Murray, Kentucky – Tipping culture in America has taken a new turn in recent years, with the rise of “tipflation” leaving many customers feeling overwhelmed by requests for gratuities. This trend has been particularly pronounced since the onset of the COVID-19 pandemic, as digital payment systems have become more prevalent in businesses across the country.
Assistant Professor of Marketing Ismail Karabas from Murray State University shed light on this phenomenon, explaining that the surge in tipping prompts is closely tied to the increased use of digital payment methods such as Square, Toast, and PayPal. These Point of Sale (POS) companies not only facilitate payments but also provide the software for tipping prompt devices that now appear at the end of customer interactions in various establishments.
Karabas emphasized that the tipping revolution ushered in by companies like Square and Toast has expanded beyond traditional sectors like restaurants and bars to encompass cafés, chain establishments, and even businesses that historically did not rely on tips. While some establishments have the option to opt-out of tipping prompts, many choose to embrace them as a means of improving employee compensation, reducing turnover rates, and increasing customer satisfaction.
However, Karabas cautioned that excessive tipping requests could potentially backfire on businesses, as customers may feel irritated and less likely to return to establishments that barrage them with gratuity prompts. Despite customer frustrations, tipping culture seems poised to continue expanding in the absence of government intervention.
A recent study revealed that over three-quarters of Americans believe tipping expectations have gone too far, citing the ubiquitous nature of gratuity requests at self-service kiosks and convenience stores. While some customers may find the influx of tipping prompts bothersome, paying with cash remains a viable strategy to avoid such requests.
As tipping culture evolves in response to changing payment methods and consumer expectations, businesses must strike a balance between incentivizing tipping and ensuring a positive customer experience. Ultimately, the ongoing debate surrounding tipping practices underscores the need for businesses to adapt to shifting societal norms while maintaining customer loyalty and satisfaction.