Tip Creep or Tipping Point? Consumers Are Changing Their Behaviors Around Tipping
Key Takeaways
One-third (33%) of U.S. adults say the frequency or amount they’re expected to tip has increased in the last five years.
More than half of adults consider a tip to be necessary or expected for various experiences and establishments, with dining in at independent restaurants ranking highest among tested services.
Establishments considering a change in policy to replace tipping must be aware that adults are more likely than not to oppose mandatory service charges and price hikes.
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Tipping used to be a reward for great service, but for many, it’s become more like an obstacle course of guilt, avoided eye contact, and touchscreen prompts demanding 25% for a takeaway muffin at a counter. Welcome to the era of “tip creep,” where many consumers believe they’re being asked to tip more than ever before — everywhere from self-checkout lanes to doctor’s offices to movie theater kiosks.
As tipping fatigue sets in and consumers alter their behaviors, some businesses are replacing gratuities with mandatory service charges or simply raising prices to pay staff better wages. But establishments must be aware of how customers feel about these changes given the deep-rooted perceptions of tips as discretionary in American culture.
One-third of U.S. adults say they’ve experienced “tip creep”
When asked whether they agree or disagree with a group of statements regarding tipping for service, 33% of U.S. adults say that the frequency or amount they’re expected to tip has increased in the last five years — in other words, they’re experiencing “tip creep.” At the same time, 44% say that service workers shouldn’t have to depend on tips to make ends meet. This doesn’t necessarily mean that consumers think tipping should be made obsolete, but at the same time, many don’t want to feel the pressure to be the primary source of income for those in the service industry.
That said, most of the statements about tipping don’t resonate with a majority of respondents. The only statement eliciting more than 50% agreement was the notion that tipping should always be optional and based on service received. As businesses weigh how to proceed — debating between keeping the current approach, adding a service charge to bills, or raising overall prices to facilitate higher employee wages — they must consider the overall perception of gratuities as discretionary.
A majority of adults believe tipping should remain entirely discretionary
Tip creep manifests in a few different ways in the daily lives of consumers. The factor most commonly opined upon is the proliferation of establishments where tips are expected, or at least commonplace. For example, where tipping used to mostly be reserved for dine-in restaurants, it’s now become common practice at cafés and takeaway counters. Overall, 20% of U.S. adults say that the different types of establishments they tip at have expanded in the last five years, and nearly as many (19%) say the frequency with which they tip overall has increased.
But in addition to the frequency of tipping in general, around one-quarter of U.S. adults say the percentage of their total bill they tip has increased (25%), and a slightly higher share (27%) say the overall amount they tip is more than it used to be.
The group that seems to have expanded their tipping habits the most are middle- and high-income earners, compared to their lower-income counterparts. That said, they’re also more likely than others to say that tipping should always be optional and based on service received — in other words, they see themselves as willing participants in tip creep culture.
For some services, customers feel more pressure than desire to leave a tip
Given the discretionary nature of gratuities, consumers have varying opinions on where and when tips should be offered — and whether they consider it necessary, expected, optional, or not warranted at all. A majority of adults do believe tips should be given in many situations: Among the nine services most likely to command gratuities, at least half of U.S. adults said tipping was necessary or expected. And while most associate tips with restaurant service, the scenarios most likely to command gratuities are a mixture of food and beverage, travel, beauty and wellness, and mobility services.
Many food and beverage services induce more pressure to tip among consumers
That said, the scenarios where consumers feel outsized pressure to tip lean more toward food and beverage than other categories. Dining at an independent restaurant is the occasion that most adults believe warrants a tip and is also where they feel the most pressure to do so — followed by getting delivery at home.
But the third and fourth-ranked settings where consumers feel most pressure are dining in at a chain restaurant and getting drinks at a bar, both of which fall lower in the rank order of services for which adults feel a tip is necessary. More than one-third of adults (35%) say they believe a tip is optional or that customers should not tip at all when dining at chain restaurants, and slightly more (37%) say the same about ordering drinks at a bar, but around half say they feel “somewhat” or “very” pressured to leave gratuity in those scenarios.
Other eating occasions — counter service and takeout — also rank higher in terms of pressure to tip versus the perception that a tip is warranted. The disconnect here reveals the scenarios where tip creep may feel the most frustrating and where establishments must tread carefully in putting pressure on their customers.
Consumers are adjusting their habits due to tip creep, but don’t favor changes to the system
Perhaps due to the perceived pressure related to growing gratuity expectations, a majority of U.S. adults say they’ve changed their behaviors in some way to account for tip creep. Over one-quarter say they use services that require tips less frequently than they used to, and 23% say they visit establishments where they don’t feel the need to tip more often than before. A smaller but still notable share (16%) say their tips are smaller overall due to the need to tip more frequently. Even if not changing behaviors, customers are expressing displeasure: Nearly 3 in 10 U.S. adults (29%) say they find themselves complaining more about tipping than they used to.
As debate continues over the best ways for service-related establishments to address tipping frustrations, some consumers say they support changes to the system. When asked about mandatory service charges being added to bills, around 2 in 5 adults say they support the idea of establishments adding 15% of the total bill in lieu of a discretionary tip. Nearly one-third (31%) support an 18% addition, and slightly fewer (28%) say they support establishments adding a 20% service charge.
Most oppose establishments taking measures to replace discretionary tipping
Support is comparable for a behind-the-scenes add to customer charges: 39% of adults say they support establishments raising costs overall to account for service worker wages in place of tipping. However, for all of these measures, opposition outweighs support, suggesting that there’s a long way to go before the discretionary tipping culture that’s so ingrained in American society will fade away.
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Lindsey Roeschke is an analyst whose work focuses on behavior and expectations of consumers in the travel & hospitality and food & beverage categories, particularly through a generational and cultural lens. Prior to joining Morning Consult, she served as a director of consumer and culture analysis at Gartner. In addition to her research and advisory background, Lindsey has more than a decade of experience in the advertising world. She has lived and worked in seven cities across four continents.