction that customers are starting to have. Looking forward to hearing about how your business and customers are handling tipping.

CBS News: "Tipflation" may be causing tipping backlash as more digital prompts ask for tips

According to the article, more businesses in the U.S. are asking for tips, especially through digital payments and registers. They even quote Square’s statistics that nearly 75% of remote food and beverage transactions automatically ask for a tip. They go on to say that as a result more customers are starting to become resentful and are less likely to tip, which might mean that it’s backfiring to a certain extent. It also did mention some of the positives, that some services providers with digital transactions and invoices can more discreetly have a prompt for tips without the traditional added pressure and awkwardness. 

When I owned my ice cream shop, we accepted cash tips for our employees, but not credit card tips. We paid our employees above the NYC $15 minimum wage, so tips became a bonus and not relied on. Even more, from our own experiences as customers at other businesses, we didn’t really love the pressure to tip that a screen on a register could sometimes lead to. We also had Square Loyalty, which a lot of our customers used, and in order to get to that screen, customers had to go through the tip screen, which just added to that pressure and in some cases led to folks not using Loyalty. But on the other hand, a lot of customers did ask us if we could accept credit card tips moving forward, so there was definitely an eagerness there. It’s a tricky balance! 

I know that tipping culture varies in different areas and countries. In the U.S., the onus is put on the customer to decide and leave a tip, even though it’s an expected and basically obligatory thing. Meanwhile in Europe it’s often added automatically to the bill, and is at a customers’ discretion in other parts of the world. Tell us about how it is where you are. 

What’s your perspective:

• How does your business handle tips?

• Have you seen or felt any recent changes in tipping at your or other businesses?

Can’t wait to hear your thoughts!
Pesso

[Michael_L]

Tipping has value, but only because of our minimum-wage business culture.

Being a server at a restaurant is one of the few ways a college student can earn a decent income, because of the tips.  So many restaurant owners pay the bare minimum that it wouldn't be a good job without it.

I will agree, though, that tips are getting out of hand.  Not so long ago a 10% tip was ok and a 15% tip was for good service, now the minimum suggested is often 18% going up to 25% (some have seen even more).  Tipping is also appearing in places where nobody is giving you personal attention - if you line up and get a coffee from the counter, the barista is just handing over a product.  Asking for tips in that situation is unpleasant to customers - even if it isn't "required", the question being asked still feels like pressure.

[StudioSkyn]

I own and operate my own skin care studio, so I am in a similar situation as @HairByBobby.  I have amazing clients who understand that as a service based business the prices of my services are what they are and they still happily tip. I do offer a "No Tip" option which has been used about 8 or 9 times in the past 3 years. My clients tend to leave leave tips anywhere between 20% and 60% of the service prices.

As a customer when I dine out I always leave a tip to some degree, even if the service isn't the best, I understand it's not always the server's fault. I worked in the hospitality industry for 15 years as a server, barista, and bartender so I fully understand how the food and beverage sector operates. I will gladly tip 20-30% when I'm dining-in and being serviced.

When I'm ordering take-out/pick-up from a restaurant that offers dining-in, I will tip $1 per item. I'm not interacting with anyone other than being handed my food and the dollar per item should be more than enough. There is nothing special about having someone boxing up food, placing it in a bag and handing it to you compared to having someone interacting with you (off and on) for 30-60 minutes.  Servers continuously check back with you, provide refills, ensure your dining experience is pleasant and caters to your dining needs, which is a lot of work (for those who have never served). 

I personally feel that if I'm going to a place like Five Guys I probably won't tip at all, unless there is something special about the service like someone behind the counter who remembers who I am and what I like to order. They are making at least $15/hr (in my area they make $17/hr) and they don't provide any other direct services other than taking my order and calling my number when it's ready. Some may say, "well they are cleaning the dining room, taking out the trash and keeping things stocked." - Yes, but they are also being paid $17/hr to do those tasks, so any tips are bonus to them. I've noticed since the minimum wage jumped to $15/hr a lot more places in the Quick Service sector have begun asking for tips to off-set their labor cost. You going to tip your typical McDonald's worker who can't even get your drink right, even though it's automated now?

[cherimoya]

And what is this obsession with food? We don't tip cashiers at the hardware store. There's something fishy about the restaurant industry. Why did the restaurant owners in particular get to pay waitresses $2 an hour? Why was the public expected to subsidize that industry? Things that make ya go hmm...🤔

[HairByBobby]

It was established so restaurants could “hire” people of color and not pay them. The customers paid them. History is ugly. It’s basically the same thing now. Many places guarantee a pay of $(certain amount) if tips don’t hit that amount. It’s a wonder why they ask for such high tip %!

[cherimoya]

Eh...I live in an area where the minimum wage is $15 an hour. Also, why only restaurants and not other industries?

[Smithward]

The cashier at the hardware store typically interacts with the customer for a few moments, and usually performs only the most basic tasks.

Floor staff at a restaurant take care of a customer over several hours, catering to their every need and are a vital part of the entire experience.

That is why tips are more appropriate in hospitality. No conspiracy 😘

[GrahamB]

As another Aussie I disagree.  Doctors & Dentists don't get tips but they provideconsiderable & very personal service. And I wouldn'tdream oftipping someone who helpedme with a clothes  or refrigerator purchase so what makes food & drinks special?

Restaurant owners should pay their staff a proper wage and not expect customers to make up for pitiful wages...

And yes, I rarely tip but that is the norm here in Australia...

[VanKalkerFarms]

I've thought someone in government must have owned restaurants when creating labor laws.  I don't understand how 1 segment of business gets to pay $1-$4 an hour to an employee and make the customer pay the wage for their staff.  I would say more than half my staff in a garden center will spend more than 15 minutes directly talking to a customer advising them on what plants to use where and how to plant and what to use, walking them around the over an acre facility, etc, so they are spending more time than the wait staff does at a typical restaurant but they get $20 an hour and no tip is even considered as an option for going above and beyond identifying a pic they took of their neighbors pot from 150' away zoomed in.  It is just weird.

So yes it would be insanely beneficial to me to not have to spend almost a half million a year paying my awesome employees between $18 and $25 to work in the garden center but that isn't how it works because of however it became normal to separate wait staff from all other jobs. 

I know many a waitress friends of mine that definitely don't want it to change as they make way way more money on tips than they would at $15 an hour wage.  My sister was a waitress for 7 years and averaged over $40 an hour at a casual fast restaurant in the 90s-2000s.  So it is complicated as the customers are getting worn out on tipping but since that is they way it has always been many wait staff don't want it to change.  Now maybe a waiter in the tiny town that has 500 people might want a real minimum wage since they only get $10 an hour in tips.  

Now I have never been into a Starbucks in my life but I also wonder why they get tipped as they are getting $18 average wage.  Just seems weird.

[EyeCandyGallery]

Tipping has gotten out of control and has become an expectation instead of a method of thanking people for stellar service.

For example, when I go to Panera Bread to pick up an order (that I placed on my phone via their app and walked into their store to retrieve) I am prompted to leave a tip. The folks making my order are PAID to make my order....period. They put it in a bag. Wow.  That doesn't constitute a tip-worthy interaction in my book.  I received absolutely ZERO interaction from a human being. Nothing of value was added to my transaction. 

The rampant EXPECTATION of receiving a tip because someone performed the minimum basic requirements of their job is driving the backlash. 

At least do something to engage and wow your customer if you want to get tipped.

[geminirose]

I haven't ever really considered a tipping option for my jewelry, I guess I have always associated typing with a service provided because tipping usually is left as a gratuity for a service that was above expected.

I also do food service delivery to help subsidize for while my jewelry business takes off and have noticed a big change in tipping. I have seen that a little above half of my clients tip on average though on some days even less then that will tip, so a good percentage of deliveries with be for about $2.25 ea and that can lead to a $20 day, so that is something that I am having to move away from and put much more effort in getting business established in an online presence.

[Bronze_Palms]

We are primarily service-based so most clients do tip. I do try to protect customers by educating staff on the fact that, even retail sales, will prompt a tip because that is just the way our registers are set up; instead I ask staff to request the credit card instead of having clients tap or insert it themselves. This way, clients don't feel inclined to have to tip on non-service purchases (retail, packages, etc).