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EVERYONE WANTS A TIP NOW. DO YOU HAVE TO GIVE THEM ONE?

Thanks to touchscreens and the pandemic, tipflation is everywhere — and it’s
hard to say no.

By Sara Morrison Oct 7, 2022, 12:30pm EDT


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THIS STORY IS PART OF A GROUP OF STORIES CALLED

Uncovering and explaining how our digital world is changing — and changing us.

Jenny Kivett went to see the band War on Drugs at Colorado’s storied Red Rocks
Amphitheater last month. The show was great. Buying merch, less so: A vendor
prompted her to kick in a 20 percent tip for an $80 purchase.

Casey Schreiner wanted to cut down on plastic use, so he tried Mama & Hapa’s, a
zero-waste store in Portland, Oregon. He located and picked out a few dishwasher
pods and brought them to the cashier, whose tablet register prompted him to
leave a tip.

Erin Browne decided to celebrate fall by taking her kids to pick their own
apples at Fishkill Farms in New York. She made a reservation online and was
asked to leave a tip of between 10 and 20 percent.

None of them expected to be asked to tip and weren’t exactly sure which services
they received merited a gratuity. Kivett and Schreiner were buying non-food
items that didn’t require their cashiers to do much beyond tap on a touchscreen.
Browne and her kids would be picking their own apples (“Does the tip come back
to me for doing my own labor for fun?” she wondered). All three said they
generally want to show their appreciation and leave tips where they’re
traditionally expected. But they hesitated when it came to tipping for things
like retail purchases or online reservations for self-service fruit-picking
sessions. But Kivett and Schreiner ended up leaving tips anyway, partially to
avoid the awkwardness and the guilt of saying no in front of the customer
service worker. Browne didn’t tip, but said she felt a little guilty for not
having done so. She just couldn’t figure out who or what she was being asked to
tip for.

Sometimes it seems as though everywhere you go, you’re asked to chip in a little
something extra, even for things that weren’t tipped services just a few years
ago. Tips are requested at automatic car washes, for Botox treatments, even for
smoothie-making robots, usually through those touchscreen tablets a lot of
businesses use as their point of sale (POS) systems. Thanks to a combination of
technology, social pressure, and a pandemic that accelerated the adoption of
contactless digital payment methods, those tablets have become ubiquitous, and
so have the tip requests. At a time when the prices of many goods and services
are already far higher than they used to be due to inflation, we’re paying even
more again to the workers who provide them.

Call it tipflation, if you will.

It’s hard to say just how bad this tipflation has gotten because there isn’t
much real data to go by. We do know that in the United States, people are
generally asked or expected to tip far more and for more types of services than
anywhere else in the world, so tipflation is going to be especially bad here.

Tipping is a largely underground (and lucrative) economy, especially when those
tips are left in hard-to-track cash. While those digital payment systems give us
a new data source, that data is controlled by the companies that provide them.
Unlike tip-happy customers, they tend to be pretty stingy with the details.

We’re looking for some tips about tips! Do you get tips at your job? Tell us
about it: sara.morrison@recode.net or morrisonsara@protonmail.com.

Square, the market leader in this space, declined to give Recode any data about
tipping on its platform at all, despite collecting plenty of it. Toast, a Square
competitor, does release quarterly data showing the average tips its clients’
customers leave, but Toast’s products are for food services businesses only,
where customers are far more likely to expect to be asked to tip in the first
place.

Michael Lynn, a professor of consumer behavior and marketing at Cornell
University, has studied tipping for decades. He says tablet tipping data is hard
to come by and harder still to compare to whatever pre-tablet tipping data is
out there.

“There are good reasons to believe that these increase tips, but as far as good,
solid, direct data? It just doesn’t exist,” Lynn said. But, he added, there is a
lot of data on how those suggested tips affect the tips customers leave. The
higher those suggested tip amounts are, he says, the higher the overall tip
revenue tends to be.

But those studies don’t help much when you’re on the business end of a
touchscreen tablet asking you to leave a 20 percent tip to someone just for
grabbing a band T-shirt and an album out of a bin. What should you do when the
register spins around and asks for more?


THE DARK PATTERNS THAT PUSH YOU TO PAY

Tipping is supposed to be a reward for excellent service, but studies have shown
that the vast majority of people are motivated more by social pressure. Tipping
is expected of them, and they don’t want to deviate from a long-established norm
— especially if other people are watching and possibly judging them.

Digital POS systems aren’t the only way a business will request tips, but it’s
one of the newest as well as one of the hardest to refuse. Unlike tip jars on a
counter, which are easy to ignore, or writing a tip on a receipt, tip-by-tablet
becomes a public affair. You’re forced to declare your level of generosity or
cheapness to anyone within eyesight, including your server.

“It’s easy to cross the line from honest persuasion to harmful manipulation”

Meng Zhu, a professor at Johns Hopkins who studies consumer decision-making and
marketing, says just the act of asking people to leave a tip can be enough to
push some people into doing so, especially when they’ve already initiated a
business transaction.

“Let’s say you already shopped at a restaurant or coffee shop. You’re already
committed,” she said. “When they ask you for something else, you’re more likely
to comply because you want to be consistent with your earlier decision.”

The tip prompts are also designed to push the customer into not just leaving a
tip, but leaving an amount that the business “suggests.” Businesses can set
those suggested amounts, which is why one place might go with something like 10
percent, 15 percent, and 20 percent, while another might do 20 percent, 25
percent, and 30 percent. They can also request dollar amounts instead of
percentages, or enable “smart tipping,” which switches from percentages to
dollar amounts if a purchase is under a certain threshold. That’s how you might
get a suggestion to leave an extra $3 for a $3.75 chocolate croissant, which is
effectively an 80 percent tip.

On some interfaces, custom and no-tip buttons are smaller and harder to find
than the suggested amounts. Having to make a tip choice in order to complete an
order forces the customer to opt out of a process that used to be opt in.

It’s hard to resist tipping when your server is standing in front of you,
waiting and watching. Square

“It’s easy to cross the line from honest persuasion to harmful manipulation,”
said Harry Brignull, an expert in how design manipulates people into making
certain choices, also known as “dark patterns.” Touchscreens, he added, “tend to
emphasize the buttons to give big tips, and de-emphasize the button to give no
tip at all.” And if there’s a line behind the customer, they might feel pressure
to move as quickly as possible. No one wants to be the 21st-century equivalent
of that person who holds up the line to write a check.

“Some people will be so flustered they might end up hitting the most prominent
button not because they want to, but because they can’t find the option that
they’re looking for,” Brignull explained. “When that happens, it doesn’t really
feel like a consumer has made a choice. It feels like they’ve been forced.”

One provider, QikServe, even has a blog post about how sellers can use its
digital payment system to get more tips from customers. Those include a
suggested tip that’s slightly higher than the average tip as the middle
suggested option, which is the one customers are most likely to tap.

“As opposed to the traditional tip jar method, having a ‘no tip’ button on a
payment interface exploits a sense of guilt that the guest may not have
otherwise felt and makes them more likely to leave a tip,” QikServe, which did
not respond to request for comment, wrote. “All the more reason to push digital
payments.”

Of course, someone is profiting off of your guilt. And it may not just be your
server.


WHO BENEFITS FROM TIPFLATION

Digital POS systems are ubiquitous these days for a few reasons. For one,
they’re easy to use and relatively cheap compared to the options that came
before. The pandemic, which led to staffing shortages and a desire to minimize
personal interactions, only accelerated the transition.

Co-founded by Twitter’s Jack Dorsey and launched in 2009, Square gave any small
business the ability to take and process credit card payments through a small
and simple credit card reader they could attach to a phone or tablet. The
hardware and software was inexpensive or free, and Square took a small
processing fee from every transaction. Tablet-based POS systems were a natural
progression and, again, very attractive to smaller businesses that were used to
being charged thousands of dollars for traditional POS systems. Square started
to offer a “Business in a Box” that included everything needed for a POS except
the tablet itself. The company now makes its own tablets, too.

Toast, the food service POS company, said its products make its clients’
operations more efficient, which means servers can spend more time serving
diners and give them a better guest experience. That better experience could
translate into higher tips from happier customers, who appreciate being able to
leave them so easily, according to Kelly Esten, Toast’s senior vice president of
product marketing, market insights, and pricing. That’s probably more true for
Toast’s clients — food service establishments where most customers expect to be
asked to tip — than it is for, say, Square’s retail clients.

Either way, these payment services get a percentage fee for transactions made
through them. So it’s in their best interests if people spend more: An extra 20
percent tip to a business means a bigger processing fee to them.

“You’re already committed. When they ask you for something else, you’re more
likely to comply.”

These tablets were gaining in popularity before the pandemic, but Covid created
a new, pressing need for fast, relatively contact-free payment options. People
ordered and paid for more items and services digitally to avoid stepping into
physical businesses entirely. Where you once went into a grocery store and
selected, paid for, and brought home your items yourself, you might now be
relying on the store’s worker to do that for you. Historically, that’s the kind
of service you can and should tip for. During the pandemic, people were also
more willing to tip for services they didn’t tip for before or tip more than
they used to, like carryout orders at restaurants, food deliveries, or quick
service restaurants. And tips are, legally, supposed to go to the employees only
— not their managers and not the business itself.

Tips may also be a way for some businesses, already struggling with
pandemic-related expenses, difficulty finding staff, and now inflation, to keep
their costs down and attract more workers. With tips, workers effectively get a
pay raise even if their base pay stays the same. Jung, the Boston University
professor, said he’s seen hotels use things like QR codes to make it easier for
customers to leave tips.

“They don’t have the budget to actually increase wages. And for that reason,
they’re asking more on the side of the consumer by increasing the accessibility
of being able to pay tips electronically,” he said.

Even if a business doesn’t want to enable tips, it might feel forced to do so if
a competitor does before it loses employees to the business that pays them more,
with that extra pay coming from the customers.

Mama & Hapa’s, the Portland zero-waste store that asked Schreiner for a tip,
told Recode that it does so because its unique business model means that
employees are often educating customers about how the store works, so it gives
them the option to ask for tips to reward that service. And they don’t always do
so. Schreiner noted that the last time he went to the store, he wasn’t prompted
to tip.

“We don’t have any plans to stop allowing it because we have had some customers
say they are happy to tip at an establishment like ours,” Mama & Hapa’s said.

You may not be so happy to tip, but you should probably get used to it. Once it
becomes a social norm to start tipping for a certain service, it doesn’t revert
back even if the conditions that created it do. And the percentage we’re
expected to tip typically increases, too. Toast says that the average tips for
on- and off-premises purchases spiked during the pandemic. They’ve since gone
down slightly, but remain well above the pre-pandemic numbers, even as inflation
rose.


FEELING THE TIP GUILT

Barring a nationwide rebuke of tipping culture or laws forbidding the practice —
both of which are highly unlikely considering how ingrained in American culture
tipping is and how some high-profile attempts to end restaurant tipping have
failed — you can probably expect to be asked to tip at more places for higher
amounts. But should you comply?

Recode asked an etiquette expert what customers should do when the tablet asks
them to tip. Lizzie Post is the co-president of the Emily Post Institute and the
author of several etiquette books. She said that if you’re asked to tip for a
service that doesn’t traditionally ask for tips, there’s nothing wrong with
saying no.

“I think it’s really important not to give into the guilt,” Post said. “I tend
to personally say if it’s not a traditional tipping situation and nobody’s gone
above and beyond to create some kind of amazing experience or be extraordinarily
helpful, I’m hitting ‘no tip’ in those moments and not feeling terribly bad
about it.”

For services that are traditionally tipped, Post says people should leave at
least what’s considered an appropriate amount. They can leave more if they can
afford it, but shouldn’t feel guilty if they can’t. And, she added, businesses
should practice good etiquette, too. That means making customers feel welcome
and comfortable, not guilting them into leaving surprise tips.

“I think it’s really important not to give into the guilt”

But what’s polite in theory isn’t always what a customer (or a business) ends up
doing in practice. Zhu, the marketing and consumer behavior expert, said she
knows all the tricks businesses use to push people to tip and tip well. She
still leaves a tip because she can afford it, and it makes her happy.

“I think, at the end, it’s really, are you happy with what you did?” Zhu said.
“If you don’t have significant financial constraints because of the additional
tipping, if the service is actually good, and you expect to have better service
in the longer term from the same person, why don’t you make yourself happy?”

When it comes to tips that you feel guilted into begrudgingly leaving, it might
be more about what makes you the least uncomfortable than what makes you the
happiest. And that, too, may change as inflation chips away at your budget and
recession looms. Lynn, the tip expert, says he doesn’t know of any studies into
how inflation affects tipping, and there isn’t much out there about the impact
of economic conditions on tipping, either. His guess is that it won’t change how
much we tip but it could change how often we patronize the places that ask us to
tip.

Assuming, of course, that we know when and where we’ll be asked.

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