Is Tipping Culture Out of Control? When It’s OK To Skip the Tip

We are all familiar with the following situation: you just ordered a coffee, and after tapping your credit card, the pay kiosk swivels around to show the suggested tip amount of 25% to 30%. What do you do?

Nowadays, many Americans are feeling confused about tipping protocols. According to poll findings released by Pew Research Center, among nearly 12,000 U.S. adults, only about a third say it’s extremely or very easy to know whether or how much to tip for different services.

Although there’s no definitive method for determining tipping rules, here’s what you should know about the history of tipping, recent developments that have changed tipping culture, and how to approach tipping going forward.

The Evolution of Tipping Culture

A Post-Civil War Origin

Tipping in the U.S. has a complex history. It was largely unknown in the U.S. before the Civil War but gained traction as wealthy Americans returned from visiting Europe, bringing the practice back home with them. Tipping is also said to reflect a darker aspect of American history, as it grew when the restaurant and hospitality industries began hiring newly emancipated Black women and men. They often weren’t offered a wage but instead relied on gratuities to earn a living.

The Rise of Technology

The request for tips has surged with the advance of technology, as the option for tipping appears more frequently. Digital payment systems take advantage of design principles that influence tipping behavior. For instance, clicking “no tip” on a kiosk feels more challenging than deciding not to tip unprompted. This has led to a phenomenon known as “guilt tipping,” where consumers feel pressured to leave a tip.

The Role of the COVID-19 Pandemic

Many restaurant and hospitality workers struggled during the height of COVID-19. Thus, tipping increased to help support these industries. According to an analysis of tip data by the National Library of Medicine, while tip-per-order was decreasing before the pandemic, it increased by $1.24, thus countering the previous negative trend.

Tipping expectations haven’t seemed to lower since the pandemic. This could explain why the tipping amount has stayed up over the last few years, coined “tipflation” by news outlets.

Who Is Considered a Tipped Employee?

Today, many service workers rely on tips for their livelihood. The Department of Labor considers a worker a “tipped employee” if they regularly receive more than $30 per month in tips.

Under federal law, employers of tipped workers are only required to pay $2.13 per hour in direct wages as long as this amount, combined with tips, meets the federal minimum wage. The employer must cover the difference if the total does not reach the minimum wage. 

Some states set a higher tipped minimum wage. For example, the tipped minimum wage in Alaska is the same as the standard minimum wage ($11.73 per hour as of 2024). Other states, such as Florida and Maine, set tipped minimum wages that exceed the federal mandate but don’t match the state standard minimum wage.

Cities and localities may also set higher minimums in some areas. New York City has a tipped minimum wage of $10.65 (as of 2024), 65 cents higher than the state-mandated tipped wage. And “quick service employees” in New York state earn the same $15-per-hour minimum wage whether they’re tipped employees or not.

When Should You Tip?

When You Are at a Service-Based Institution

You should expect to tip in places like restaurants, bars, salons, and hotels. This includes servers, bartenders, hotel bellhops, delivery drivers, valet drivers, and more. It’s also customary to tip your hairstylist, nail artist, and food delivery driver.

The actual tip amount varies depending on the service, but restaurants generally follow a 15% to 20% rule. RealSimple offers a tipping etiquette guide with specific suggestions about when and how much to tip.

When To Consider Skipping A Tip

When You’re Paying For Counter Service

According to CNBC, tipping isn’t expected for counter workers since they typically earn a wage. However, leaving a tip can be a thoughtful gesture, especially if you’re a regular customer, as it can help establish a positive relationship with the staff.

When There Is Already a High Service Fee or Automatic Gratuity 

Sometimes, restaurants already apply an automatic gratuity, especially for large parties. Since it’s already included, there’s typically no expectation to add to that. With that in mind, if you had great food and service, a 5-10% extra tip is a nice way to show your appreciation.

If the Service Wasn’t Good

If your expectations weren’t met, it’s acceptable to tip less than usual—some people may tip as low as 10%, but it’s advisable not to go below that. Be mindful of conditions out of your server’s control, like the kitchen running slow.

The Bottom Line

Tipping culture in the U.S. is shaped by history, economics, and evolving social norms. Changes in technology and a post-pandemic world have left many Americans unsure of what to do. However, researching and staying current on these practices can paint a clearer picture of tipping expectations. By doing so, we can ultimately help both customers and employees.