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Whether eating in a restaurant or buying coffee at a drive-through, American consumers often have to decide whether or not to tip. And the rise of tip screens at every type of checkout has made this tipping decision even more common. But who should you really have to tip, and how much?
To help guide your own tipping decisions, our team at FinanceBuzz surveyed U.S. consumers to find out who they tip, the amount they tip, and whether service experience affects the amount they give.
Key findings
- If a waiter brings their food, people tip 21% on average.
- For counter service, people tip 10% on average.
- On food delivery, people tip 16% on average.
- For rideshares, like Uber and Lyft, people tip 18% on average.
- The grand majority of people (90%) regularly tip waiters, but only 48% of people tip for counter service.
- Respondents admitted they tip less when paying via app, self-checkout, or tip screens at the register.
- Conversely, consumers report they tip more when paying with cash or while being watched by a server.
- Roughly half of U.S. adults (49%) say the effects of inflation have made them start tipping less.
Who gets tips and what form do they take?
While traditional tipping etiquette says that customers should tip service workers, that doesn’t mean all people do.
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Waiters receive tips most often — 90% of customers regularly give a gratuity. Similarly, 80% of people say they regularly tip food delivery drivers.
Interestingly, respondents said they tip rideshare (e.g., Uber and Lyft) drivers only 67% of the time.
Despite being service workers, mechanics and car repair workers receive tips least often. Just 27% of people tip for those services.
How are service workers tipped?
To tip, customers can either tip a percentage based on the final bill, or they can give a predetermined amount of money regardless of the total cost. Which method people choose depends on the context.
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Nearly 75% of people give a percentage of the bill when they tip on food services. That’s the most common of any industry.
When people tip for personal or transport services, a little over half of people choose to tip a percentage of the bill, while a slightly smaller portion tip a flat amount.
Home services, such as gardening and housekeeping, is the only industry where customers are more likely to tip a flat amount than a percentage of the bill.
How much do people tip for different services?
Since customers often prefer to tip a percentage of their final bill, we asked what percentage people tip for different kinds of services.
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Waiters receive the highest percentage of the bill, as customers tip 21% of the bill on average when waiters serve them while dining out. But as the level of service goes down, so do the tips. Food delivery drivers receive just 16% on average, and consumers report tipping just 10% on average for carryout and counter service.
Factors impacting how much people tip
In the past, you’d pay for dining out after a waiter brought a check to your table. Now there are a variety of new ways for diners to order and pay for their food. But do different payment methods impact tip amounts?
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Two old-school payment methods are most likely to increase the amount people tip. More than a quarter of people (26%) say they leave a bigger tip when the check is brought to them at their table by a waiter, while nearly the same percentage (25%) say they tip more when they pay with cash.
Self-checkout systems like the ones in grocery stores have started to pop up in restaurants and coffee shops as well. These payment systems have also started asking customers if they would like to leave a tip, which doesn’t sit well with many people.
One-third of people said they will tip less if they encounter these kinds of machines while dining out.
But nothing impacts a tip more than the quality of service customers receive. 73% of people said they leave a bigger tip when they’ve had excellent service while dining out, while 70% said they leave a smaller tip if the service is poor.
Are people tipping less due to the effects of inflation?
Inflation has been in the news the last few years, with the inflation rate reaching as high as 9.1% in June of 2022 (the highest rate since 1981). Many people are still trying to find ways to save wherever they can. For some, that means cutting down on tips.
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The nation is split almost exactly down the middle on this issue. About half of people say they still tip the same amount or more, but the remaining half of the population are tipping less than they normally would.
Tipping insights from the experts
Michael Lahr, Ph.D.
Distinguished Research Professor, Emeritus — Bloustein School of Planning and Public Policy
Rutgers University
- Have you noticed any changes in the way people are tipping due to the effects of inflation?
In the main, not so much. What's happening more is the people who go out to eat are still the people who have deeper pockets. The people who are suffering the most aren't going out to eat, so they're not paying those tips.
There have also been some experiments on tipping which have found people don't mind tipping when the bill is large, but they mind tipping when the bill is small. So if you get a $3 to $4 cup of coffee, ordinarily you might leave 50 cents, maybe even 15%. I used to go into a place like a deli, get a cup of coffee, and leave. Maybe after three or four times I’d leave a tip.
Now everything is cashless because of COVID. When you're signing on the iPad, you're given options which now start at 18%. If I wanted to leave 10%, I have to hit “other,” or I can give none. And this is happening in front of the waitstaff, and often there’s this strange pressure that is unfortunate.
- Some consumers feel tips are a way for business owners to shift labor costs to consumers. In a business sense, does this hold true?
Well, for sure that's true. But you have to realize the best waitstaff prefer to be tipped. They've moved to the best restaurants where they can make $200 to $300 a night on tips alone. They're probably also getting a decent wage. There, everybody's motivated. Everybody's motivated to some degree to tip. The customer likes it because they almost think they're getting one [over on someone] when they can show how much they’re putting down to the other people at the table. If the waiter is paid a base wage and they're given a nice tip, then that's another way for them to be rewarded for the quality of their work.
There’s a whole other problem with tip sharing though. Kitchen staff don't get any tips at all, and they get paid less than the waiters. Sometimes they might get minimum wage, and the owner is (technically) not allowed to touch anything. But of course the owner's the one who collects the tips. If the business is cash based, there's no way to check if the employer is distributing all the tip monies to the workers or not. Owners are not supposed to keep any at all. This is to say there are things they say by law are supposed to happen, but there's no way we can assure that.
- Do you have any sense as to why tipping is more common in the U.S. than in other countries?
It became law that one could give a lower-than-minimum wage in 1966. So that was something that reinforced what was already happening, because after World War II there was no longer tipping in Europe. France was first; they made it overt and made tipping undesirable.
In China and some other places, like Japan, it's acceptable but really discouraged because they're thinking their staff are too proud. They shouldn't be bribed. So there are certain countries where you don't tip. If you do, you are almost offending the waitstaff.
Answers are from a transcribed video interview and have been slightly edited for clarity and brevity.
Jaime E. Peters, Ph.D.
Assistant Dean of Accounting, Finance & Economics and Assistant Professor of Finance — John E. Simon School of Business
Maryville University
- Have you noticed any changes in the way people are tipping due to the effects of inflation?
Inflation has put a strain on people's budgets, but people are traveling again, going out to restaurants, and going to hair salons again. Demand is up for these tipping-related services despite inflation. Inflation means that items are more expensive but so far that hasn't seemed to change tipping behavior to date. In fact, because of other forces, we are seeing more, not fewer tipping events.
- Some consumers feel tips are a way for business owners to shift labor costs to consumers. In a business sense, does this hold true?
I understand that feeling and, in a way, it is sort of correct. We can look at non-tipping cultures to determine it. If we stopped tipping, the cost of labor would shift from being based on average tipping to being built into the cost of the food/service that the customer is consuming. In the end, the customer ends up paying for the labor. However, it's important to note that the cost of labor is not evenly distributed in a tipping culture. Generous tippers bear the greater labor cost in our system.
- Do you have any sense as to why tipping is more common in the U.S. than in other countries?
Tipping was originally imported to the U.S. from Europe. There are several storylines talking about where tipping came from. What's interesting is that the U.S. took it to another level. Some theorize that it's a result of social norm pressure, others believe it's a utility argument to ensure good service. I personally subscribe to the theory that the U.S. has its tipping culture because we codified it in the tax code and business law. Our laws surrounding minimum wage and tipping are starting to change on a state-by-state basis, so it's an exciting time for people who study it as we can see if behavior will change.
Answers have been slightly edited for clarity and brevity.
“Tips” for managing your money
Whether you’re a service worker or a customer, here are our best practices for managing your money while dining out:
- Traveling? Tip well and earn rewards. With the summer travel season ramping up, use one of the best travel credit cards to pay for your hotel stay and earn rewards while you’re on vacation.
- Earn points while dining out. Waiters aren’t the only ones who can earn a little extra when you go out to eat. Savvy diners maximize points, rewards, and cash back when they use one of the best credit cards for dining to cover the check.
- If you’re earning tips, manage your finances. If you rely on tips alongside your wages, learn how to manage your money so you can plan for variable income.
- Set a budget. Coming home after a good tip day is great, but getting your budgeting habits squared away will help you make the most of your money.
Methodology
FinanceBuzz surveyed 1,000 U.S. adults in May 2023. Respondents who said they do not use services relating to specific jobs or industries were excluded from final results and calculations throughout this analysis. (For example, people who do not use pet sitters at all were not included when calculating how often people said they tip for those services.)
2022 results
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