Whether you’re buying a cup of coffee, taking a cab ride or having food delivered, you’re probably adding a bigger gratuity than you have in years past. Rising expectations, proliferating tip jars and point-of-sale systems that pre-calculate the gratuity now have people paying more for a broader range of products and services than ever before.
To be sure, great service deserves a generous gratuity, but often the decision to leave a bigger tip isn’t exactly what you had in mind. It is being engineered by the establishment or service provider. Welcome to the era of “tip creep.”
Here are a few ways it happens:
The Automatic Tip
Point-of-sale systems are programmed for convenience. Transactions end with the option to select a pre-calculated tip, such as the increments of 20, 25 or 30 percent found in New York taxis. Pressed for time, and faced with the challenge of calculating a more customary 15 percent gratuity on the fly, many people simply select the higher default options. Another point of contention: Those systems don’t calculate the tip on the base fare, but also on surcharges, boosting the bill further.
Tips Everywhere You Look
Try this exercise in tip awareness. Count the number of times in a day when you’re presented with the expectation to tip, and tip well. Is it at the farmers' market stall, where a jar is labeled “food artists donation"? Is there a framed sign at the spa, reminding patrons to tip 20 or 30 percent on treatments? If you dine at Los Angeles Italian restaurant Alimento, you can pay two tips on your credit card slip: One for the server and another for the kitchen line workers who prepare the food.
The New Tip Model -- Compensation Equity
Though supporters of Alimento say the two-tier tipping system helps provide a fair wage for kitchen workers and keeps menu prices down, critics see it as an example of shifting compensation costs to customers.
That’s the only explanation that Elizabeth Ross, a Boulder, Colo. lawyer and blogger, sees for the somewhat inflated tips she pays for grocery delivery service InstaCart. The automated checkout system adds a delivery fee and also calculates a gratuity on the entire amount of her order, which is often over $100.
“It used to be that a tip for delivery service was $2, and I know that with inflation, it can be $5. But expecting a 20 percent tip on a grocery delivery? That is what you pay for restaurant service when they’re filling your water glass and giving you an extra napkin,” she said.
Tips Plus Wages Equals Confusion
If you assume that tips are a way to maintain low costs and retain good employees, you may be right, said tipping expert Michael Lynn, a professor at the Cornell University Hotel Schools. Research shows that paying higher wages and keeping tips low has consequences, particularly if menu prices rise to offset the higher wages, Lynn said.
“Customers base their perception of expensiveness based on the menu prices, so they will think that a menu of higher prices is a more expensive choice,” he said.
The Price of Social Acceptance
Ross, like many customers, doesn’t immediately notice options for “no tip” or “custom tip” on the screens of automated payment systems. And even if they do spot them, consumer research shows that we often select an option that allows us to avoid looking cheap, said Lynn.
At Salt & Straw ice cream shop in Los Angeles, customers have the option to tip $1 or $2 on that cone, to “customize” a tip or leave no tip at all. With a long queue, which option do you think most people choose?
The question of tipping, and how much is appropriate, continues to be controversial, said Thomas P. Farley, a New York-based manners and lifestyle expert.
“Technology has given us quicker, cleaner options to leave a tip, and very often, it is skewed in favor of the person receiving the tip,” Farley said. “Whether you’re paying on the back of a taxi or on some smartphone application, you do have the option of entering your own tip. To the extent that people are over-tipping, they only have themselves to blame.”