Ubiquitous tip prompts on touchscreens appear to be affecting Americans' propensity to generously tip service workers in the flesh, as was once the norm around the holidays.
The growing number of prompts asking consumers to add gratuities to all manner of bills have worn out Americans on tipping, particularly as inflation chews into their own budgets, a new survey shows.
Sixty-two percent of Americans say they don't plan to give holiday tips or buy gifts for service workers this year, according to the survey from digital personal finance company Achieve. A different survey from Bankrate last year found that 54% of people planned to tip the people they normally do, including waiters and hairstylists, more generously around the holidays.
Bankrate also found in its annual tipping survey in June that Americans are tipping less in general, despite the growing number of requests for something extra.
Only 65% of diners said they always tipped waitstaff at sit-down restaurants, compared to 77% of diners who said they did so four years ago.
Annoying Tipping Trend Affects Holiday Generosity
A recent trend of being asked for tips on even the smallest in-person purchases is causing frustration and making people less generous this holiday season, according to Achieve co-founder and co-CEO Andrew Housser. The prompts for tips are even appearing when consumers are served by machines, making it unclear who would benefit from the tip. Housser pointed out that the makers of cashless payment apps may earn a cut of the total bill, giving them an incentive to encourage higher charges for consumers. The ubiquity of point-of-sale tipping is driving behavior to not tip deserving individuals, which is an unfortunate outcome, Housser added.
Various factors are contributing to a decline in Americans' generosity. People are rapidly depleting the excess savings they accumulated during the pandemic due to government stimulus programs. Housser noted that these savings are projected to run out by early to mid-next year. Additionally, Americans are carrying more debt than ever before, with over $1 trillion owed on credit cards and a total debt of $17.3 trillion, as reported by the Federal Reserve Bank of New York.
"Excess savings are running out and people have more debt, and we're in an uncertain economy, too," Housser added. "That, combined with the ubiquity of point of sale tipping prompts, has people throwing their arms up and saying, 'This has always annoyed me and now all of a sudden it is a much bigger problem than it was because the economy is so uncertain.'"
Creating confusion
Digital payment systems' tipping prompts have also generated new confusion around when it's appropriate to tip, upending the old consensus that tips are generally owed in exchange for exceptional service.
A recent study from Pew Research Center found only 34% of Americans say it's easy to determine whether to leave a tip. These days, many aren't even sure what tipping is for.
"Is tipping something we're supposed to do because society tells us to do it? Is it something we're supposed to do because we're obligated to the server to do it? Is it something we do because we choose to do it?" Pew Research Center Drew DeSilver told CBS News.
Of the 38% of Americans who do plan on handing out holiday bonuses, 17% say they'll make donations to charities. The category of worker most likely to receive a holiday tip includes mail carriers, package delivery and newspaper delivery people, with 12% of consumers saying they'd tip these workers, according to the Achieve survey.
Only 6% of consumers said they would tip their hair stylists and beauticians, followed by 5% who said they would tip their garbage collectors.
According to a recent survey, a significant decrease in the number of Americans who would tip their housekeepers, childcare providers, pet sitters, fitness instructors, and building staff has been observed.
