Would You Like to Leave a Tip?

The odd phenomenon of TIPflation and the inevitable pushback

*Jerry Seinfeld voice: “What’s the deal with tipping?!?”

So we’ve all felt it, right?

Tipflation: the seemingly unending growth of the invitation to tip on every purchase just about everywhere on earth.

Not long ago, I took my girls to the local self-serve frozen yogurt joint.

You know the type - you literally grab a cup, fill it with yogurt, and then add your own toppings. When you’ve completed your overly-sweet monstrosity, you take it to a little scale by the register and an employee tells you how much your creation will cost you (pro tip: it’s always more than you think).

So we did this.

And then she flipped around the ubiquitous iPad screen to let me “sign” for my credit card purchase…only it invited me to leave a tip. And I couldn’t figure out why. I did all of the work. It would be like Wal-Mart letting you fill up a cart, perform the whole self-checkout routine, and then asking if you’d like to tip at the end.

Um, what?

I was relieved to know that this is not a symptom of my transformation into a curmudgeon but rather something that people everywhere are experiencing.

It’s everywhere. We’re confused. We feel guilty not tipping. But we feel resentful that they make us feel guilty for not tipping when a tip is clearly not needed or appropriate. What happened? How did we get here?

An excerpt from that linked article:

Digital payment methods have been around for a number of years, though experts say the pandemic has accelerated the trend towards more tipping. Michael Lynn, a consumer behavior professor at Cornell University, said consumers were more generous with tips during the early days of the pandemic in an effort to show support for restaurants and other businesses that were hard hit by COVID-19. Many people genuinely wanted to help out and felt sympathetic to workers who held jobs that put them more at risk of catching the virus, Lynn said.

Tips at full-service restaurants grew by 25.3% in the third quarter of 2022, while gratuities at quick or counter service restaurants went up 16.7% compared to the same time in 2021, according to Square, one of the biggest companies operating digital payment methods. Data provided by the company shows continuous growth for the same period since 2019.

So we don’t love tipping everywhere. But we continue to up the tipping just about everywhere. And businesses are using us to supplement pay for employees. So we’re doing that thing that drives economists nuts - acting irrationally against our own self-interest.

What does it all mean?

I do think humans have an innate desire (some might say a design) towards generosity. We like to give. It feels good and is chemically rewarding. Humans also really don’t like being taken advantage of - and that’s been happening for awhile in this space.

From the same article above, a woman reports that her mortgage company is now allowing for tips. Like…what?

Where does this go? Where does the tipping phenomenon end? I mean, is your local preacher adding a tip jar next to the offering boxes in church…

Wait…. 🤔

- KB