• by Teresa Buyikian , November 15, 2024

Tip creep: That’s the term many consumers are using for what has become standard practice when paying for a meal or product/service on any sort of tablet or digital checkout, where the last-pop up screen asks for a tip. These generally have boxes for the tip percentage, which tend to start at 15% and go up from there.

The tip request goes through no matter what you have purchased -- maybe even just a cookie, like one Starbucks customer, who ranted on Reddit when she was asked via screen to tip more than the actual cost of said cookie upon checkout. Or the man in a recent Reuters article who was asked to tip for a sandwich he bought at an airport self-serve kiosk.

The group the cookie user complained in is r/Tipping: A Place to Discuss Tipping Culture, which has amassed over 31,000 members. 

But it appears consumers have had enough and are experiencing what media now refers to as “tip fatigue.” A recent survey by restaurant tech company Popmenu revealed that on average, U.S. consumers have tipped around “40 times when they didn't think it was necessary.” 

A recent report on WalletHub said, “74% of Americans say tipping has spiraled out of control, with 57% saying businesses are just replacing salaries with tips and 27% actually tip less when presented with a suggestion screen.”

And the “fatigue” is palpable. Per the Popmenu study, in 2024, 38% of consumers say they tip restaurant servers 20% or more, which is down from 42% of consumers last year, and 56% in 2021. Also this year, 19% of consumers say they tip restaurant delivery drivers 20% or more. This is down from 26% of consumers last year and 38% in 2021.

How fast is tipping coming to QSRs? Many fast-casuals have had a tip screen for years. And according to a June 2023 report in The Hill, “An industry survey from Toast, a management-software firm, found that roughly half of quick-service restaurants, such as Starbucks and McDonald's, now offer a tipping option, up from 38 percent in 2020. Some fast-food customers bristle at tip prompts.”

As tip fatigue sets in, which also may impact consumers’ brand perception, what should QSRs do that are considering or already have added a tip screen upon checkout?

Maybe we should look to our neighbors to the north for some further guidance. A recent Canadian survey by the Narrative Research and the Logit Group on tipping found a whopping 71% of those surveyed did NOT feel tipping was appropriate at fast food restaurants.

“While tipping can express appreciation for good service, its widespread adoption raises concerns for both consumers and workers. This can influence consumers’ perception of service quality, potentially causing dissatisfaction with subpar experiences,” said David M. Pearlman,  founding director of the Hospitality Management Program, Neil Griffin College of Business at Arkansas State University, in the WalletHub survey. “There is a growing debate about replacing tipping with a system that offers …greater transparency for customers. An option involves implementing a service charge, a transparent fee added to the bill and distributed among staff. This approach could offer consistency in income for workers and potentially lower overall costs for customers. Finding a solution that balances fairness for workers, transparency for customers, and financial viability for businesses requires careful consideration of various perspectives and potential impacts.”