'The situation is out of control': more people in the US want tips, and no one understands how much and to whom to pay

A new teller trend is spreading across America: digital tip banks. You order coffee, ice cream, salad or a slice of pizza and pay by credit card or phone. The employee behind the counter then rotates the touchscreen and places it in front of you. There are several suggested tip amounts on the screen - usually 10%, 15% or 20%. It is also often possible to leave individual tips or no tips at all. CNN.

The worker is directly in front of you. Other customers stand behind you, waiting impatiently and looking over your shoulder to see how much you'll tip. And you have to make a decision in seconds. God, what a stress.

Today, shoppers and workers face a radically different tipping culture than just a few years ago. While consumers are accustomed to tipping waiters, bartenders, and other service workers, tipping a barista or cashier may be new to many shoppers. In many ways, this is facilitated by changes that have allowed business owners to shift the cost of paying employees directly to customers.

“I don't know how much you should tip, and I'm looking into it,” Michael Lynn said. Professor of Consumer Behavior and Marketing at Cornell University is one of the leading researchers on the habit of tipping in the United States.

During the pandemic, customers were urged to tip generously to help restaurants stay afloat.

And it raised expectations. In the most recent quarter, total tips at full-service restaurants were up 25% year-over-year. And in fast food restaurants - by 17%.

The transition to digital payments has also accelerated during the pandemic. This has led stores to replace old fashioned tip jars with tablet touch screens. But those screens and digital tip procedures proved to be more intrusive.

Customers are overwhelmed by the number of places they now have the opportunity to leave a tip. They are under pressure to decide whether to tip and how much. Some people deliberately walk away from the screen without doing anything so as not to make a decision. So say etiquette experts who study tipping culture and consumer behavior.

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Tipping and emotions

Some customers leave tips no matter what. Others feel guilty if they don't tip. Or embarrassed if their tips are mean. And others refuse to tip for a $5 iced coffee, believing the price is too high.

“The American public thinks tipping is out of control because they encounter it in places they don't know how to do,” says Lizzy Post, co-president of the Emily Post Institute.

This year, Starbucks introduced a tip option for customers paying with credit and debit cards. Some Starbucks baristas have said tips add extra money to their salary. But customers shouldn't feel obligated to tip every time.

One Washington state barista said he understands if a customer doesn't tip for a coffee order. But if he's making a custom drink after taking the time to chat with a customer, he's a little upset if he doesn't get a tip.

“If someone can afford to visit Starbucks every day, they can afford to tip at least occasionally,” added another employee.

The complicated history of tipping in America

Tipping proliferated after the Civil War as an exploitative measure to lower the wages of newly freed service slaves. Pullman was best known for its tipping policy. The railroad company hired thousands of black porters. But she paid them low wages and made them rely on tips to earn a living.

Critics of tips have argued that they create an imbalance between customers and employees. And in the early 1900s, several states passed laws banning the practice.

In The Itchy Palm, writer William Scott stated that tips are "un-American." And he argued that "the relationship of a person who gives a tip and a person who accepts them is as undemocratic as the relationship of a master and a slave."

But tipping service workers was, in fact, enshrined in law by the Fair Labor Standards Act of 1938. He established a federal minimum wage that excluded restaurant and hotel workers. This allowed the tipping system to spread to these industries.

In 1966, Congress created a "sub-minimum" wage for tipped workers. Since 1991, the federal minimum wage for tipped workers has been $2,13 an hour. That's lower than the federal minimum of $7,25, although many states require higher base wages for tipped workers. If an employee's tips fall short of the federal minimum, the employer is required by law to make up the difference. But this does not always happen. Wage theft and other irregularities in the service sector are commonplace.

The Department of Labor considers that any worker who regularly receives more than $30 a month in tips is classified as a tipped worker. Experts estimate that there are more than five million tip workers in the United States.

Tipping Tips

According to Cornell's Lynn, how much to tip is completely subjective and varies across industries. And the relationship between service quality and tip size is surprisingly weak.

He suggested that tipping between 15% and 20% in restaurants has become the standard due to competition among customers. Many people tip to gain social approval or to expect better service. As the tip level increases, other customers start tipping more to avoid losing status.

The gig economy has also changed tipping norms. An MIT study published in 2019 found that customers are less likely to tip when workers have the freedom to decide whether and when to work. Nearly 60% of Uber customers never tip. And only about 1% always tip, according to a 2019 University of Chicago study.

Confusingly, Lynn says, “There is no central body that sets tip rates. They go from bottom to top. Ultimately, it is what people do that helps establish what other people should do.”

You should almost always tip minimum wage earners.

For example, restaurant waiters and bartenders, advocates and tips experts say.

Etiquette experts say that when customers are given the opportunity to tip at places where employees are paid by the hour, like a Starbucks barista, they should act on their own. Tips help these workers supplement their income, but it doesn't hurt to say no.

Experts recommend that customers approach the touch screen the same way they approach a tip jar. If they want to leave change or a small cash tip in the bank, do so when prompted to do so.

“Tipping 10% for takeaway food is a very common amount. We also see change or one dollar per order,” says Lizzie Post. If you don't know what to do, ask a worker if the store has a suggested tip amount."

Saru Jayaraman, president of One Fair Wage, an organization that campaigns to end the minimum wage policy, encourages shoppers to tip. But tips should never count towards the pay of service workers. And clients should demand that businesses pay workers full salaries, she said.

“We have to tip. But this should be combined with directing employers that tips should go towards the full minimum wage and not instead of it,” she said.