Read here the full transcript of Thomas Farley’s talk titled “Has Tipping Culture Gone Too Far?” at TEDxBronxvilleHS 2024 conference.
Listen to the audio version here:
TRANSCRIPT:
The Rise of Tipflation
Picture the scene. You’re at the eye doctor, seated in the examination room, straining to read the projected letters on the wall opposite you. R-Z-Q-L-X. “Very good,” the optometrist says.
“How about the next line?” T-I-P? Tip? 20%? 25%? 30%? “Excellent! And how about the final line?”
“Oh gosh, it’s so small, I don’t think I can read it. Can I try it with both eyes? Okay, I think it says… no tip?”
It doesn’t take a visit to the optometrist to realize many of us have been rubbing our eyes in disbelief when it comes to the profusion of tipping opportunities in all aspects of our daily lives.
The Tipping Point
Suddenly, it seems you cannot purchase a bag of potato chips at a convenience store, a muffin at a bakery, or a water at the local sandwich shop without being prompted to tip, sometimes as much as 30%. And in sit-down restaurants, even a table of one or two may see a 20% line item described as a service charge, after which we are still given the opportunity to leave a tip, which apparently is no longer the same thing as a service charge.
This recently happened to me at a restaurant in Denver, and I left the eatery having paid 40% above and beyond the cost of my food. Consumers are feeling confused and imposed upon.
Was I supposed to be doing this all along, and I just didn’t know it? Why am I tipping a cashier when all he did was scan a candy bar wrapper? Am I a cheapskate if I hit “no tip”? And will the clerk give me a dirty look?
The Etiquette Expert’s Perspective
I’m Thomas Farley, an etiquette expert known in the media as Mr.
Manners. I speak to TV audiences of all types on topics from what not to wear to the company beach outing to how to ensure your guests know it’s really time to leave when the party is over. But this topic, the uniquely American societal trend where we are suddenly tipping for everything, everywhere, all at once, has positively dominated my time in the media this year.
Already feeling the pinch of inflation, consumers across the country are wondering how this all started and if it will ever end.
The History of Tipping in America
The tradition of tipping in the United States has origins that are not entirely commendable. Following the Civil War, wealthy Americans would show their status by showering service workers with a tip for which they were expected to be exceedingly grateful. Wages for women and newly freed slaves were kept appallingly low.
The supposed silver lining of this was the tips themselves, often comprising the bulk of their compensation, albeit still a pittance. By the 20th century, as the middle class began to grow and consumers with discretionary income began to travel, go out for meals, see hairstylists, and pop into cocktail bars, Americans grew accustomed to giving tips for good service.
The amounts were small at first, often measurable in cents, but by the 1950s, 10 percent was considered a good tip. The racial and gender-based reasons for tipping began to fade from memory as the practice became more established.
The Evolution of Tipping
In subsequent decades, the percentage society deemed an appropriate amount for a baseline tip started to nudge upward, first up to 15 percent and rising to just under 20 percent nationwide today. That gradual increase in the amount we tip is referred to as “tip creep.”
By the 2010s, with many consumers paying for even small purchases with plastic, what was once a clumsy transaction (remember credit card imprinting machines?) evolved. And then we were swiping, inserting a chip, and finally tapping to pay.
As that all happened, many of us stopped carrying much, if any, cash in our wallets, which did not bode well for the DIY tip jar. Long a presence at ice cream shops, bakeries, coffee houses, and pizza parlors, labeled with humorous sayings such as, “If you fear change, leave it,” and “There’s a party in this jar and your money is invited,” these tip jars appealed to our sense of humor and to our kinder natures. We would casually drop in a dollar or two, often the change from our purchases.
The Digital Tipping Revolution
But paying by credit card meant no change at all. And if we had none already in our wallets, no extra dollars to show our appreciation for a college student scooping ice cream from a petrified cardboard tub or display appreciation for the baristas who created all manner of designs in the froth of our steam-to-perfection cappuccinos.
A couple of years before the pandemic, consumers began to see tablets appearing at checkout counters, the latest round of tech to make paying for goods and services quicker and more efficient. And yet, little by little, these tablets began prompting us for a little extra.
First, in the bigger cities across the country and primarily in establishments like independent coffee shops, we were given the opportunity to show the love with a touch screen tap. No math and no fishing for spare change required.
The Pandemic Effect
As our world shut down in 2020, we became reliant on food delivery apps to put meals on our tables. Recognizing the vital roles these frontline workers played to bring us that food, not to mention our eagerness to help local restaurants stay in business, we ordered in often and tipped generously, well above even our normal averages.
And yet, in 2021 and 2022, as the country began to regain its footing, consumers noticed something had definitely changed. Tip requests were everywhere. Consumers, perplexed though they were, largely complied. The trend acquired a name: tipflation, the perfect portmanteau of tipping and inflation.
It’s a rapid shift that in recent months has seen shoppers on Amazon being asked if they would like to tip the person who will pack their order. Music lovers at concerts are being asked to tip the person who hands them a high-priced T-shirt. Apple employees in Baltimore are requesting the ability to accept tips as part of their labor negotiations. Starbucks finally caved in and added a digital tip option at checkout.
And in the latest trend, self-serve kiosks in airports are asking travelers to pay a tip as they place their order on a screen. Exactly how and to whom this money is going is not entirely clear.
A recent Forbes study indicates that 32 percent of us are tipping more than we did before the pandemic, and that nearly three-quarters of us tip more, up to 15 percent more, when we pay with a digital payment rather than with cash.
The Future of Tipping
So, where do we go from here? Are we rapidly advancing to become a society that tips for every service we receive? Will we soon be tipping our dental hygienists, our auto mechanics, our flight attendants, and yes, our eye doctors?
Before it comes to this, I think it’s vital that we as a country take a serious look at how we pay workers in the service economy. The federal minimum wage is a mere $7.25 an hour. This is a level it’s been at since 2009. Excluding customer gratuities, traditionally tipped workers, such as servers in a sit-down restaurant, are often paid little more than $2 an hour by their employers. Only through tips do their wages reach or surpass the actual minimum wage.
This system of elevating the hourly wages of service workers by means of customer tips is known as the tipped minimum wage, a compensation arrangement that varies from state to state.
Attempts at Change
Some have tried to shift the way the restaurant industry compensates servers. Danny Meyer, the famed New York restaurateur behind eateries from the five-star Gramercy Tavern to the ubiquitous Shake Shack, tried eliminating tipping for servers in 2015, shifting to a model he called “hospitality included.” Menu prices were raised 21%, and wages for service staff were rebalanced accordingly.
Many servers were not thrilled with the change, even as a low minimum wage job can easily become a very comfortable living if you work in a high-volume or high-priced establishment.
Ultimately, the experiment failed, a victim of staff pushback, worker departures, and the shutdowns caused by the pandemic.
The Business Perspective
For quick-serve restaurants whose counter-employees and back-of-house team members do make minimum wage, even before tips, owners maintain that the credit card processing fees tighten their margins and food costs are skyrocketing at the same time the labor pool is tightening. The only way to make ends meet, they say, not to mention being a proven way to attract and retain workers, is to offer a share of the extra revenue brought in through customer tips.
Thanks to software platforms such as Toast, Square, and Clover, business owners have a sleek, easy, and proven way of further compensating their staff without digging into their own pockets, even in sectors where customers are not accustomed to giving tips.
Consumer Reactions
While some customers have accepted the everything, everywhere, all-at-once nature of tipping in post-pandemic America, a large portion are feeling taken advantage of and are opting out, either by frequenting establishments that don’t charge a tip, paying for their goods in cash so they can avoid the tablet altogether, or by simply hitting “no tip.”
A Call for Change
Will all service transactions soon require something extra? “I smile, therefore you tip.” We are rapidly approaching that reality, and it concerns me.
Installing tipping software is easy to do. Removing this perk after it has already proven popular with staff, not to mention improving a business’s bottom line, not so much.
So here’s a tip from Mr. Manners: Let’s save the tipping for servers in our restaurants, our hairstylists and massage therapists, hotel housekeepers, and other traditionally-tipped professions. For other workers, such as those scanning a barcode as opposed to balancing a large tray of food across a dining room and perfectly landing it beside a hungry table of six, their employers have a unique opportunity right now to buck the trend, to be the establishment that pays its team members well and, where needed, increases the cost of menu items.
This is what consumers are asking for. “Just raise prices,” they say, “and end this awkward guilt tipping.”
For the time being, at least, tips at quick-serve counters and for Amazon orders are optional, not mandatory. It’s wonderful to be generous, if the spirit moves you and your means allow. It’s also entirely okay in those situations to hit “no tip.”
Let’s reverse the tide of tipflation and the tipping invasion and restore and sustain a culture of service for service’s sake.
Otherwise, it may not be long before even TED speakers are asking for tips. Thank you.
