COVID-19 pandemic Tipflation is often said to have been incited during the
COVID-19 pandemic, where
in the United States, numerous measures introduced by federal and state officials such as
stay-at-home orders forced the closure of many smaller businesses, especially restaurants. Customers have been noted during the pandemic to tip generously to smaller businesses and lower-wage workers.
Role of tech companies and social pressure Tipflation further traces its origins to the increase of digital payment systems and the creation of digital
tip jars. Many reports on the increased phenomenon of tipflation involves the technology developed by fintech firms such as
Square (a subsidiary of
Block),
Toast, and
Clover (a subsidiary of
Fiserv), the three largest makers of digital tip software. All three companies manufacture integrated hardware and software services which not only have expanded the ability for small businesses to accept payments by
card or contactless, but at the merchant's discretion come with prompts to add gratuity. Guilt-tipping is often coined to describe the social pressure that this situation creates. Etiquette researchers, such as Diane Gottsman, has phrased this phenomenon as consumers being "overwhelmed by the little piece of technology looking them in the face". An article from
Vox also has raised concerns that tips collected through digital payment systems can also be subject to digital payment systems' fees as part of the overall revenue collected.
Starbucks labor unions Starbucks in particular has been seen as a battleground for the changes in American tipping culture. As a concession to its baristas,
who began to organize in 2022, the Seattle-based coffee company started to offer tips to its baristas within the app and at payment terminals. Customers who pay at the register are now required to either select a tip amount on a card processing device, or for mobile orders, can add tips later on. The tipping system implemented by the company and baristas places all tips within a single collection pot, divided up equally to all employees who currently work during the time that the tip is received. The new systems have been widely criticized by customers, slamming the system as "awkward", intrusive, and likewise to digital payment systems, being intrusive and severely increasing the social pressure to tip. Additionally, these credit card tipping benefits are only being provided to Starbucks stores which have not unionized, further dividing the company's baristas.
"New" tipping culture The culture of tipping has been described as "radically different" and similar phrasing by American media outlets, beginning mostly in 2023. Previous customary tipping amounts have further been escalated, with 15% tips being exchanged in favor of occasionally 30% tips. Some occupations which are now widely requesting gratuities are
ridesharing drivers like those for
Uber and
Lyft, food delivery drivers, and baristas at coffee shops.
Generational differences toward tipping Beginning in the 1980s, the
economy of the United States began to
shift from a manufacturing based economy to a
service economy. By 2021, the service sector contributed 77% of the nation's GDP. This change has resulted in younger generations entering service jobs at higher numbers compared to prior generations, contributing to differing views on tipping.
Millennials on average leave larger tips at 26% or higher while Gen Z tips more frequently at 51% of the time compared to 42% for Baby Boomers and Gen X. With the average age of workers in the service industry being 29 years old, Millennials make up 49% of the service workforce while the
National Restaurant Association estimates that 82% of Zoomers' first jobs are in restaurants. The tipping behavior among younger generations is believed to be due to their overrepresentation in service jobs compared to prior generations. Their understanding of the jobs and the challenges that workers face in these jobs prompts them to be more sympathetic toward workers and causes them to tip larger and more frequently than prior generations. == Tipping fatigue and calls for reform ==