The amount Canadians are asked to tip when paying with credit or debit cards is rising, according to industry watchers, and it could be encouraging Canadians to be more generous with tips.
A survey conducted by Restaurants Canada in April 2022 found that when dining at a table-service restaurant, 44 per cent of 1,500 Canadians surveyed said their tips are higher compared to before the COVID-19 pandemic.
Suggested tipping is also on the rise, according to CBC Calgary restaurant critic Elizabeth Carson, who noted that prompts on credit card machines that previously called for 10 to 20 percent tips have now slipped to 18, 20 percent. or 25 percent.
Carson has also been asked to tip up to 30 percent, and said he finds the higher notices annoying. It’s leading to a general feeling that could be called tip bloat.
This POS terminal at a Toronto restaurant asks for tips ranging from 18 to 30 percent by default. (Anis Heydari/CBC)
“Because food and wages cost more, the bill is now 10 percent higher than it used to be. So it still amounts to a very large tip because the bill is very high,” Carson said.
The restaurant critic, who typically eats out three to six times a week, began noticing this trend during the first COVID-19 lockdown.
“Restaurants couldn’t do anything other than takeout. People felt really bad for restaurant workers, so people were leaving much higher percentages than the suggested tip levels,” Carson said.
Carson suggested that restaurants noticed customers were willing to tip more, so they started asking for more.
How your choices are formed
While a customer’s choice can feel like their own, decisions like how much to tip can be influenced by a theory called “choice architecture,” or how options are presented to us.
Simon Pek of the Gustavson School of Business at the University of Victoria explores these influences in his research on tipping practices.
If those numbers are higher, it makes us think that a higher tip is more appropriate.– Simon Pek, Associate Professor, University of Victoria
Preset options for a tip at the end of your restaurant transaction are an example of choice architecture, according to Pek.
“When you see the POS device, the message being sent to you is that tipping is expected or is the norm in this particular context,” he said.
Simon Pek researches tipping at the University of Victoria and has said that when higher tip percentages are introduced, customers may feel they should tip more. (UVic photographic services)
“The first number you see, or the range you see in front of you, influences people’s decisions and perceptions of what is the right advice to do in that particular context.”
“So if those numbers are higher, it makes us think that a higher tip is more appropriate in this context.”
It’s unclear how often 30 percent tips happen
Fintech companies like Square or Moneris don’t share data on how often Canadians choose the 30 percent tip option.
However, Square confirmed that it is up to sellers and retailers to enable and customize tipping settings on POS terminals.
Some restaurateurs have said that increasing tipping options for patrons paying by debit or credit card could backfire, including Jacquie Titherington, a waitress and manager at Blue Star Diner in Calgary.
“I feel like he’s pushing something that’s not necessarily going to work in favor of the employees because I think when people see that, they might get a little bummed out because it seems excessive,” said Titherington, who is 26. of experience in the restaurant industry.
Zoe Smith, who recently left her pub job in Victoria to go on a road trip, says she can’t afford to tip 30 per cent when she dines out, so she doesn’t expect customers to either.
“I think when I do a good job, I don’t expect more than 18 percent. And if I get more than that, I’m happy and grateful, but… we’re all fighting here, like everyone is trying.” to make ends meet,” Smith said.
Between July 2020 and July 2022, Square tracked the amount Canadians tip for in-person transactions. The average tip hovered around 17% nationally, 1% more than before the pandemic.
Provincially, British Columbians left the lowest tips: an average of 16.7 percent, compared to Newfoundlanders, who were Canada’s top tippers according to Square data, with a tip average 18.6 percent.
Tip distribution may vary by province
In Canada, both the employee and the employer can control the distribution of tips.
In restaurants where waiters collect all tips from customers, they will often pass a percentage of those earnings on to their co-workers, such as hosts and hostesses, busboys, dishwashers, and cooks.
When tips are controlled by the employer, they can be pooled and distributed to staff through a tip-sharing agreement established in an employment contract.
It’s up to sellers to enable and customize tipping settings on point-of-sale terminals, according to financial technology company Square. (Danielle Nerman/CBC)
In some cases, restaurant owners are included in this arrangement and take what is called court of the house. However, this practice is illegal in Ontario, Quebec, and New Brunswick and is a gray area in many other jurisdictions, including Alberta.
When Sean Gandossi worked at a pizza takeout counter in Calgary, he never saw any of his tips.
“We had a gratuity option at the [point-of-sale] machine there… and we made a lot of money on tips, like some nights it was over $1,000, but none of that money went to us,” Gandossi said.
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The owners told him they reinvested those tips in the business and Gandossi, who was 17 at the time, did not dispute the arrangement because he made $17.50 an hour.
“When you’re a little bit younger too, you know, you think, okay, well, I’m making more than minimum wage … so, you know, I didn’t complain much because I just don’t really know much better,” he told The Cost of Living. from CBC Radio.
Ask who receives your tip, regardless of the percentage
Gandossi said he believes most customers were unaware that their tips went to the restaurant owners and not the staff.
“You’re the one giving them the machine, right? You’re the only one causing the tip selection or the tip option,” Gandossi said.
Tips you give restaurant staff through point-of-sale machines like this one don’t always have to reach the restaurant staff, former servers say. (Steve Bruce/CBC)
“It’s like when you have a tip jar. You’re going to assume that if you put money in the tip jar, the person you see is going to be the one getting the tips.”
Experts like tip researcher Simon Pek say that if a customer wants to know where their tip is going, they should ask.
Source: www.cbc.ca