A new checkout trend is sweeping America with an increasingly awkward experience: the digital tip jar.
You order a cup of coffee, an ice cream, a salad or a slice of pizza and pay with your credit card or phone. Then, the employee standing behind the counter rotates around the touchscreen and slides it in front of you. There are some suggested tip amounts on the screen – usually 10%, 15% or 20%. There is also often the option to leave a custom tip or not tip at all.
The staff will be right in front of you. Other customers stand in the back, waiting impatiently, looking back to see how much you tipped. And you have to make a decision in seconds. Oh Lord, stress.
Customers and employees today face a very different tipping culture than they did just a few years ago — without any clear norms. While consumers are used to tipping servers, bartenders and other service personnel, tipping the barista or cashier may be a new phenomenon for many shoppers. It has been largely driven by technological changes that have made it easier for business owners to pass the cost of compensating employees directly to customers.
“I didn’t know how much you should tip, and I studied that,” said Michael Lynn, a professor of consumer behavior and marketing at Cornell University and one of the leading researchers on American tipping habits.
In addition to the changing dynamic, customers are being encouraged to tip generously during the pandemic to help keep restaurants and stores operating, raising expectations. According to Square, total tipping at full-service restaurants increased 25% in the most recent quarter compared with a year ago, while tipping at fast food restaurants increased 17%.
The shift to digital payments has also accelerated during the pandemic, leading stores to replace old-fashioned cash tip jars with tablet touchscreens. But those screens and digital tipping programs have proven to be far more intrusive than low-voltage cash tip jars filled with a few dollars.
Customers are overwhelmed by the number of places they now have the option to tip and feel pressured to tip if and how much. Etiquette experts who study tipping culture and consumer behavior say some people deliberately walk away from the screen without doing anything to avoid making a decision.
Tipping can be an emotional decision. In these new environments, attitudes toward tipping vary widely.
Some customers will tip anyway. Others feel guilty if they don’t tip, and embarrassed if their tips are stingy. Others refused to tip $5 iced coffee, saying it was high enough.
“The American public feels that tipping is out of control because they tip in places they’re not used to,” said Lizzie Post, co-chair of the Emily Post Institute and its great-great-granddaughter. “Moments where tipping is undesirable makes people less generous and uncomfortable.”
Starbucks introduced tipping this year as an option for customers paying with credit and debit cards. Some Starbucks baristas told CNN that tips add extra money to their paychecks, but customers shouldn’t feel obligated to tip every time.
A barista in Washington state says he understands if customers don’t tip their filter coffee. But if he makes a custom drink after spending time with customers discussing exactly how it should be prepared, “I do feel a little bit disappointed if I don’t get a tip.”
“If someone can afford Starbucks every day, they can tip at least a few of those trips,” the employee, who asked not to be named, added.
The option to tip seems to be ubiquitous these days, but the practice has a troubled history in the United States.
After the Civil War, tipping spread as an exploitative measure to drive down wages for newly freed slaves in service industries. Pullman is best known for its tipping policy. The railroads employed thousands of black porters, but paid them so little that they were forced to live off tips.
Critics of tipping argued that it created an imbalance between customers and workers, and several states passed laws banning the practice in the early 1900s.
In “The Itchy Hand,” a 1916 attack on American tipping, author William Scott said that tipping was “un-American,” and argued that “the relation between one who tipes and one who receives a tip is as undemocratic or master and slaves.”
But tipped service workers were largely brought into law by the Fair Labor Standards Act of 1938, which established a federal minimum wage and excluded restaurant and hotel workers. This has made the tipping system popular in these industries.
In 1966, Congress instituted a “minimum” wage for tipped workers. Since 1991, the federal minimum wage for tipped employees has been $2.13 an hour — below the federal minimum wage of $7.25, although many states require tipped employees to earn a higher base wage. If a waiter’s tips don’t add up to the federal minimum, employers are required by law to make up the difference. But that doesn’t always happen. Wage theft and other wage violations are common in the service industry.
The Department of Labor considers any employee who performs a job that “routinely and regularly” receives tips of more than $30 per month to be eligible to be classified as a tipped worker. Experts estimate that there are more than 5 million tipped workers in the United States.
How much to tip is completely subjective and varies by industry, says Cornell’s Lynn, and the link between quality of service and tip size is surprisingly weak.
His theory is that tips of 15 to 20 percent have become the norm in restaurants because of the competitive cycle among customers. Many people tip for social approval or to expect better service. If the tipping level increases, other customers start tipping more to avoid any risk of identity loss or service degradation.
The gig economy has also changed tipping norms. A 2019 MIT study found that customers were less likely to tip when employees had the freedom to decide if and when they worked. A 2019 University of Chicago study found that nearly 60 percent of Uber customers never tip, while only about 1 percent always tip.
Confusingly, says Lynn, “there’s no central agency setting tipping standards. They’re bottom-up. Ultimately, it’s what people do that helps determine what other people should do.”
Advocates and tipping experts say you should almost always tip workers earning minimum wage, like restaurant servers and bartenders.
Given the option of tipping at places like Starbucks where baristas are paid by the hour, such as Starbucks, etiquette experts say customers should exercise caution and take the guilt out of their decision. Tips can help these workers earn more and are always encouraged, but it’s okay to say no.
Etiquette experts advise customers to treat touchscreen options the same way they would treat tip jars. If they would like to leave change or petty cash in the jar, do so when prompted on the screen.
“Tipping 10 percent on food delivery is a very common amount. We also see change or a dollar per order,” says Lizzie Post. If you’re not sure what to do, ask the staff if the store has a suggested tip amount.
Saru Jayaraman, president of One Fair Wage, advocates for an end to the minimum wage policy and encourages customers to tip. But she said tips should never be included in service workers’ wages, and customers must demand that businesses pay workers full wages.
“We have to tip, but at the same time we have to tell employers that tip has to come first, not the full minimum wage,” she said.