WalletHub Survey: Tipping Is Out of Control

Tipping has gotten out of control, according to nearly three in four Americans who took part in WalletHub's Tipping Survey. Approximately 78 percent think automatic service charges should be banned.

"More and more types of establishments are starting to ask for tips, and suggested tip amounts are growing higher, so it’s understandable that people are frustrated, especially when this issue comes alongside inflation,” said Cassandra Happe, WalletHub Analyst. “Tipping is so ingrained in our culture that half of Americans say they often leave a tip due to social pressure rather than good service.”

There's a fine line when it comes to automatic charges, Happe pointed out. 

“Automatic service charges change tipping from something that’s highly expected but still optional to something that’s mandatory, which can frustrate customers. On the other hand, businesses argue that these charges are necessary for things like large parties at restaurants, as getting stiffed on a tip can cause a server to lose out on a huge amount of income.”

Technology is having an effect on tipping practices. The survey found that more than one in four Americans tip less when they’re presented with a tip suggestion screen, while 22 percent end up tipping more.

"For half of people, being presented with a tip suggestion screen has no impact on how much they tip,” said Happe. “Given the fact that the vast majority of people tip the same or more when they see a tip suggestion screen, employers likely will see this as a positive and keep the practice in place. If the share of people tipping less or even shopping less at certain establishments grows, perhaps we will see businesses rethinking suggesting tips.”

Among the other survey highlights are:

• 64 percent of people think a tip is something you should give when you feel like it instead of something you always have to give.
• Nearly three in five Americans think businesses are replacing employee salaries with customer tips.
• More than one in four Americans tip less when they’re presented with a tip suggestion screen.
• Half of Americans say they often leave a tip due to social pressure rather than good service.