Has the tipping culture gotten out of hand? When it's okay to skip the tip

We all know the following situation: you just ordered a cup of coffee and after you tap your credit card, the payment kiosk spins around and shows the suggested tip amount of 25% to 30%. What are you doing?

Today, many Americans feel confused about tipping protocols. This is evident from opinion polls released by Pew Research CenterOf the nearly 12,000 American adults, only about a third say it is extremely or very easy to know whether and how much to tip for various services.

While there’s no definitive method for determining tipping rules, here’s what you need to know about the history of tipping, the recent developments that have changed tipping culture, and how you can approach tipping in the future.

Key Takeaways

Employees who earn more than $30 monthly in tips are considered tipped employees, and often receive a base wage of just $2.13 per hour.
Digital payment systems have increased the pressure on tipping, leading to “guilt tipping” in situations where tips may not be expected.
Tipping is now more common across several services, with many Americans unclear about etiquette, contributing to a rise in tip amounts – so-called ‘tip inflation’.
Tips are not required for counter service, and extras are not required if there is an automatic tip. If the service is bad, it’s fine to tip less, but try not to tip below 10%.

The evolution of tipping culture

A post-Civil War origin

Tipping in the US has a complex history. It was largely unknown in the US before the Civil War, but gained traction when wealthy Americans returned from visits to Europe and brought the practice home. Tipping is also said to reflect a darker aspect of American history, as it grew as the restaurant and hospitality industry began hiring newly emancipated black women and men. They were often not offered wages, but instead relied on tips to support themselves.

The rise of technology

Requests for tips have increased dramatically with the advancement of technology, as the ability to tip has become more common. Digital payment systems use design principles that influence tipping behavior. For example, clicking “no tip” on a kiosk feels more challenging than deciding not to leave an unsolicited tip. This has led to a phenomenon known as ‘guilt tipping’, where consumers feel pressured to leave a tip.

The role of the COVID-19 pandemic

Many restaurant and hospitality workers struggled during the height of COVID-19. So tipping rates were increased to help support these industries. According to an analysis of tip data by the National Library of Medicine, tips per order fell by $1.24 before the pandemic, bucking the previous negative trend.

Tip expectations do not appear to have diminished since the pandemic. This could explain why the tip amount has remained high in recent years, thought “tipflation‘by news media.

According to survey results from Pew Research, about 7 in 10 adults say tips are expected in more places today than five years ago.

Who is considered a tipped employee?

Today, many service workers rely on tips for their livelihood. The Department of Labor considers a worker a “tipped employee” if they regularly receive more than $30 per month in tips.

Under federal law, employers of tipped employees only have to pay $2.13 per hour in direct wages, as long as that amount, combined with tips, meets the federal minimum wage. The employer must pay the difference if the total does not reach the minimum wage.

Some states have a higher minimum wage. For example, the tipped minimum wage in Alaska is the same as the standard minimum wage ($11.73 per hour as of 2024). Other states, such as Florida and Maine, set minimum wages that are higher than the federal mandate but do not match the state’s standard minimum wage.

Cities and towns may also have higher minimums in some areas. New York City has a tipped minimum wage of $10.65 (as of 2024), 65 cents higher than the state’s mandated tipped wage. And “quick service workers” in New York State earn the same minimum wage of $15 per hour, regardless of whether they are tipped or not.

Remark

Tips are a hot topic in the upcoming elections, as both presidential candidates propose exempting tips from taxes.

When should you tip?

When you work at a service providing institution

You can expect to tip in places like restaurants, bars, salons and hotels. This includes servers, bartenders, hotel clerks, delivery drivers, valet drivers and more. It is also customary to tip your hairstylist, nail artist and food delivery person.

The actual tip amount varies depending on the service, but restaurants generally follow a 15% to 20% rule. RealSimple offers tipping etiquette guide with specific suggestions on when and how much to tip.

For food delivery apps, a reasonable amount can be $3-$5 per delivery. If weather conditions are rough, consider adding a few extra dollars.

When should you consider skipping a tip?

When you pay for counter service

According to CNBC, counter clerks are not expected to tip because they typically earn a wage. However, tipping can be a thoughtful gesture, especially if you are a regular customer, as it can help build a positive relationship with the staff.

When high service charges or automatic tips are already charged

Sometimes restaurants already apply an automatic tip, especially for large parties. Since it’s already included, nothing else is typically expected to be added. With that in mind, if you had good food and service, an extra 5-10% tip is a nice way to show your appreciation.

If the service wasn’t good

If your expectations are not met, it is acceptable to tip less than normal. Some people may tip as little as 10%, but it is advisable not to go lower. Be aware of conditions beyond your server’s control, such as the kitchen running slowly.

Is it rude not to tip?

Unless the service is terrible, most etiquette experts recommend not skipping the tip for restaurant staff.

Which professions am I not allowed to tip?

You are not allowed to tip professionals who are paid a salary. This includes teachers, plumbers, lawyers and cable technicians.

How can I show appreciation if no tip is expected?

Employees, such as teachers, do not expect tips. However, there are other ways to show your gratitude. For example, consider giving a gift voucher around the holidays, or writing a handwritten card. And of course the verbal ‘thank you’ does not go unnoticed.

How do I know if a tip is already included?

When you look at your bill, it may be listed as a ‘service charge’ or ‘tip’.

The bottom line

Tipping culture in the US is shaped by history, economics, and evolving social norms. Changes in technology and a post-pandemic world have left many Americans unsure of what to do. However, researching and staying informed about these practices can paint a clearer picture of the shifting expectations. This ultimately allows us to help both customers and employees.