Americans Are Exhausted by Tip Culture: Kiplinger Economic Forecasts

The pandemic changed many ways businesses operate, and one big difference is the option to tip during most customer-facing interactions. To help you understand what is going on and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...

Many Americans have reached a tipping point when it comes to gratuities. Two-thirds of U.S. adults have a negative view of tipping, with 30% saying that tipping culture has gotten out of hand, according to a recent Bankrate survey. 41% say businesses should pay employees more rather than relying on tips, though only 16% say they’d pay more if tipping were eliminated. Nearly one-third are particularly annoyed with pre-entered tipping suggestions on in-store screens or smartphones when paying. 

Inflation and general economic unease are likely causes for making folks stingier. But there’s also a trend of fewer people tipping every year. Meanwhile, digital tip requests have expanded to more fast-food joints and elsewhere. As consumers are faced with a variety of new interactions that require gratuities, 15% of people in the Bankrate survey reported feeling confused about how much to tip.  

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Still, 44% of adults who dine at sit-down restaurants say they tip 20% or more. The most generous generation? Baby boomers. 57% typically dole out 20%.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

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