Consumers are pulling back on spending on tips for services workers, with the share of people who say they always tip food servers, delivery drivers, hair stylists falling 8 percentage points since 2021, found a Bankrate survey release Wednesday. It also found that people who always tip taxi and ride-hail drivers fell 7 percentage points.
As the COVID-19 pandemic raged in 2021, three-quarters of consumers said they always tipped food servers; now, just two-thirds do. With high inflation rates, people are choosing to bypass the ever-present tipping prompts, though some employee’s wages are increasing more quickly than prices. In at least 25 states, minimum wage has or will be raised, with certain cities such as New York and Chicago requiring tipped workers to be paid the full minimum wage.
Some consumers may feel like they don’t need to spend as much on tips when using mobile payments because of a lack of facetime with the service worker. “The larger that sort of psychological distance from the person or business — or the weaker that shaming force is — the less likely we are to follow through on that intention of tipping,” said Hans Frech La Rosa, senior behavioral researcher at Duke University’s Common Cents Lab.
