When was the last time you bought something and they didn’t ask you for a tip?
Not only are tip requests on purchased goods and services becoming more common, but the amount of the traditional tip has also been on the rise for decades.
During the 1950s, people used to tip 10% of the bill. By the 1970s and 1980s, that percentage had jumped to 15%.
In 2023, people typically tip between 15% and 25%. Consumers on average said they tipped more than 21%, according to a creditcards.com survey in May 2022.
“What we’re seeing now across the country is something known as ‘typflation’ … at every opportunity we’re presented with a tablet asking how much we’d like to tip,” said etiquette expert Thomas Farley, also known as “Mr. Manners.”
The coronavirus pandemic put more upward pressure on tips. During the height of those days, consumers began tipping for things they had never received before for workers in the service industry.
In February 2020, just before the pandemic began, in food and beverage specifically, the share of remote transactions when tips were offered was 43.4%, according to Square. In February 2023, that share was 74.5%.
In the meantime, if people were willing to tip their delivery person 30% for service, why not ask them if they’d like to leave a tip when they come to pick you up? Restaurants started doing it more frequently, and that practice hasn’t abated.
Another reason people are tipping more is because of the newest and most compelling technologies: kiosks and tablets with three big tip suggestions appearing on the screen in front of you. Business owners typically choose those options and can also disable the feature if they wish.
To that point, 22% of respondents said that when presented with various suggested tip amounts, they feel pressured to tip more than normal, according to Creditcards.com.
“They use those options as an indication of what the normative range is and feel compelled to tip within that range. So the more you ask, the more you get,” said Mike Lynn, a professor of consumer behavior and marketing at the School of Cornell University. of Hotel Administration.
The three standout companies with that sleek modern look are Square, Toast, and Clover. The companies were launched about a decade ago to help businesses run smarter, faster, and easier.
In some cases, they charge fewer fees, so it’s less of a hassle to accept multiple credit cards, don’t require long-term contracts, and offer many other useful tools, like inventory and employee management.
“They put credit card processing in the hands of individuals and very small merchants,” said Dave Koning, a senior research analyst at Baird. “Square did a great job … it’s been a tremendous growth story. That’s half of the business today,” he added.
But, with customers tipping more, where is the tipping point?
“I have to believe that tips are going to go up from where they are today. But I also think there has to be a logical ceiling somewhere. I just don’t know where it is,” Lynn said.
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