America’s Tipping Culture Is Out Of Control

Added: 2026-05-09

[00:00:00]What's up, guys? Welcome back to my channel. And if you're new here, then welcome to our little quarter of the internet. Today, we're going to be watching a video titled Why Tipping is So Out of Control in the US, which obviously the tipping culture is way different there than it is here. I think I don't really comprehend it yet neither. I think I'm going to understand it better when I am there. But um but yeah, without further ado, let's see what this video is about. When was the last time you purchased something and you weren't asked for a tip? Yeah, I can't remember either. Today, >> tipping culture has gotten out of control. I get up to the pay window and she's like, "How much you want to tip?"

[00:00:39]What am I going to tip you for? I'm in the drive-thru. Oh my god.

[00:00:44]>> Tips have been on the rise for decades.

[00:00:46]During the 1950s, people commonly tipped 10% of the bill. By the 1970, >> I actually find myself tipping way less now that I'm paying with card mostly than and not in, you know, cash. In cash, you usually just leave a few coins here at least. Like you don't even have to count a percentage. You just leave something. Um, but now that I'm paying with card, uh, you don't tip. Like you they don't add a tip on the card. In 1980s, I jumped to 15%. Today, people tip anywhere from 15 to 25%.

[00:01:17]>> According to one 2022 survey, consumers said they tipped more than 21% on average.

[00:01:24]Nowadays, there are people who argue 20%'s kind of a cheap tip.

[00:01:29]>> While the percentage that consumers are tipping at full service restaurants and what are you supposed to tip like 50% of of the whole thing? Like it doesn't make really doesn't really make much sense, does it?

[00:01:40]>> The past couple of years has remained about the same. In the fourth quarter of 2022, the number of tips provided at full service restaurants grew 17%.

[00:01:49]Meanwhile, the tip frequency at quick service restaurants such as coffee shops and fast food chains rose 16% during the same time period.

[00:01:56]>> What we're seeing now nationwide is something that is known as tipflation.

[00:02:02]At every opportunity, we're being presented with a tablet that's asking us how much we'd like to tip. In many cases, not only replacing the old-fashioned tip jars that you could feel good about throwing some spare change into, but actually suggesting tip amounts, often right in front of the employee receiving that tip. Not to mention also your dinner date and the dozen or so people standing behind you in line. And it's gone beyond just the tablets. The other day, I was using the Hopper app to book a hotel, and it wasn't until I confirmed my payment that I realized my hotel was $10 more expensive. It turns out Hopper assumed I wanted to add a tip and I had to go back to a prior page in order to opt out.

[00:02:45]>> Tipflation refers to not just that we're tipping more, but we're tipping everyone for everything.

[00:02:54]>> Yeah. I mean, this feels like some sort of tax already. Not like tipping because you want to tip someone for their good work, you know?

[00:03:01]>> You're being guilted into tipping on something that is not technically a service. that someone's simply doing their job. In those situations, consumers are feeling resentful. Where do you draw the line?

[00:03:29]TIP stands for to ensure promptness.

[00:03:32]Tipping may go back as far as the Roman era, but according to most experts, the practice likely has its origins in medieval Europe.

[00:03:38]>> Noblemen taking passage on roads would throw coins to the rubble to ensure safe passage. One theory is that it evolved in eating and drinking establishments as a way to foresto envy. That when you're eating and drinking, you're having fun and the people who are serving you are not. Fast forward to the 19th century when waiters who received a full wage went on strike demanding higher wages.

[00:04:02]They were replaced with women who employers could pay less. A decade later, there was the population of newly freed slaves.

[00:04:10]>> If you hear background noise, by the way, it's my neighbors. They're doing some something um something.

[00:04:21]The idea from these restaurant owners was that they were giving the luxury or privilege of a white person's tips. That was without a full wage.

[00:04:30]>> Ironically, as tipping exploded in the United States, it became less common in Europe and was replaced with service charges.

[00:04:38]>> While the first federal minimum wage law was passed in 1938, it wasn't until almost three decades later when the tip minimum wage was established. In 1991, the federal minimum wage for tipped employees was set at $2.13, which is what it remains at as of March 2023.

[00:04:57]>> As far as I know, the United States is the only country that exempts tipped workers from having to receive the full minimum wage.

[00:05:06]>> In 43 states, it is legal to pay tipped workers less than the standard minimum wage because tips presumably make up that difference.

[00:05:22]In recent years, you might have found yourself asking, "Do I tip this barista for pouring that hot coffee? What about when I'm going to a restaurant and picking up takeout?"

[00:05:30]>> My when like why I tip is usually when there's like good customer service. When I like the the service, that's when I tip most, you know? Also, like if I go out to dinner with my mom and we're eating a bunch of things, then then I'll tip. Like if it's like something bigger, but usually like that's the way I go about it.

[00:05:53]And how much do I tip that doorman, driver, or dog walker? When those in the service industry were feeling the brunt during the coronairus pandemic, consumers started tipping for things they never had before. And the percentage of remote transactions when tipping was an option in which the consumer tipped soared from about 46% before the pandemic to around 86% in January 2022. If people were willing to tip the person delivering food to their home 30%, why not ask if they'd like to tip when they come pick up? During the pandemic, businesses who lost a lot of traditional customers and transactions were looking for alternative ways to make up that income. And if asking for tips was one way to do it, they were willing to try it.

[00:06:42]>> And since then, that ask hasn't dissipated.

[00:06:46]Another reason consumers say they feel pressured to tip more, they're being asked to tip prior to service completion. Asking for a tip beforehand is almost like a bribe.

[00:06:56]>> What?

[00:06:57]>> Right. It's I'm afraid not to tip because well, you do less good work.

[00:07:03]>> Customers might not be concerned about the barista's perception of their tip before getting their latte, but what about the mechanic repairing your car? I don't know about you, but I'm certainly going to make sure to tip them well to ensure my safety.

[00:07:18]I mean, yeah, it makes sense, but I never thought about it like that, honestly.

[00:07:23]But also because it's probably different there. I mean, if they do like put a screen on you where you have to tip and they can see if you tip or not, that's kind of uncomfortable. But at least here, like the last time I tipped before I got a service was because I went to Starbucks, surprise, surprise, in Andor.

[00:07:39]And the customer service was really, really good. They were like super nice and we were chatting. So after I paid for my coffee before they made it, I like put coins in the tip jar, but I didn't feel pressured to do it. It's not like you have to tip, but I just wanted to.

[00:08:00]Oh, don't don't don't don't pull that move on me right now, neighbor.

[00:08:07]I think they're paying because I stream at night. They're like, "You like this?

[00:08:14]You like this?

[00:08:17]It's 9 in the night.

[00:08:20]Damn."

[00:08:22]Like, when I make noise, it's because accidentally I drop everything and I break everything and everything falls apart. But to be like constructing something at this time.

[00:08:33]Yeah, exactly. That's what I thought.

[00:08:39]Another reason consumers are tipping more, newer technologies, kiosks and tablets with three large tipping suggestions that pop up on the screen in front of you. Three options chosen by the business.

[00:08:52]>> I have not yet been to the restaurant where they recommend 5, 10, or 15% for quick takeout. It normally always starts at 15 as a bare minimum. Sometimes even starting at 20, 25 and up to three.

[00:09:09]>> I'll be back in a second, guys.

[00:09:12]>> As a bare minimum, sometimes even starting at 20, 25 and up to 30.

[00:09:17]>> According to a 2022 creditcards.com survey, 22% of respondents said when they're presented with various suggested tip amounts, they feel pressured to tip more than they normally would.

[00:09:28]>> They use those options as an indication of kind of what the normative range is.

[00:09:32]Honestly, I would feel personally attacked in a place like this because I am such it's very stupid to say, but like a people pleaser or like I just want everyone to be happy and if I see that I could just I you know don't try and get tips out of me because I will give them because when I feel bad and then people are watching you know you want to be the good person >> and feel compelled to tip within in that range. So the more you ask, the more you get.

[00:10:06]>> The three prominent companies with that trendy, sleek look are Square, Toast, and Clover. They launched a bit more than a decade ago to help businesses run smarter, faster, and easier. All in one point of sale or POS systems. In some cases, fewer fees, so it's less of a burden to accept multiple credit cards, no long-term contracts, and multiple other useful tools, including inventory and employee management. They got credit card processing into the hands of individuals and very small merchants.

[00:10:35]Square did a great job and it's been a tremendous growth story. That's half of the business today.

[00:10:40]>> Do you think these companies are responsible for this turn of events that we've seen with tipping?

[00:10:45]>> I would say they could take some of the credit for helping restaurants gather more tips.

[00:10:49]>> Robert Sanchez manages Eli's Essentials in New York City. One of the business's locations uses toast while the other uses this. He says the storefront that uses Toast sees more and higher tips.

[00:11:02]>> The Clover Square and Toast terminals to a consumer are very easy to use. Big buttons, big areas to sign the tip. An easy way to tip a different amount if you don't like the starting at 20% option. There are others that do it.

[00:11:16]They're just not as >> the way you have to press no tip and you can't just like, you know, they're just standing there and then you have to sign it as well.

[00:11:24]>> Yikes. I don't like that. cool looking.

[00:11:28]>> We've come a long way from being able to just throw your spare change into the jar by the cash register.

[00:11:34]>> The new tablets have turned what used to be a sin of omission. I simply didn't put money into the tip jar.

[00:11:42]>> I hope that doesn't come here anytime soon >> into a sin of commission. I have to hit a button and say no tip. I have to actively choose not to tip. Whereas before, not tipping was a kind of a passive thing. Glancing at the tip jar could have also been a way to get a sense of how many others are tipping on that service and maybe even how much money. Meanwhile, not only can the tipping options be customized, but the tipping feature can be disabled as well.

[00:12:07]So, it's the merchant's choice to ask or not to ask for tips.

[00:12:12]>> From the business side, it makes employees want to perform better and do a better job.

[00:12:17]>> It's seriously significant. It really pays for the software. you'd be a foolish business owner not to install it based on what the numbers display. Even a mammoth company as large as Starbucks has decided that they need to sink or swim and and the best way for them to do that is is to offer the tip rate.

[00:12:36]>> Starbucks not I don't think they need to sink or swim. They just want more money.

[00:12:40]>> Starbucks ruled out the tipping feature in stores in September 2022.

[00:12:44]>> It's one thing to have a happy staff.

[00:12:46]It's another thing to have customers that are feeling resentful. I think it's a calculus that all business owners >> I don't know how the tipping culture goes there but here in many places the staff has to divide the tips between them and I don't know if that makes you any happier I mean coming from my work experience as a waitress um when customers would be like this is for you you put it in your pocket you know like don't give it to anyone else that was the best type of tip but then when this regular regular tip where I was the only one working, excuse me, and the others were other ones were were smoking in the back room.

[00:13:28]Well, I was working and I got tapes and I had to share them with them.

[00:13:33]No, no, I did not like that. That didn't make me any more motivated to work.

[00:13:39]really need to make.

[00:13:46]>> Do you think that they're somewhat going to start seeing that they're getting lower tips because people are paying tips to so many services or they're resentful of the act of tipping in general?

[00:13:58]>> I think that's a very real danger of servers in a sit down restaurant. They were greatly affected during and immediately post pandemic by restaurants doing all sorts of fees. Their tips were actually going down because consumers were saying, "Well, if I'm paying for the health insurance and I'm paying for inflation and I'm paying for this and I'm paying for that, enough is enough.

[00:14:20]The more you levy these line items onto consumers, guess who's being penalized?

[00:14:26]It's the one area that's still quasi discretionary, which is the tip.

[00:14:31]>> I went door to door talking with waitresses, bartenders, and baristas.

[00:14:34]And while they wanted to remain anonymous, they told me it's happening already with inflation and being prompted for tips left and right. They say customers have already started to tip less and sometimes not at all. A 2022 study found that 17% of Americans are tipping less because of inflation.

[00:14:52]However, 10% report tipping more. At the same time, more than half of Americans, or 60%, want to do away with tipping entirely. The extent of pandemic influence generosity has also gone down.

[00:15:04]43% of consumers typically tipped servers 20% or more in 2022 compared to 56% of consumers in 2021. Meanwhile, the average tip for full service restaurants has gone down only slightly during the same time period. According to Toast, 19.6% in the fourth quarter of 2022, compared to 19.8% 8% in 2021. However, according to surveys conducted in those same years, respondents said they're tipping higher percentages, 21.2% and 18.9% respectively.

[00:15:36]>> It can genuinely hurt the people who truly truly rely on gratuitities for their livelihood. I firmly believe that the tipping invasion we are experiencing right now, I think it's a net negative for society. And with that tablet at just about every counter no matter where you go, the question is where's the tipping point? I'm wondering how long before I'm tipping my doctor after an annual physical. If you want to seem especially generous after an exceptional meal, you might decide to go big and tip 30%. But it's a cycle. As more people seeking to make a good impression then up their tips to 30%, maybe even 35%.

[00:16:19]What becomes a generous tip? I have to believe tips are going to go up from where they are today. But I also think there's got to be a logical ceiling somewhere. I just don't know where it is.

[00:16:35]I feel like everyone tips kind of like in their own way. I don't think there's like I mean obviously it can get like to bigger amounts as a as a whole or smaller amounts as a whole but there's always going to be people who want to tip more and people who don't want to tip. So it's kind of like a it should be a personal preference thing. They're kind of forcing it to not be. Um, but yeah, I want to know what your opinions are, guys. Are you Are you guys generous tippers? Are are you are you tipping a lot? And thank you for joining me for this video. I really hope you enjoyed it. Please leave a like, subscribe if you haven't yet, and I'll see you guys in the next video. I'm also going to add that I I would be a generous tipper.

[00:17:27]I've just never been in a position to be one, you know. But um but yeah, I still don't like the fact that they're kind of forcing it. Yeah. Anyways, love you guys. Bye.