AAt the height of the Covid-19 pandemic, many Americans pledged to offset the negative impact on service sector workers by becoming better tippers. But new data shows Americans haven’t just failed to keep up – they’re tipping worse now than before Covid hit.
While 73% of Americans say they always tip at a sit-down restaurant, that figure is down from 77% in 2019, according to a new demographically-weighted survey from CreditCards.com. And while 57% of Americans still tip food delivery people, that’s down from 63% in 2019. Only about four in 10 Americans (43%) always tip a taxi or rideshare driver , compared to one in two (49%) before the pandemic. .
The only exception to the trend: about two-thirds of Americans (66%) say they always tip their hairdresser or barber, up three points since 2019.
“While more than a third of Americans have pledged to become better tipsters in 2020 and 2021, it appears the sentiment has dissipated,” said Ted Rossman, senior industry analyst at CreditCards.com. “Inflation is reducing consumers’ purchasing power and a tight labor market has left many service industry companies understaffed and struggling to deliver top-notch customer experiences.”
Fast-food chains have weathered the pandemic better than on-premises restaurants, thanks in large part to drive-thru and digital ordering. McDonald’s, the world’s largest fast-food chain, and Starbucks, the only two restaurant companies in the Forbes Global 2000 top 500 in 2022, are two prime examples. However, the sector’s biggest upside has been Darden Restaurants, whose stable of full-service restaurants includes Olive Garden, LongHorn Steakhouse and half a dozen others.
High inflation for decades has replaced Covid as the biggest threat to the service sector. Historically, restaurants have been hit in times of high inflation, as consumers look for ways to reduce discretionary spending. According to a new CNBC survey, more than half (53%) of Americans now plan to “mostly” cut back on dining out. Recent data from Revenue Management Solutions shows that the average restaurant check was 7.2% higher year over year, but restaurant traffic in April was down 9.4% over of the same period.
The CreditCards.com survey also revealed some confusion about tipping other types of service workers. For example, only 27% of Americans say they always tip hotel housekeepers, while 26% never do. The rest – almost half of respondents – said they only tip housekeepers occasionally.
American young adults tend to be the biggest tipsters, but they’re also the most inconsistent. While the median tip for service at a sit-down meal is 20% for all generations, average tips are much higher for Gen Z (26%) and Millennials (24%). Gen Xers tip an average of 20% and Baby Boomers tip 19% on average. Still, it’s worth noting that more than four in ten (43%) of Gen Z and Gen Y customers combined don’t leave anything at least some of the time.
Restaurants and other establishments can inspire better tips through the power of suggestion, according to the CreditCards.com survey. Among Americans who have come across suggested tip amounts, more than a quarter (26%) say they are inspired to tip more.