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Americans are tipping more

The average restaurant tip is now higher than it was before the recession began. And tip jars are popping up in previously unseen places.

By MSN Money Partner Oct 23, 2012 4:33PM

This post comes from Susan Johnston at partner site U.S. News & World Report.

 

U.S. News & World Report logoDespite lingering unemployment and other economic hardships in many parts of the country, studies show Americans are actually leaving higher tips. According to Zagat, the average restaurant tip has increased from 18% in 2000 to 19.2% in 2011.

 

Image: Tip (© Corbis/SuperStock)However, Americans are also dining out less since the recession (3.3 meals per week in 2006 compared with 3.1 in 2011).

 

Sherry Jarrell, a professor of finance and economics at the Wake Forest School of Business, says better tips may be partly a function of fewer -- and cheaper -- restaurant meals. "People may choose a cheaper option just because of the state of the economy, but they feel for the waitress or waiter and will go ahead and tip the usual amount even though the total bill has gone down," she says. "People are going out less often, so the few times they do go out, they feel more comfortable being generous."

 

Jarrell speculates that as more women pick up the tab, they may be more inclined to leave a higher tip. She says this is especially true if they've waitressed in the past and can empathize with the server.

 

For example, Alisa Bowman, a writer in Emmaus, Pa., sometimes tips more than 20% because she used to wait tables herself and she believes it's gotten her more attentive service. "My hairdresser does backflips to get me in when it's convenient for me, and the pedicure person occasionally gives me a freebie," Bowman says. "I get a lot of freebies, actually. People appreciate appreciation."

 

She also recalls a cabbie whom she used several times during a conference in Sacramento, Calif., and the driver insisted on giving her a free ride after she'd tipped him well a few times.

Tipping practices vary by geography and context. The Zagat survey data from 2011 found that the average tip in New Orleans was 19.7%, compared with 18.6% in San Francisco and Seattle.

 

While tipping is common practice in restaurants throughout the United States, the standard is less clear in other settings, like sports stadiums, casinos, taxis and spas. Richard Seltzer, a professor of political science at Howard University and co-author of "Gratuity: A Contextual Understanding of Tipping Norms from the Perspective of Tipped Employees," conducted interviews with hundreds of tipped employees and found that tipping depends on the context of the service.

 

"You'll get a tip if a massage was to help (the person) relax, but if they're getting a massage for a medical condition, you won't get a tip," he says.

 

Seltzer also found that tipping practices differ by economic class. More affluent customers tipped less for pizza delivery but gave higher tips to personal-care providers such as hair stylists. "Perhaps wealthier people felt more of a need to tip people they would see on a regular basis," Seltzer speculates. "A number of respondents did say they thought wealthier people did not tip well because they did not understand what it was like to live on tips."

 

Moreover, tip jars are popping up in previously unseen places. Steve Dublanica, a former waiter and author of "Keep the Change: A Clueless Tipper's Quest to Become the Guru of the Gratuity," describes the phenomenon of such newfound tipping as "tip creep." Tip jars are becoming more common fixtures in coffee shops, newsstands, pizza parlors and hot dog stands. Even some blogs and websites have online tip jars.

 

However, Dublanica points out that online tip jars lack the social pressure of tipping in a coffee shop or other public place where someone actually sees you drop change into the jar. His website had a tip jar at one point, but he found that it barely brought in enough money to cover his website hosting fees.

 

Meanwhile, brick-and-mortar store employers have tip jars on the counter because they allow workers to earn more money without employers having to boost hourly rates. A large number of baristas, valet drivers, waiters and others in the service industry rely on tips as part of their income.

 

But the rise in tipping expectations rubs some consumers the wrong way.

 

When Ben Nettleton tied the knot earlier this month, the Texas social media director was shocked by the tipping expectations associated with weddings. "In addition to the 20% gratuity that will be included on the bill, I'm told an additional 'here-ya-go' cash tip will be expected," he says, adding that he once earned tips himself as a Segway tour guide in San Francisco.

 

"The level of expectation is out of control and is an obese monster that continues to grow," he says. "Ten percent, then 12%, then 15%, then 18%, then 20%, and I've even seen 25% in some cases. Who is deciding this?"

 

Despite customers' irritation, Dublanica says tip sizes can play a role in the quality of service people receive. This is especially true at restaurants, he says. "Bad tippers may find they never get the reservation they want," he says. "On Valentine's Day, good tippers get good tables. Bad tippers are lucky if they even get in the door."

 

More on U.S. News & World Report and MSN Money:

5Comments
Oct 23, 2012 5:43PM
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Persons accept service positions with the expectation of tips and then bemoan that customers don't realize how hard it is to get along if tips aren't substantial.  I see no reason that compensation should be based on guilt, charity, or even gratitude. Maintaining a low paid staff with the expectation of tips is just a method to hide the true cost of a meal or service and to ensure the management receives the fixed price and the service person may just hope they get theirs. Charge what it costs (food and service) so everything is up front and stop all this "tipping" foolishness. Tipping is no longer a reflection of the quality of service provided , but rather is a misguided social requirement to justify and subsidize improperly paid employees.
Oct 25, 2012 4:20AM
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Tipping should be illegal
Tipping is corruption
Tipping is bad for a society
Tip seekers are sofesticated beggars who don't want to work hard
Tip endorsers are greedy restaurant owners who dont want to pay their employees
Tip seeking waiters are blackmailers, If you dont tip good, they spit in your food and give poor service
Tip is some thing that a selfish person offers to a greedy person in return for a better service to him in respect of the others who has to suffer.

A waiter is tipped so the tipper gets fast and excellent service in respect of the others who have to suffer
A postman is tipped so the tipper gets his mail more safely in respect with others who can suffer
A politician is tipped so the businessman's tender is passed
A cop in NY is tipped so the tipper can keep doing his crime or violation worry free

There are millions of Americans who toil for hours in factories and receive minimum wage at the end of the day (no one cares to give them a tip). History

speaks tip seekers earn plenty and never disclose their income to IRS. Shame on tip seekers. They need to do some real work like others do and see how

sweet is the pay check instead of taking the shortcut and cheating the IRS.

I wonder who was that idiot who increased tipping percentage from 10% to 20% and now 25%. Agreed inflation can increase the amount itself but how can

you increase the percentage? percentage should remain the same. I am sure there are maybe restaurant owner who earn just about 50% profit on the bill

where as tip seekers expect half the profit of his employer without any investment. Bottomline is  the menu price must have all included.

Nov 15, 2012 12:30AM
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I refuse to put money in tip jars. In fact, I will go out of my way to avoid an establishment that has one. It says more about how they treat their employees than any other action they could show me.
Oct 23, 2012 7:25PM
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Back when I owned a restaurant I can tell you, most women are lousy tippers.
Oct 23, 2012 6:47PM
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Economy is better ppl tip better.  So tell me again what a bad job the President is doing.
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