At Sweetly Bakery & Cafe in Battle Ground, Washington, near Portland, Oregon, customers seem to be feeling a little less generous lately.
With inflation near all-time highs and consumers becoming more strapped for cash, a tip isn’t what it used to be.
“Since everything became more expensive, we’ve seen a decrease in tips,” said Sweetly’s owner, Irina Sirotkina.
The Sweetly Bakery and Cafe in Battleground, Washington
Source: Irina Sirotkina
‘The tip at the point of sale is what people resist the most’
Although many Americans said they would tip more than usual once business resumes after the Covid pandemic, consumer habits haven’t changed much in the end.
Giving a 20% tip at a table-service restaurant is still the standard, etiquette experts say. But there is less consensus when it comes to a coffee to go or a snack to go.
Overall, tips have been largely flat at quick-service restaurants, according to Toast’s most recent restaurant trends report. Tips average 17%, almost unchanged from a year ago.
But when it comes to takeout, customers tip less, now as much as 14.5%, on average, after rising earlier in the pandemic, the restaurant software provider found.
Other payment software providers have also reported that these types of tips have decreased over the past year. For example, Toast rival Square found that the average tip at quick-service restaurants, which includes coffee shops and cafes, fell from 17.2% to 15.2% from March 2021 to the end of February, according to a The Wall Street report. Daily.
Part of this is tip fatigue.
eric plam
founder and CEO of Uptip
“Part of it is tipping fatigue,” said Eric Plam, founder and CEO of San Francisco-based startup Uptip, whose goal is to make cashless tipping easier.
“During Covid, everyone was shocked and feeling generous,” Plam said. Now, “you’re starting to see people backing off a little bit,” he noted, particularly when it comes to tipping at the point of sale, which leads customers to tip before they’ve even received the product or service.
“This tip at the point of sale is what people resist the most,” he said, “forcing you to tip right there.”
Service workers rely on tips to boost wages
However, transactions are increasingly being conducted without cash and service industry workers earn minimum wage or less than minimum wage, so having a method of tipping is critical, Plam added.
In fact, the average wage for fast food and counter workers is $14.34 an hour for full-time staff and $12.14 for part-time employees, including tips, according to the most recent data from the US Bureau of Labor Statistics
A landmark bill in California aims to raise the minimum wage up to $22 an hour for fast food and quick service workers at chains with more than 100 locations nationwide. California’s current wage floor is $15.50 per hour.
President Joe Biden and many Democratic lawmakers have pushed for a minimum wage of $15 per hour across the US. The current federal minimum wage is $7.25 per hour and has not changed since 2009.
“We’re understanding, but it doesn’t feel right,” Plam said of point-of-sale tipping. “Now that the pandemic is essentially over, it’s starting to shake out now,” he added. “The good news is that we are reconsidering it.”
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