Americans Face Rising Tipping Requests, Dubbed Tipflation, in the Digital Age

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ICARO Media Group
News
02/04/2024 20h42

In recent years, a phenomenon known as "tipflation" has emerged in the United States, with Americans being asked to tip more frequently and generously than before, particularly in the wake of the COVID-19 pandemic. This surge in tipping requests can largely be attributed to the increased use of digital payment systems, according to Professor Ismail Karabas, an assistant professor of marketing at Murray State University.

As Professor Karabas explained in an interview with Fox News Digital, the pandemic prompted a significant shift towards digital payment methods, with companies like Square, Toast, and PayPal playing a prominent role in the payment industry. These companies also provide the software for tipping prompt devices that now appear at the end of customer interactions in various establishments, including restaurants, cafes, bars, and even businesses that traditionally do not rely on tips.

The tipping revolution, as Karabas described it, began with the pandemic and has since expanded to encompass a wide range of establishments. While companies like Square and Toast have incorporated tipping prompts into their software more frequently than before, other entities have also benefited from these increased requests. Karabas noted that managers have the option to opt out of these prompts but highlighted the advantages they bring, including higher employee salaries, reduced turnover rates, and increased employee satisfaction. Additionally, the POS companies earn more fees through each transaction made via the devices.

However, Karabas acknowledged a potential downside to an excessive number of tipping prompts. He shared the findings of a study, in which he was involved, indicating that customers may become irritated with the transaction process at quick-service restaurants due to the presence of tipping prompts. This frustration could potentially deter them from returning to those establishments.

Looking towards the future, Karabas predicted that tipping prompts could expand further unless there is government intervention or regulation. While some customers may find the sudden increase in tipping requests upsetting and confusing, Karabas emphasized that economically, it provides additional wages and support to employees. He suggested that paying with cash might be a workaround for customers who wish to avoid tipping prompts, as it avoids interaction with the devices.

A recent study by CouponBirds supports the notion that Americans are becoming weary of tipping expectations. The study surveyed 1,199 Americans about their tipping habits and asked another 628 participants about their views on tipping and wages for servers. Over three-quarters of those surveyed believed that tipping expectations have gone too far, alluding to the growing presence of gratuity requests at self-service kiosks, convenience stores, and similar establishments.

As "tipflation" continues to permeate American society, it remains to be seen how customers and businesses will navigate this evolving landscape. While some welcome the increased support for employees, others express concerns about the potential irritation caused by frequent tipping prompt encounters.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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