• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick From coffee shops to retail, Americans are tired of automated tip prompts everywhere
Editor's Pick

From coffee shops to retail, Americans are tired of automated tip prompts everywhere

by November 17, 2023
by November 17, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

“Add a tip?”

The prompts have become ubiquitous in all kinds of sales situations — from ordering a coffee to paying for a packaged sandwich — as digital card readers proliferate. But while automated requests for gratuities continue to spur confusion and grumbling, recent data suggests consumers have no trouble breezing past them.

Many people first started noticing so-called tipflation as the economy emerged from the pandemic. Venturing out again to bars, restaurants and shops, consumers were confronted with what felt like a new set of etiquette expectations — and duly began tipping more often, even as many griped loudly about it. But those upticks were modest and far from universal, and some of shoppers’ generosity now looks to be waning.

In a survey released this month by the Pew Research Center, 72% of American adults said tipping is now expected in more places than it was five years ago — but that’s pretty much all consumers can agree on when it comes to tipping.

Many dislike it when the tablets they’re presented suggest specific gratuity amounts; 40% oppose the prompts, while just 24% favor them, according to Pew.

But when consumers are left to their own devices, they take widely different approaches to deciding how much extra to offer and when to offer it, if at all. While 78% of respondents told Pew they always or often tip for haircuts, just 61% said the same of tipping their taxi or ride-hailing drivers. And only 1 in 4 reported frequently tipping baristas.

Americans can’t even agree on whether adding a tip is more of a choice or an obligation: 21% see it the first way and 29% the latter, with the remaining 49% landing somewhere in the squishy middle, saying it depends on the situation.

There’s just too many prompts now in the marketplace with these automated payment systems.

Deidre Popovich, Texas Tech University

It’s no surprise consumers are so divided and exasperated, said Deidre Popovich, a Texas Tech University professor of marketing and supply chain management who specializes in consumer behavior.

“I think there’s just too many prompts now in the marketplace with these automated payment systems,” she said. “We’re used to tipping when we can evaluate the service, and in a lot of these situations, there’s no service tied to the tip. What do we do?”

There has been some movement at the margins of Americans’ gratuity habits.

NBC News reported in February that tipping frequency was up, possibly reflecting a pandemic hangover of good vibes toward service workers when expanding point-of-sale systems made it easier for businesses to solicit tips.

The payments processor Square, which makes a popular point-of-sale platform, said the restaurant and retail workers who use its software have seen increases in tipped and overtime earnings. But the company noted that the rises have tracked broader wage increases and higher restaurant menu prices.

“We’ve definitely observed a slight increase in tipping over the last few years,” said Ara Kharazian, the research lead at Square. “But I think it’s a lot more modest than people realize, and it’s starting to slow down a lot.”

For example, the average overall earnings for restaurant workers using Square were $17.67 an hour in October, with a base wage of $13.80. That $3.87 difference, which mostly reflects tips, is only about 60 cents higher than it was in October 2021, according to the company’s payroll index.

As consumers get used to seeing tip prompts in more places more regularly, they may be getting more comfortable ignoring them — especially after having dealt with inflation-related sticker shock for many goods and services over the past year.

We’ve definitely observed a slight increase in tipping over the last few years, but I think it’s a lot more modest than people realize.

Ara Kharazian, research lead at Square

Lightspeed, another POS provider, said customers add tips on just 1.3% of in-store transactions at the retailers that have enabled its tipping feature.

While tip levels in some settings have held steady or inched higher, others are declining.

Lightspeed said the median tip at all types of restaurants using its service increased from 16.9% in the second quarter last year to 17.3% in the same period this year. But tip amounts for online orders and delivery — for which patrons can decide privately whether to tip, without service workers nearby — have dipped since last year, from about 8.8% to 8.1%.

Another point-of-sale platform, Toast, said in September that average tips at full-service restaurants declined from 19.7% in the first quarter this year to 19.4% in the second — the lowest level for that category since the start of the pandemic. Gratuities at quick-service restaurants using Toast barely ticked up to 16.1% from 16.0% over the same period.

A Bankrate survey this year found tipping frequency has continued a multiyear downslide virtually across the board. The shares of Americans who say they always tip in service transactions from food delivery to hotel housekeeping have steadily shrunk. That’s the case even at sit-down restaurants, where those who reported always tipping their servers fell from 75% in 2021 to 65% this spring.

Some companies are trying other ways to nudge customers to tip. DoorDash wrote in a blog post this month that it was testing an in-app pop-up in the U.S. and Canada to remind users of its delivery service to leave gratuities, lest they risk longer waits.

“Orders with no tip might take longer to get delivered,” the test prompt reads. “Are you sure you want to continue?”

This post appeared first on NBC NEWS
You Might Also Like
  • TNT’s ‘Inside the NBA’ headed for ESPN and ABC after Warner Bros. Discovery settlement
  • Netflix says its ad tier now has 94 million monthly active users
  • UAW president warns new walkouts could happen at any time amid ongoing strike
  • U.S. consumer confidence hits 2-year high — but recession fears linger
Share
0
FacebookTwitterPinterestWhatsapp

previous post
New Jersey Democrat organization that Sen Menendez used to chair endorses Tammy Murphy
next post
Californians Caused Late October Dip (and Rebound)

You may also like

Volkswagen braces for showdown with unions after warning of possible...

September 4, 2024

Burger King targets families through movie partnerships in latest stage...

May 22, 2025

How Volvo landed a cheap Chinese EV on U.S. shores...

April 26, 2024

Netflix hunts for a production partner for its Christmas NFL...

June 17, 2024

Biden administration to require advanced safety tech on all new...

April 30, 2024

Nvidia’s Jensen Huang is ‘dead wrong’ about quantum computers, D-Wave...

January 9, 2025

Disney’s streaming services have begun cracking down on password sharing

February 3, 2024

Top 3 benefits of IoT for healthcare providers

December 13, 2022

‘Stakes are high’ in the Alaska Air flight inquiry, NTSB...

January 8, 2024

Ex-employee charged with stealing $22M from Jacksonville Jaguars for luxury...

December 8, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Nike pushes back Skims launch with Kim Kardashian due to production delays

      June 19, 2025
    • The Fed Is Getting It Wrong AGAIN As They Hold Rates Steady

      June 19, 2025
    • DOJ seizes record $225 million in crypto tied to global ‘pig butchering’ scams

      June 19, 2025
    • Feeling Unsure About the Stock Market’s Next Move? These Charts Can Help

      June 18, 2025
    • Amazon expects to cut corporate jobs as it relies more on AI

      June 18, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,599 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,874 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,577 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,541 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,416 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,140)
    • Investing (538)
    • Stock (2,620)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Nike pushes back Skims launch with Kim Kardashian due to...

      June 19, 2025
    • The Fed Is Getting It Wrong AGAIN As They Hold...

      June 19, 2025
    • DOJ seizes record $225 million in crypto tied to global...

      June 19, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,140)
    • Investing (538)
    • Stock (2,620)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Amazon to lay off 9,000 more...

    March 23, 2023

    Star real estate agents Alexander brothers...

    December 12, 2024

    Southwest fined $140 million over 2022...

    December 18, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here