The Rise of 'Tip Creep' and 'Tip Fatigue' Among Consumers Post-Pandemic

Recent surveys have revealed a shift in the tipping culture, with consumers experiencing what is known as "tip fatigue" and are becoming increasingly reluctant to tip for a wider range of services. This phenomenon, termed "tip creep," has given rise to a perception of tipping being omnipresent.

Consumer Sentiment

A recent WalletHub survey indicates that nearly 3 in 4 Americans believe that tipping has spiraled out of control, particularly with the emergence of predetermined point-of-sale tipping options. This negative sentiment is a stark increase from less than a year ago, as reported by Bankrate.

Tim Self, an assistant professor of hospitality, pointed out that the pressure to tip has intensified, leading to what is now referred to as "guilt tipping". This is especially evident in payment prompts with predetermined options ranging between 15% and 35%, which often triggers feelings of obligation.

Consumer Choice and Financial Impact

Self emphasized that tipping is ultimately a discretionary choice, and consumers should feel comfortable declining when necessary. The inflation, shrinkflation, and tipflation are collectively impacting consumers, leading to financial strain at every turn, according to Alex Skijus, CEO and founder of True Life Wealth Management in Tampa, Florida.

He further stated that consumers often succumb to tipping out of guilt, irrespective of their income levels. Skijus advised consumers to recognize when genuine gratitude calls for a tip, yet refrain from tipping at every single point of sale, and to stand firm in their decision. This approach, he believes, will prompt business owners to reevaluate suggested tip amounts or eliminate tip prompts entirely.

Shifting Trends in Tipping

Based on Toast's most recent restaurant trends report, tipping percentages at full-service restaurants and quick-service establishments have witnessed a decline in the fourth quarter of 2023, compared to five years prior. At full-service restaurants, the average tip left on a credit card or digital payment decreased to 19.4% from 19.5% in 2018. Similarly, tips at quick-service restaurants dropped to 16% from 16.6% over the same period.