Tipping, which used to be a gesture of gratitude for a service, has now evolved into an almost mandatory part of daily transactions in the U.S., from coffee shops to food delivery to even self-service kiosks. This shift has made consumers and workers uncomfortable about when and how much to tip, especially as the cost of living increases.
On the consumer side, tipping feels like an obligation, rather than an optional choice. As a coffee lover, I have been to multiple coffee shops here and back home in Puerto Rico. Nowadays, after checkout, when the service workers flip around their digital screen, it’s always asking the question of tipping or not, and usually with tips starting from 18%. On a visit to Starbucks, the creative tipping jars caught my attention. They use a creative marketing tactic consisting of two tip jars and an opinion question called “Tip Wars,” with questions such as iced or hot coffee or other types of questions with a “This or That” format.
As a student majoring in marketing, I know this can incentivize buyers to give tips by participating in the “Tip Wars” and being part of the trend. However, as tipping becomes a part of almost any transaction, many customers face tip fatigue. According to a survey from WalletHub, “64% of people think a tip is something you should give when you feel like it, instead of something you always have to give,” and “Three out of four Americans think tipping has gotten out of control.” For this reason, I believe that it will get to the point where people will begin to give less to no tips on some services, which can lead to greater income disparities.
On the other hand, tipping is a component of a workers’ income. However, the disparities in the tipping culture from the workers’ side also raise a question about the real issue, which is centralized in minimum wage, coupled with an expectation from consumers to give tips which compensate part of the worker’s salary. This results in wages that employers avoid having to pay.
Depending on the industry, tipping can create income disparities. In some businesses, especially restaurants, some individuals earn more tips than others. However, in many cases, this is based on the employee’s performance with the customer. In other businesses, tip pooling is used. This is a practice in which tipped employees all contribute to a tip pool and then divide all the tips equally among the workers at the end of the shift. In some sectors, workers can face emotional distress as their income is unpredictable and they rely on tips to compensate for a portion of their income. If their income is not met with tips, employers are required under federal labor law to pay them the remaining balance to meet the hourly minimum wage.
The tipping culture in the United States is so strong that I hadn’t questioned it much until I studied abroad in Spain last year. Tipping is not expected or required in Spain and other countries in Europe. If a tip is given, it can be seen as a bonus for exceptional service You pay for what you get, including the customer service and meal, drink or whatever you order. At first, it felt a little weird not to feel the need to give a tip for every coffee or meal, but later, with time, I got used to their culture. Although the American and European cultures have significant differences in salaries, opportunities and lifestyle, my experience abroad left me questioning: if a no-tip culture works for other countries, could the United Statesbenefit from reshaping how tips wages are handled in service industries?
