MoneyDon't Waste Your Money


Tipping fatigue: Are requests for tips getting out of control?

New digital cash registers want tips for coffee, muffins
Posted at 4:00 AM, Mar 01, 2023

As more businesses adopt new high-tech payment methods, the more you're asked to pay up.

The result: whether you're paying for a service in person or on your phone, you're much more likely these days to encounter three little words: "add a tip."

But a growing number of consumers wonder if these 15% to 25% tip requests are getting out of hand.

Jamal Potter and Jared Metz, having lunch outdoors during a recent warm day, said every time they get food or coffee, the pressure is on thanks to new "point of sale" systems that encourage a tip for every purchase.

"I am always feeling like I have to tip everybody in every industry," Metz said.

"It's kind of pressure when they turn that register around on you," Potter said. "You can't say no; you don't want to be rude."

Customers became much more generous during the early days of the pandemic as a show of support for restaurants and other businesses, and even though life is almost back to normal now, the trend has never really stopped.

Tipping up sharply since arrival of new payment systems

According to payment processing company Square, tips at full-service restaurants grew by 25% in the third quarter of 2022.

For restaurants with counter service, Square says tips were up nearly 17%, possibly because of the widespread use of "POS" spin-around card readers.

NerdWallet's Kimberly Palmer says digital payment methods are replacing the old tip jar, making it hard to decline a tip.

"First of all, it's really important to acknowledge that tipping is optional, but in certain situations, it is expected," she said.

However, Palmer says it's easy to spend outside your budget.

"Often we feel like other people can see what we're tipping, maybe even the employee themselves, so it can feel a little uncomfortable," she said. "So I think it's really worth just thinking through; it's OK to decline a tip if it's a situation that doesn't call for one."

How much you should tip?

According to NerdWallet:

  • Servers and bartenders should receive 20%.
  • Rideshare drivers: 15% to 20%.
  • Food delivery drivers: 15% to 20%.
  • Spa or salon professionals: 15% to 20%.

Palmer says if you can't afford gratuity, maybe it's time to rethink the purchase of, for instance, a $5 latte.

Shopper Tricia Kelly says if 20% feels too high for a snack or coffee, you can customize and tip a little less.

"I don't mind it because I can always hit the custom tip," she said.

That way you don't waste your money.


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