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"Businesses React to Growing Concerns: Tipping Culture under Scrutiny as Americans Question its Control"

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Tipping Fatigue: Americans Resent Increasing Prompt for Tips

Tipping Culture Becomes Overwhelming

According to a recent report by Bankrate, two-thirds of Americans have a negative view about tipping, particularly when it comes to contactless and digital payment prompts. These prompts often have pre-determined options that can range between 15% and 35% for each transaction. The constant pressure to tip has caused what experts refer to as "tip fatigue," leading many consumers to start tipping less.

Tip Gallop Instead of Tip Creep

Michael Lynn, a professor of consumer behavior and marketing at Cornell University, described the situation as "tip gallop" rather than "tip creep." Many consumers feel irritated and overwhelmed by the increasing number of opportunities to tip. The technology behind payment systems makes it harder to say no and tip a small amount.

Scaling Back to Appease Customers

As negative sentiment towards tipping grows, more business owners are considering scaling back on suggested tip amounts or eliminating tip prompts entirely. According to Molly Burke, a senior analyst at Capterra, small businesses have the option to customize the tip screen or deactivate it altogether. Matt Vizcaino, owner of Tortugas Homemade Pizza in Birmingham, Alabama, decided to forgo tipping prompts in his establishment after seeing the frustrations of customers.

Etiquette and Consensus on Tipping

Etiquette experts still recommend tipping 20% at sit-down restaurants, but there is less consensus about gratuity for carryout or other transactions without traditional tipping expectations. Expert Michael Lynn mentioned that he only tips out of obligation at restaurants, while in other situations, tipping is more of a reward for good service. Jaime Peters, assistant dean of accounting, finance, and economics at Maryville University, emphasized that tipping is not obligatory and individuals should feel free to choose whether or not to tip.

Tipping Fatigue: Americans Resent Increasing Prompt for Tips


Conclusion: Tread Carefully as a New Business in the Tipping Culture

The growing tipping fatigue among Americans can have significant implications for new businesses entering the market. While tipping has long been a part of American culture, the negative sentiment and overwhelming pressure to tip are leading to decreased gratuities from consumers. As a business owner, it is crucial to understand and navigate this landscape to ensure customer satisfaction and financial success. One approach for new businesses is to carefully consider the impact of tip prompts on their customers. By scaling back on suggested tip amounts or even removing tip prompts entirely, businesses can avoid adding to the tipping fatigue experienced by consumers. Customizing the tip screen or deactivating it altogether, as suggested by experts, may be a strategic choice to meet customer preferences. However, it is important to remember that tipping etiquette can differ across various industries. While sit-down restaurants still expect a 20% tip, other situations, such as carryout or non-traditional tipping scenarios, lack a consensus. Future business owners should familiarize themselves with the prevailing norms and expectations in their specific industry to ensure they align with customer expectations. Ultimately, the decision to tip or not should be at the discretion of the consumer. It is essential for new businesses to respect this freedom of choice and provide exceptional service to inspire voluntary gratuity rather than relying solely on tipping prompts. By creating a positive and rewarding experience for customers, businesses can build loyalty and support, regardless of the tipping culture's evolving landscape. Article First Published at: https://www.cnbc.com/2023/07/05/tipping-culture-is-out-of-control-even-some-businesses-agree.html

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