In 2022, as we all started eating out at restaurants again, Canadians noticed tipflation happening across the country. Without warning, the unwritten rules of tipping had been changed. That standard of 15% for good service had seemingly crept up to 18%, 20% and, in some places, 30%.
This is making already expensive meals almost unaffordable, and it’s starting to negatively impact servers. In the U.S., restaurant patrons are already tipping less, and we’re sure to see the same trends here soon: the majority of Canadians are already in favour of an end to tipping because of uncontrollable tipflation.
If the service was great, you’d give more. If the service was poor, you’d leave 5–10 percent to make a statement. And you’d never not leave a tip because you knew servers relied on their tips.
These unwritten rules stuck for so long because they seemed fair.
If you could afford to buy a $25.00 meal, you could afford to pay $28.75. And those $3.75 tips added up quickly for servers: a month’s worth of just those put over $700 cash in a server’s pocket after tip outs
Have you noticed recently that 15% isn’t offered as an option on payment machines at restaurants anymore? Almost everywhere you go, the recommended tip starts at somewhere around 20%, and that is on the total amount of the bill, tax included.
For context, with a 20% tip, that $25.00 meal would now cost $30.00. And for many people, that jump is starting to feel unreasonable.
But if you delve a bit deeper into the science of tipflation, you start to feel that maybe you don’t have to raise your tipping rates just because they said so.
Choice architecture is the concept of presenting options in such a way as to encourage optimal choices.
We see examples of choice architecture all around us. Two notable examples are grocery store layouts that influence what you see first and therefore buy most, and opt-out options on emails, which are intentionally inconspicuous so fewer people see them.
A sub-theory of Choice Architecture is known as nudging, which is a more explicit method of getting people to make the desired choice.
One common form of nudging is highlighting one of many choices as the best choice, like when an online subscription will point to one as the best value.
Another, which is what’s happened with tipping, is when choices are presented as the only choices when the options are technically infinite.
In the past, the machine asked if you wanted to tip and the percentage you wanted to pay. Today, it gives you suggestions that start at 18% and could go all the way up to 30%.
This change set a new standard out of the blue and left the door open for random increases. A 23% tip, which would equal the jump from 15% to the 18% that became the norm in 2017, would drive that $25.00 meal up to almost $31.00.
Of course, that $25.00 meal in 2017 might cost closer to $35.00 today due to inflation. And with 13% tax and a 23% tip, you’d be paying $47.60.
So far, we’ve only discussed restaurants because it’s where tipping is most common. But other kinds of businesses where tipping has been customary have caught on to Choice Architecture. As the world moves away from cash, hair salons, taxis or Ubers, bars, tattoo and massage parlors, hotels and even babysitters are starting to nudge customers with tipping options.
You don’t have to budge when they nudge.
You can choose to enter your own tip amount, and you can use any system you want to figure out what you want to tip.
One way might be to set a per cent to tip based on industry. For example:
And if the establishment you’re at doesn’t offer you an option to choose your own tip structure, you’re more than within your rights to not leave a tip at all. In that case you should let someone at the establishment know why you’re not leaving a tip so they can correct their approach.
The correct answer is that it should always be acceptable to not leave a tip because it’s your choice. But now that a digital tip option is being presented more frequently and more broadly, consider adopting these rules:
What if you can’t afford a tip?
Many opinions out there are variations of “if you can’t afford to tip, you can’t afford to eat out.” This is fundamentally untrue because tipping isn’t part of the cost and never has to be.
A tip is a choice you make to show appreciation for service you thought was worth a few extra dollars, or gratitude for people you feel went above and beyond. If you can’t afford to pay more, you can show gratitude in many other ways:
And what about tipping on tax?
Many people forget to calculate their tip on the pre-tax amount of their bill and instead calculate their tip based on the taxed amount. Depending on your bill and the province you’re in, the unnecessary extra you pay in tip can add up quickly.
The tip you choose to pay is an appreciation of the effort put forward. Nothing more. Thinking of it as anything else will lead to growing tipflation, and that will eventually lead to fewer people going out to places they’re expected to tip.
Pushing back on tipflation by following your gut as to what is worthy of a tip and how much to give will help everybody win in the long run.
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