'Tipping has become a hidden tax,' expert says; here's why (2024)

FAQs

Why has tipping gotten so out of control? ›

This is a feeling that's becoming too familiar to many Americans in the last few years. Thanks to the new advancements in tipping technology, the practice has started to lose its purpose of showing gratitude and has become a norm in too many places we shouldn't accept.

The majority of Americans (72%) say tipping is expected in more places than it was five years ago, according to Pew Research Center. And Bankrate's annual tipping survey found that 66% of Americans now view tipping negatively.

In America, tipping is optional in name only.

Legally it's voluntary but if you slink out of a restaurant without leaving a gratuity of between 20 and 25 per cent, you're likely to be chased by a waiter demanding to know why.

“While there are no hard-and-fast rules about when to leave a gratuity, it's generally accepted that servers in bars and restaurants should be tipped. The same is true for other service providers such as barbers and hairdressers. Other than that, it truly is at the discretion of the customer,” she says.

Experts trace this very American tradition back to weaker unions, business owners who wanted to exploit the cheap labor of a changing workforce and a hotel culture that valued tips as it began to serve more a la carte meals.

Tips have played a key role in restaurants, where workers typically earn less than the minimum wage and rely on service charges to boost their income. Now that customers are constantly prompted to leave tips for a range of services, some businesses even mention tips in their job listings to try and entice applicants.

To be clear, the etiquette experts aren't saying to avoid tipping at the counter — merely that it's at your discretion. A gratuity can reasonably be reserved for workers who provide a great experience. “It's a nice gesture to offer a tip to a worker who goes above and beyond the service,” Swann says.

Some customers are choosing to save a few dollars by skimping on or skipping the tip. There's a common conviction held by some diners, who believe that by not tipping or doing so conditionally, they're actually protesting a broken system.

According to a recent Bankrate survey of over 2,400 adults across the country, 59% of those surveyed said they had a negative view of tipping, with 35% saying tipping culture has gotten out of control.

Whilst in much of Asia tipping is not expected, tipping is actually considered rude in the following countries: Japan. China. South Korea.

Do you have to tip at McDonald's in America? ›

In the U.S., it is McDonald's corporate policy to not allow tips: "Tips are not accepted as McDonald's restaurants have a team environment which is not about rewarding individuals.

"The staff agrees it is always up to the customer's discretion, but 15% is a safe number to show your thankfulness for the service," Guas says. "A tip shows you have been noticed for the hard work you are doing when many times it can be a thankless job."

"In this case, 20% is not the new minimum," Dr. Peters says. If you have excellent or extremely fast service and want to leave something, consider adding a few dollars to the tip jar. "Some suggest that 10% is a good amount, but others say $1 or $2 is reasonable for good service," she adds.

Since so many people feel like a lot has changed in less than a decade, they're naturally pretty confused. Only 34% say it's “extremely or very” easy to know if you should tip and slightly less (33%) report confidence in knowing how much to tip.

An increasing number of Americans believe that tipping expectations are unfair, says Carla Bevins, an expert on business management communication at Carnegie Mellon University's Tepper School of Business. And that's led to a shift in public attitudes toward gratuities.

The inherent problem with the tipping model is that it has ended up as the opposite of what it pretends to be. This is because servers aren't paid a living wage unless tips are included. If their base pay was sufficient, then a gratuity would be just that: extra.

The problem is that if everyone stops tipping, the only ones being affected are the restaurant staff - not the owners. So the message won't be delivered and might actually cause more harm than it should. Staff accepting to be paid in tips are exactly the ones who need to change their mind.

In addition, inflation has caused prices to rise across many industries. 3 Because tipping is usually based on a certain percentage of the total cost of a product or service, the cost of a tip naturally increases when the price of that good or service goes up.