One Guelph restauranteur wishes tipping never existed.
“It’s getting a little out of control,” said Court Desautels of the Neighbourhood Group of Companies, which includes Park Eatery, Borealis and Miijidaa. “I think people are just getting a little tired of it.”
With tipping demands on the rise, consumers are feeling a pinch in their pocketbooks when it comes to dining out.
Tipflation and tip creep are to blame: consumers are expected to tip more than they once were as tip prompts increase, and to tip more frequently as they creep into every industry from fast food to online sales.
In response, customers are going out less, tipping less, or tipping out of guilt. Some have even sworn off tipping almost entirely.
So how did we get here?
Tipping has been the norm in North America for a long time, said Bruce McAdams, associate professor at the University of Guelph who has been studying tipping for the last 12 years.
In the mid-1900s travel guides listed the suggested tipping amount as five to 10 percent for the U.S.
Having a digital prompt tell you what amount to tip is newer – within the last 10 or 15 years, he said. While you could pay with a card before that, there would be no prompt to tell you what to tip, though the suggested amounts were in percentages.
From 1970 to 1990, he said tipping 10 per cent was the standard; that grew to 15 per cent from 1990 to 2010.
“It’s been pretty static,” he said.
But that changed during the height of the pandemic.
Data shows people were tipping almost five per cent more coming out of lockdowns to support restaurant workers who had been laid off for lengths at a time.
Operators and payment machine companies responded by increasing their tip prompts: where the lower end was previously 10 or 15 per cent, it now often starts at 18 per cent – otherwise known as tipflation.
It was only a honeymoon period though, and didn’t last.
“Canadians were tipping 16 per cent (pre-pandemic) and post it was 21. Then after (a few) months, it went back down to 17 per cent,” McAdams said.
Still, tip prompts are sitting higher. McAdams has had people send him pictures of prompts as high as 30 per cent.
Consumers are responding to these changes: In 2016, he said 46 per cent of Canadians were in favour of tipping, and 40 per cent wanted to move to a service-included model where tipping isn’t required. Now, those numbers have changed to 32 and 59 per cent, respectively.
“That 20 per cent jump in six or seven years is significant and rapid,” he said. “Seventy-seven per cent of Canadians are not fans of auto tipping prompts on digital screens.”
The increase in tip prompts coincided with swelling inflation of the last few years, as higher food prices drive up restaurant costs.
That means paying more at restaurants while also being expected to tip more, and at the same time, having to pay more everywhere else – so purse strings are pulled tight and customers have had enough.
Raymond Fowler is a Guelph resident who doesn’t tip often because he doesn’t see the need to. Since servers are paid minimum wage he feels he shouldn’t have to supplement their income.
He doesn’t necessarily think tipping is a bad thing. But he thinks businesses are taking advantage of the social pressure by having a staff member stand behind the tip prompt screen in a variety of settings.
Tip creep is spreading, with tip prompts showing up in non-traditional services and industries – like retail stores, online stores, oil change places and fast food joints.
A recent study by Angus Reid also found 40 per cent of Canadians are going out less to restaurants.
This is the case for couple Jerard Joseph and Leah Tony, who moved to Canada from India in the last few years.
There isn’t a big tipping culture in India. People tip at fancier restaurants but everywhere it’s usually leftover change, they said.
While they were aware of Canada’s tipping culture when they moved to Guelph, they don’t typically go to dine-in restaurants in light of it, instead opting for fast food places.
Even there, they feel pressured to tip and often tip more than intended because of the pressure of someone watching them and holding up a line.
“Sometimes we don't want to tip but this is forcibly asking you to tip and we might end up paying a lot of money as a tip alone. It’s pretty annoying,” said Tony.
Joseph feels bad when he tips because he ends up paying more for something than he intended to. He thinks tipping shouldn’t be on payment machines and if customers want to tip they can leave some extra money at the table.
Last month the couple went to a dine-in restaurant and tipped about 20 per cent. They don’t typically tip that much but it was the starting suggested tip on the payment machine, so they felt like it was their only option.
Tipping practices are different all over the world, said Amy Hanser, a sociology professor at the University of British Columbia. So newcomers are often surprised they need to leave a tip. It can be even harder if people are economically constrained. Overall, she said it’s a messy practice that brings with it social judgment.
“And it can go both ways, both on the customer who does or doesn't tip appropriately, and the server who's really at the mercy of the customer. The customer ultimately can do whatever they want,” she said.
“The customer just shouldn't be the boss. It's an insidious practice. It's old fashioned. It's become formalized through technology, it can mobilize stereotypes on both sides of the interaction.”
She said the variance of tipping habits can also destabilize wages.
Hazel, who only asked their first-name to be used, is a downtown Guelph bartender who has worked in the food and hospitality industry for several years in various roles.
Where Hazel works, servers and bartenders receive 95 per cent of tips earned and tip out five per cent to the kitchen staff. Tips are divided equally between bartenders and servers and are based on how many hours they worked. Typically on a busy Friday or Saturday night after working a six to eight hour shift, Hazel will bring home about $50 to $60 of tips. Hourly, it tends to work out to an extra $10 an hour on top of their minimum wage.
Hazel is in a fortunate situation where they live with their parents so they don’t have to rely on tips to help pay bills. They know other servers who are struggling to make ends meet and have given up going out for dinner and their hobbies since they can’t afford it anymore. Other servers have picked up more jobs to earn more money.
“It's interesting because obviously the economy is really struggling and people everywhere just can't afford to live. So it's a really hard balance between wanting to help servers who are working on minimum wage and wanting to preserve your own money, because everyone wants to go out for dinner and everyone wants to have a good time with their friends, but not everyone can afford to tip 20 per cent on top every bill,” said Hazel.
For Dean Curtis, who has lived in Guelph for 30 years, his tip depends on the service he receives. Average to good is 20 per cent, and this is what he typically tips. If it’s poor service he tips 15 per cent and he has trouble tipping less than that
He didn’t know server’s now make minimum wage. Now knowing this information if the service was poor he thinks he will be more inclined to tip less.
The server's wage was $12.55 prior to the Ontario government’s change of servers being paid minimum wage effective January 2022. The minimum wage at the time was $15.
Minimum wage in Ontario will rise from $16.55 to $17.20 in October.
GuelphToday conducted an online poll about tipping from July 18 to 24. The poll had 2,181 respondents. The general consensus was 30 per cent of participants tip 15 per cent.
“For me tipping is about the whole experience in a restaurant. I am at a table, they're coming to me and serving me, spending time checking on me a few times,” said Curtis. Whereas at a Subway for instance it’s a quick interaction and an assembly line of the sandwich being made so he struggles whether to tip or not. “I tend to not tip as much as I do at a restaurant,” he said.
He feels pressured to tip in other settings like fast-food restaurants. He was once prompted to tip online while purchasing a t-shirt.
If gratuity is already included in the price at restaurants he thinks he would prefer that. He has a rental home in Orlando, Florida, and there is a restaurant he goes to that has an 18 per cent gratuity already included. He likes this because he doesn’t have to think about the tip and pays the bill for what it is.
“I think we absolutely should abolish tipping. Can we get there? That is going to be difficult, because I think when you get into patterns and habits it's going to be hard to change those habits,” said Curtis.
“I really don't like tipping culture,” said Hanser. But she also doesn't think tipping culture is going away.
Desautels feels the same.
One of his Guelph restaurants, Park Eatery, started out with a no-tip model, but that changed during the pandemic when they started using an online ordering system for takeout that automatically included a gratuity.
It ended up providing extra income for their servers, who had been frequently laid off over the course of several lockdowns, and it was not something he wanted to take away from them.
“It’s hard at that point to say, hey, we’ve laid you off five times, and we’re also going to take away this additional income that people have been willing to pay.”
If they were to return to a no-tipping model now, they would have to raise their prices significantly, which he doesn’t want to do.
“I don't think the public is ready … to take away tipping. You would see a massive increase in food prices, probably a 30 per cent increase in dining out, which I'm all for. It's just the business model has not been built that way.
While Desautels wishes tipping never existed, he doesn't think it's going to change.
"That's the world we live in," he said.
