Is tipping out of control? 'Tipflation' is a real concern: David Bruce
Tipping used to be a fairly simple endeavor. You tipped your server, taxi driver and newspaper carrier.
Now it seems were are getting bombarded with gratuity requests, some in person and even more on those small electronic pads that have popped up at almost every retail counter.
The term economists use is "tipflation." It not only refers to the more common expectation of a tip but the increased percentage being requested.
A recent survey by the Pew Research Center discovered that 72% of U.S. adults say that tipping is expected in more places today than it was five years ago. Only one-third of them say it's very easy to know whether to tip (34%) or how much to tip (33%) for various services.
"What has happened is that we have opened the door to everybody for tipping," said Peter Zohos, dean of Mercyhurst University's School of Business and hospitality expert. "We're tipping the butcher, people at the convenience store, many more people than before the COVID-19 pandemic. We have normalized tipping."
The standard for tipping, before the pandemic, was 15%-18% for most of the country. It was a little higher in the Midwest and in major eastern cities, like New York and Boston, and a little lower in the southern and western United States, Zohos said.
Once businesses started opening up after the initial months of the pandemic, Zohos said customers were so thrilled to order takeout and shop that they rewarded workers they never previously tipped.
"People were tipping 20% or more during the pandemic, and they were tipping everybody in sight," Zohos said. "And as we went more to cashless transactions, it became so easy to add a tip to your credit card or debit card bill."
Zohos cautioned that the issue is not that restaurant and retail owners are using higher tips to cover costs they have paid in the past.
"Costs for everything in the service industry have increased, and restaurants traditionally have had a very thin profit margin," Zohos said. "In Pennsylvania, once everything is paid, if a restaurant has 3% to 4% of pure profit remaining, they are doing exceptionally well."
How can you avoid 'tipflation'?
Customers generally have three concerns with tipping in the post-pandemic world:
The tip percentage has increased, despite the fact you already are paying a larger tip due to higher costs associated with inflation.
Some online businesses, particularly food delivery services, are asking for a tip ahead of time.
You are sometimes asked to tip for automated services, and they aren't sure what employee is receiving the money.
"We have always tipped at the end of service and now we're asked to pay up front," Zohos said. "The concern is, 'What is my recourse if things don't go well?' Now you feel ripped off."
You do have options, though some choices might limit your access to certain services.
Pay in cash. Using money instead of a credit/debit card eliminates the "tip in advance" issue and some of the awkwardness of selecting "no tip" on the electronic pad.
Of course, the downside is that you can't pay in cash when ordering online. You also need to have cash on hand to make your purchases.
Be selective about when you tip. Just because someone, or something, is asking for a gratuity, you don't have to provide one, Zohos said.
"Certainly tip if you feel the service warrants a tip," said Zohos, who once worked a a busboy. "If your server goes above and beyond, by all means tip generously."
But don't feel ashamed to select "no tip" or simply decline to tip if you feel there is no need for it, he added.
"It's not easy. Sometimes the person is standing there two feet away, looking at you," Zohos said. "But I think this new tipping culture is here to stay."
HERE to HELP: Have a consumer question you'd like us to help you with? Leave a message with David Bruce at 870-1736, send an email to david.bruce@timesnews.com or send mail to 205 W. 12th St., Erie, PA 16534.
This article originally appeared on Erie Times-News: Erie consumers are not immune from 'tipflation': David Bruce
