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Consumer Trends

Tipping 360 Part 1: How consumers view tipping policies

no tipping policies in restaurants

Much was made of Danny Meyer’s announcement in October of a trial separation with traditional tipping at his New York City restaurant, The Modern. However, as with most things, there are more sides to the story. While it may be his desire, along with other operators’ flirting with no-tipping policies, to do away with gratuities in favor of higher pay for all restaurant workers, there are two other stakeholders: the consumer and the server, who must be onboard if the notion truly is to take hold.

To understand which way the zeitgeist is leaning in the tipping debate, Restaurant Business is launching a three-part series, “Tipping 360,” to examine the issue from all perspectives. The first installment explores consumers’ sentiments about no-tipping policies and their willingness to change. Future reports will tackle the issue from operators’ and servers’ points of view. We worked with market research firm Technomic (which is owned by RB’s parent company Winsight) to survey 500 consumers on the shifting tide in tipping culture. Here’s what we found.

Today’s tipping trends

As expected, most diners usually tip 15 or 20 percent at full-service restaurants. Middle-age consumers—perhaps because they’re more established in their careers and making more money—tend to be better tippers; half of folks ages 45–54 typically tip 20 percent or more compared to 26 percent of folks ages 25–34. Only 23 percent of consumers in the West tip 20 percent, while Northeasterners are the most generous, with 35 percent of diners tipping that amount.

Asked if they’re tipping a higher percentage now than they were two years ago, most consumers (55 percent) said no. Of the 45 percent who are tipping more, many say it’s because they have more money to do so. A number of respondents noted that they’re tipping more today because they’re concerned about server pay, a sign that labor unions’ messaging about minimum wage and salaries of tipped workers may be resonating with consumers.

The future of tipping

Word of restaurants from New York City to San Francisco testing no-tipping policies slowly is spreading to the mainstream. Just under half of consumers are aware that some restaurants have discontinued tipping.

Their reception to such policies is lukewarm. Most consumers say they are neither excited nor upset about the prospect of their favorite restaurant doing away with tipping.

What would it take for diners to embrace the change? Half say they’d like no-tipping policies if they knew servers were getting a better deal. Consumers were less motivated by the ease of not having to figure out the tip at the end of the meal, and they dislike the idea of losing control: 47 percent said that not being able to reward servers for exceptional service is a drawback to no-tipping policies.

 

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Consumers on no-tipping policies

Currently, 47% of consumers would feel indifferent if their favorite full service restaurant did away with tipping.

How much do you usually tip when visiting a full-service restaurant?

Are you tipping a higher percentage than two years ago?

Who’s tipping more than before?

Sixty-six percent of 25 to 34 year olds and 58 percent of 18 to 24 year olds are tipping more now, compared to only 32 percent of those 55 and older.

About half of consumers are familiar with some restaurants discontinuing tipping.

What would you like about a move to no tipping?

What would you NOT like?

What would you dislike about no-tipping policies?

“These servers work hard for little money and need tips to survive.”

"Servers are traditionally underpaid by management. They depend on the tips to make up the difference. If a person tips in cash, the server only has to pay tax on a third of their tips.”

Why are you tipping more now than two years ago?

“I am of the age where I recognize and appreciate the work that waiters do to serve us.”

“Service has gotten better.”

“I’m eating out less, so I can tip more, but I only tip if I feel they deserve the tip.”

“I feel pressured to do so.”

“I am more appreciative, and I understand that servers are probably struggling and could use the money.”

Consumer survey facts

 

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Here's what operators and servers say about the tipping change.

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