Americans are annoyed with 'tipping culture' and are leaving fewer gratuities

The size of tips left by American restaurant-goers has shrunk in recent years. 

Across the country, the overall tipping average for restaurants came in at 18.8% in the third-quarter of 2024, Toast data based on U.S. restaurants that use its systems showed. 

While that rate remained steady from the prior quarter, it has declined from 19% in the third-quarter of 2022 and from 19.2% in the same period in 2021, the data indicated. 

For full-service restaurants specifically, the average rate for tips was 19.3%, lower than the 19.6% rate seen in 2022’s third-quarter and the 19.8% tracked the year before that, per Toast. 

The percentage that people typically tipped when visiting quick-service restaurants in America has experienced a decrease as well. It hovered at 15.9% in the third-quarter of 2024, marking a decline from 16.1% in the third-quarters during the two years prior to that and 16.5% in 2021’s third quarter. 

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Tipping rates for both types of restaurants in 2024’s third quarter were also down compared to the same period in pre-COVID 2018 and 2019, Toast data showed. 

Some experts attributed those decreases in average restaurant tipping rates, earlier reported by the Wall Street Journal, to "tipping fatigue."

"Consumers have reached something called ‘tipping fatigue,’" Ted Jenkin, co-founder of oXYGen Financial told FOX Business. "Americans do want to tip a job well done, but they don’t want to be told what they should tip while someone watches them enter their tip. It’s that tipping pressure of the automated systems that is creating this counterculture of people wanting to tip less." 

Meanwhile, Bankrate senior industry analyst Ted Rossman said he has seen a "noticeable downturn" in the frequency of tipping "over the past few years."

In a survey released June 2024 by Bankrate, 67% of U.S. adults who ate at sit-down restaurants said they always leave a tip for their servers, representing a 8-percentage-point drop from three years ago.

That phenomenon hasn’t been exclusive to restaurants, according to Rossman. 

STATES WHERE PEOPLE GIVE THE BIGGEST TIPS

The share of American adults giving tips every time to hairstylists, food delivery people, baristas and certain other service workers has declined between 2021 and 2024, Bankrate’s survey showed. 

For baristas, the share went from 23% in 2021 to 20% last year. Forty-one percent "always" tipped their taxi or rideshare drivers in 2024, a decrease from 48% in 2021, according to the survey. It also found the share of people tipping hairstyles every time dropped 8-percentage-points over the same period. 

Rossman pointed to inflation impacting American’s wallets as the "main explanation" but noted other things have been at play as well, leading to "tip fatigue."

"Many people are annoyed with tipping culture," he said, adding that 59% of American adults hold "at least one negative view" about tipping. 

"There has been a lot of tip creep in recent years. As in, being asked to tip in previously unconventional settings," Rossman also said. "Technology has enabled this, too. Apps and payment screens are asking for tips in more obvious ways than an old-fashioned tip jar. You don’t have to go out of your way to put bills or coins in a cup anymore. Now you have to go out of your way not to tip, hitting zero on a pre-entered tip screen with the potential awkwardness of the cashier and other customers looking at you."

The coronavirus pandemic also affected tipping, according to the Bankrate senior industry analyst.

It "briefly" resulted in a "groundswell of appreciation for service workers" and contributed to "tip creep that hasn’t gone away," he said.  

Rossman told FOX Business businesses are also "wary of raising prices more than they already have, so they look to tipping as a hidden surcharge to funnel more money to their workers without having to foot the bill."

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At restaurants, non-optional gratuities and service fees have cropped up more in recent years,  The Wall Street Journal reported. That, according to the outlet, has prompted smaller tips from diners, and so have high menu prices.

A SpotOn survey published in May indicated the tipping expectations of restaurant industry workers varied, with more than one-third of respondents reporting 15% tips were the "minimum percentage" they expected "based on service." About 28% expected patrons to give them 14%, while 11% looked for 20% and 8% wanted 18%, it found.