How consumers are choosing to fight back against ‘guilt tipping’ shame

Electronic payment machines – which require customers to choose an amount on a large screen in front of a server to tip – left Americans paying increasingly large tips.

But now they’re fighting back after the use of the screens – with options often starting at 18 percent and going up to 35 percent – caused average tips to soar.

Average tips for on-site restaurants rose above 20 percent for the first time in 2020 and have continued to hover above that level throughout the pandemic, peaking at nearly 20.5 percent as “tip inflation” continued.

But Americans are now tipping less, according to data from payment processing company Toast. In the last three months of last year, the average tip fell to 19.4 percent.

Three-quarters of Americans believe the tipping culture has gone too far

The latest figures on tipping come after a survey found that Americans are growing tired of digital payment terminals that encourage them to tip more and make a wider range of transactions.

According to a WalletHub survey, nearly three in four Americans think tipping has gotten out of hand.

When adding a tip to a credit card or digital payment, guests at “full-service” restaurants left an average of 19.4 percent in tips in the fourth quarter of 2023, a separate study found. recent report on restaurant trends by Toast.

That’s down from a spike of nearly 20.5 percent during the height of the pandemic and below even the pre-pandemic level of 19.5 percent in 2018.

With the rise of new payment systems, the number of times people tip at ‘quick-service establishments’ such as cafes and fast-food restaurants has also increased.

Between the beginning of 2020 and the end of 2022, the number of people tipping at quick-service restaurants increased by 11 percent to 48 percent.

Professor Michael Lynn, professor of consumer behavior at Cornell University, told DailyMail.com: ‘iPad screens make it harder for customers to say no.

‘Previously, customers would only see a tip jar and could ignore it if they wanted to. But now they have to actively say ‘no’. Many stand in line at a coffee shop and worry about what the man behind them thinks.”

Tim Self, assistant professor of hospitality at Austin Peay State University in Clarksville, Tennessee, told CNBC customers feel like they are tipping in more places.

“Customers are asked to tip at the more traditional service encounters (and) also app-based services, ride sharing and delivery apps,” he said. “This gives the impression that tipping is everywhere, which indeed seems to be the case.”

Many Americans say the rollout of large payment terminals with screens showing suggested tip amounts has made them feel guilty

Not only did that initially drive tips, but the number of recommendations also started to increase. One in three consumers have noticed that tip suggestions are higher than before, according to research from PYMNTS.

While a 20 percent tip in a full-service restaurant is a fairly well-established standard, there is less uncertainty about how much and when to tip in a quick-service restaurant.

Payment data in the report also indicated that tips vary significantly depending on the day of the week.

Customers are said to be most stingy in tipping on Sundays and gradually increase the amounts until Thursday. Tips came down again on Friday and Saturday.

Last year, DailyMail.com revealed that Square, which sells the software and hardware that powers many of this new generation of electronic payment systems, made an eye-watering $3 billion in profits in 2022 alone.

It told NBC News that the frequency of tipping at quick-service restaurants – including coffee shops and fast-food chains – increased by 16 percent in the last quarter of 2022 compared to the same period a year earlier.