30 Percent of Americans Say Tipping Culture 'Out of Control'
Many consumers are feeling irritation at being strong-armed into "guilt tipping" in point-of-sale transactions.
It's always been standard to tip at sit-down restaurants, for food delivery, at the salon, and so on. But in recent years—and particularly, since the pandemic—more Americans are feeling the squeeze in situations such as point-of-sale transactions and at the drive thru. Even tipping your landlord became a topic of controversy earlier this year.
According to a recent survey by the consumer financial services company Bankrate, 30 percent of Americans unsurprisingly think that tipping culture has gotten "out of control."
Whereas a tip jar used to be the standard at most casual businesses, 32 percent of respondents expressed annoyance when it comes to pre-entered tip screens, which forces consumers to go out of their way not to tip.
As such, Lyn James, the owner of a Bowman, ND coffee shop, told CNBC that she opted out of a tip screen when implementing her store's contactless point-of-sale system, and that most people will still tip about a dollar for a latte regardless. "Honestly, I think the prompt irritates most people," she said. "If the customer is happy, they are generous with their tips."
Shake Shack founder Danny Meyer, who famously did away with tipping in lieu of a "Hospitality Included" compensation model in 2015, only to reverse course in the wake of the pandemic, likewise told CNBC's Squawk Box why he doesn't agree with so-called "guilt tipping" this week.
While Meyer thinks that employees should be paid a fair wage and people should always tip for good service, even he feels that there are some instances where tipping isn't necessary. "If you’re just taking out food, and it was just a transaction—I give you money, you give me a cup of coffee—I don’t think there’s any obligation to tip whatsoever," he explained.
However, it should be noted that the standard tip at sit-down restaurants is still 20 percent, as tipped employees make less than the federal minimum wage. The same goes for many gig employees who also often make less than minimum wage, and report poor working conditions and low wages to boot.
If ever in doubt of when and how much to tip, thankfully there are plenty of online resources to help sort through the confusion.