(CNN) – A new checkout trend is spreading across America, making for an increasingly uncomfortable experience: digital tip jars.
You order a coffee, an ice cream, a salad or a piece of pizza and pay by credit card or telephone. Then a member of staff standing behind the counter spins around a touch screen and pushes it in front of you. Some suggested tip amounts will appear on the screen – typically 10%, 15%, or 20%. Often there is also the option to leave a custom tip or no tip at all.
The employee is directly opposite you. Other customers stand behind, waiting impatiently and looking over their shoulder to see how much they are tipping. And you have to make a decision within seconds. Oh god the stress.
Customers and employees today are confronted with a radically different tipping culture than just a few years ago – without clear norms. Although consumers are used to tipping waiters, bartenders, and other wait staff, tipping a barista or cashier may be a new phenomenon for many shoppers. This is being driven in large part by technological changes that have allowed business owners to more easily shift the cost of compensating workers directly to customers.
“I don’t know how much to tip, and I’m studying that,” said Michael Lynn, a professor of consumer behavior and marketing at Cornell University and one of the leading researchers on tipping habits in the United States.
Adding to the changing dynamic, customers have been encouraged to tip generously during the pandemic to keep restaurants and shops afloat, raising expectations. Tips for full-service restaurants are up 25% year over year last quarter, while tips at quick service restaurants are up 17%, according to Square’s data.
The shift to digital payments also accelerated during the pandemic, prompting stores to replace old-fashioned tip trays with tablet touchscreens. But these screens and digital tipping procedures have proven to be more intrusive than a low-pressure tip jar with a few bucks in it.
Customers are overwhelmed by the number of places they now have the option to tip and feel pressured about whether to add a tip and how much. Some people purposely walk away from the screen without doing anything to avoid a decision, say etiquette experts who study tipping culture and consumer behavior.
Tipping can be an emotionally charged decision. Attitudes towards tipping in these new environments vary widely.
Some customers still tip. Others feel guilty if they don’t tip, or embarrassed if their tip is stingy. And others refrain from tipping a $5 iced coffee, saying the price is already high enough.
“The American public feels that tipping is out of control because they’re experiencing it in places they’re not used to,” said Lizzie Post, co-president of the Emily Post Institute and great-great-granddaughter of his namesake. “Moments when a tip isn’t expected make people less generous and uncomfortable.”
Starbucks this year introduced tipping as an option for customers paying with credit and debit cards. Some Starbucks baristas told CNN that the tips add extra money to their paychecks, but customers shouldn’t feel obligated to tip every time.
A barista in Washington state said he understands when a customer doesn’t tip for a filter coffee order. But when he makes a custom drink, after spending a long time talking to the customer about exactly how it’s going to be made, “I’m a bit disappointed if I don’t get a tip.”
“If someone can afford Starbucks every day, they can afford to tip on at least some of those trips,” added the employee, who spoke on condition of anonymity.
“Un-American”
The practice of tipping seems ubiquitous today, but the practice has a rich history in the United States.
Tipping became widespread after the Civil War as an exploitative measure to keep the wages of newly freed slaves in service jobs low. Pullman was most notable for its tipping policy. The railroad company hired thousands of black porters, but paid them low wages and forced them to rely on tips for a living.
Critics of tipping argued that it created an imbalance between customers and workers, and several states passed legislation to outlaw the practice in the early 20th century.
In The Itching Palm, a 1916 diatribe about tipping in America, writer William Scott said tipping was “un-American,” arguing that “the relationship between a man who tips and a man who tips assumes is just as undemocratic as the master-slave relationship.”
But tipping for service workers was essentially legislated by the Fair Labor Standards Act of 1938, which created the federal minimum wage that excluded restaurant and hospitality workers. This allowed the tipping system to spread to these industries.
In 1966, Congress introduced a “lower minimum wage” for tipped workers. The state minimum wage for tipped workers has been $2.13 an hour since 1991—lower than the state minimum wage of $7.25—although many states require higher base wages for tipped workers. If a waiter’s tips don’t meet the federal minimum, the law requires the employer 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 working in a job that “normally and regularly” receives tips in excess of $30 a month to be eligible to be classified as a tipped worker. Experts estimate that there are more than five million tip workers in the United States.
Tips on tipping
How much to tip is entirely subjective and varies by industry, and the link between quality of service and tip amount is surprisingly weak, Cornell’s Lynn said.
He theorized that tipping of 15% to 20% became standard in restaurants due to a competitive cycle among customers. Many people tip to gain social recognition or in anticipation of better service. As tipping goes up, other customers start tipping more to avoid losing status or risking worse service.
The gig economy has also changed tipping norms. An MIT study published in 2019 found that customers are less likely to tip when employees can choose whether and when to work. According to a 2019 University of Chicago study, nearly 60% of Uber customers never tip, while only about 1% always tip.
What makes it confusing, Lynn said, is that “there is no central authority that sets tipping standards. They come from the bottom up. Ultimately, what people do helps determine what others should do.”
You should almost always tip workers who earn minimum wage, like waiters and bartenders, say lawyers and tipping experts.
When customers have the opportunity to tip at locations where workers earn an hourly wage, such as Tipping helps these workers supplement their income and is always encouraged, but it’s okay to say no.
Etiquette experts recommend that customers approach the touchscreen option the same way they would a tip jar. If they would leave change or a small tip in the glass, do so when prompted on screen.
“A 10% tip for takeout is a really common amount. We also see change or a single dollar per order,” Lizzie Post said. If you’re not sure what to do, ask the clerk if the store has a recommended tip amount.
Saru Jayaraman, president of One Fair Wage, which campaigns to end wage policies below the minimum wage, encourages customers to tip. But tips should never count against service workers’ wages, and customers must demand that companies pay workers full wages, she said.
“We must tip, but it must be combined with telling employers that tips must be on top of full minimum wage,” she said.