If you still leave larger tips for waiters and other service workers than you did before the Covid-19 pandemic, you are now in the minority.
In most cases, Americans now say they tip less often than before the pandemic and less often than in 2019 before the pandemic began. That’s according to data released Monday by the personal finance website CreditCards.com, which surveyed 2,610 American adults about their tipping habits last month.
The percentage of respondents who said they always tip at a sit-down restaurant is now 73%, up from 77% in 2019. Similarly, 57% of respondents said they always tip the delivery person, up from 63% in 2019. And just 43% say they always tip taxi or rideshare drivers, down from 49% in 2019.
Those declines stand out especially in contrast to mid-2020, when most Americans said they were inclined to reward service workers, such as waiters, food deliverers and taxi or Uber drivers, many of whom lost wages in the height of the pandemic and facing increased risk of exposure to the coronavirus due to the nature of their jobs.
But Americans’ plans to become more generous with tips can now be seen as a case of “best laid plans” not coming to fruition, says Ted Rossman, senior industry analyst at financial services company Bankrate, which owns CreditCard. .com. “Sometimes what people say and what they do is different.”
Rossman identifies rising inflation as “something that is cutting into people’s purchasing power and perhaps leading them to tip less.” With the cost of living rising in the US, people may be more inclined to spend less. And when restaurants raise prices to compensate for supply chain difficulties, consumers might try to cut those costs by tipping less, Rossman says.
The country’s ongoing labor shortage could also play a role: Understaffed businesses often face big challenges in providing quality service, though Rossman writes that theory off as “further hypotheses.”
A potential economic downturn within the next year could deplete Americans’ tipping practices, but Rossman notes there’s still a lot of pent-up demand for travel and dining after years of the pandemic putting people’s plans on hold. And if people are willing to spend on food and entertainment during a recession, service workers are likely to be tipped in the process, she says.
Interestingly, according to CreditCard.com’s findings, a specific group of service workers actually receive more tips now than they did in 2019: barbers and hairdressers. Rossman suggests it could be down to people’s familiarity with their barbers and hairdressers, a relationship that develops less frequently with waiters, delivery men and other service workers.
The findings also revealed some notable tipping habits of Generation Z, soon to become the most populous generation in the world. On average, only 52% of Gen Z respondents said they always tip at table-service restaurants. But those who tip do so largely, at an average rate of 26% of their bill, significantly higher than the report’s median percentage of 20%.
Rossman says that Gen Z respondents are the age group most likely to tip better after receiving a tip suggestion from an establishment, such as a digital prompt to choose a tip percentage on a checkout screen.
That might help explain the generation’s boom-or-bust approach to tipping: “There’s this kind of implicit social pressure there,” says Rossman.
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Source: www.cnbc.com