Tables at Mother Bear's Pizza Campus.
(Devan Ridgway, WFIU/WTIU News)
Consumers across the country have reached their tipping points.
As many businesses implement their own tipping systems, the option to tip seems unavoidable. Seventy-two percent of U. S. adults say tipping is expected in more places now than it was five years ago, according to a recent Pew survey.
For many, tipping fatigue has set in.
Jennifer Watkins, a Ph.D. candidate at Indiana University, has worked in the restaurant industry for most of her adult life, primarily as a server, and also as a manager. Now, she focuses her research on restaurants.
She said when the pandemic started, people were more willing to tip essential workers.
“(During the pandemic) people were really willing to pay whatever they had to pay to get things delivered to them when they were isolated, and they couldn't leave the house,” Watkins said.
But nearly four years after the start of the pandemic, the practice has stuck around.
One reason, Watkins said, is because of the online payment options that were implemented during the pandemic. These payment methods, oftentimes on touch screen devices like iPads, have an automatic tipping screen at the end of each transaction. Recently, they are in venues that traditionally did not expect gratuities.
“Say you order food from your favorite restaurant; There's going to be a service charge from the third-party company, they are also going to inflate the price of the food and then on top of that, they're expecting you to tip,” Watkins said. “It's not just that people are tired of paying the tip fee. They're tired of paying three or four fees.”
But, according to Watkins, technology isn't the only thing to blame. Food prices have increased almost 6 percent in 2023, according to the United States Department of Agriculture.
“I think that a lot of restaurant customers don't understand how much the food costs,” Watkins said. “There's a lot of criticism about restaurant owners basically farming out their wages. They're making the customer pay it instead of doing it themselves, but that has a lot to do with the fact that customers are not willing to pay what it actually costs to make a meal.”
It’s a problem that many restaurant owners are trying to combat.
In Bloomington, Switchyard Brewing Co. implemented a “no tip” policy before it closed permanently in January. Instead of expecting customers to tip their servers, service charges were added to the price of the bill automatically.
But getting rid of tipping isn't that easy, Watkins said.
“A lot of restaurants have tried to get rid of the tip wage, they've tried to just raise the prices of their food and it hasn't worked,” she said. “Customers don't want to pay that price.”
Ray McConn, president of Mother Bear’s Pizza, understands the frustration. Without tipping, restaurants would have to raise their prices to a point most customers wouldn't be willing to pay, he said.
“All of a sudden you're adding several $100, maybe several $1,000 a week on to your cost. If you're not raising prices to cover that, then you've made no profit,” McConn said. “(Tipping) is a part of the industry that is ingrained in people's minds. You go to a restaurant and you tip, whether it's $2, or $22.”
In Indiana, tips make up a large part of tipped workers’ pay. Employers can pay workers as little as $2.13 per hour — much less than the minimum wage — if the tips they receive bring them up to a baseline salary.
Several fast food companies, however, pay their employees around $15 an hour, nearly seven times more than most restaurant servers’ hourly salaries. McConn said because of this big difference, customers should tip more generously at places where workers count on tips to make a decent living, like sit-down restaurants.
“The people who really need tips are the ones that deal and take care of the customers directly,” he said. “If a worker is being paid $18 an hour, they don't really have to worry about tips. They're well taken care of at that point.”
