What is the new etiquette for tipping?

By Stacey Vanek Smith | NPR Goats & Soda

What are the new rules for tipping?

Businesses that never seemed to ask for a tip before — like grocery stores, self-checkout machines and fast food restaurants — are now asking for one these days.

To answer this question, it helps to understand the purpose of tipping and why requests have increased over the past few years. It's a tricky topic, says Sylvia Allegretto, a senior economist at the Center for Economic and Policy Research who has done extensive research on wages and tipping. "It's confusing, people don't get it — but it's really quite important" to how some workers get paid.

While some of our experts say much of the etiquette remains the same (for example, if you're not sure about who or how much to tip, don't be afraid to ask), there are a few new variables to keep in mind.

A change in tipping culture

Tipping expectations have grown over the past few years. According to a 2023 Pew Research survey of nearly 12,000 adults in the U.S., about 72% say they are being asked to tip service workers more frequently than in the past. And only about a third say it's "extremely or very easy" to know when and how much to tip.

One of the reasons is the pandemic. We started tipping people we didn't use to tip and tipping more than usual as a way to support essential workers at a time of crisis, says Shubhranshu Singh, a marketing professor at Johns Hopkins University, who focuses on business strategy and management.

At the same time, the technology around how we pay has changed, says Singh. Square, the company behind many electronic payment screens gets a cut of each transaction, including the tip. So creating software that encourages tipping (and encourages big tips) means more money for companies like Square.

Tipping is also a way to pay workers more without actually raising their wages. It allows restaurants to get more money to workers while still keeping their prices low, says Sean Jung, a professor at Boston University's School of Hospitality Administration.

Why we tip in America

In the U.S., we have a two-tier wage system, says Allegretto. "We have minimum wages and then we have subminimum or cash wages paid to workers who are tipped."

There's the federal minimum wage of $7.25 an hour, but every state has the ability to set their own minimum wage. Some states have minimum wages that are more than twice that.

There's also a subminimum wage. That is a wage some service workers get paid that is below minimum wage. The idea is that workers earn a subminimum wage and then customer tips make up the difference to get workers up to minimum wage.

Location matters

When deciding how much to tip, it can be helpful to look up the minimum and subminimum wages of your state, says Allegretto. The think tank Economic Policy Institute has a wage tracker that can help you find this information.

The tip you leave for a server in one state might mean something different to a server in another. In Washington state, for example, the minimum wage is more than $16 an hour and there is no subminimum wage for workers like servers. Meanwhile in Tennessee, the subminimum wage is $2.13 — so your server is probably counting on the extra change you leave for your pie and coffee.

When in doubt, ask

It's not always clear which types of workers earn a minimum and subminimum wage. Often, a subminimum wage will get paid to bartenders, servers and people who work at car washes, but it's hard to know.

Allegretto acknowledges that the system is complicated. It "puts way too much on the customer [to know] what people are getting paid in different jobs in different states."

So if you're not sure whether you should tip or how much, simply ask the person who is serving you, says Singh. He shares some helpful questions:

• What is the minimum and subminimum wage in your state? If the subminimum wage is low, your tip will help the employee make a livable wage. If there is no subminimum wage, tips are actually gratuity.

• Do you keep your whole tip? Some payment systems like Square take a portion of the tip, so that may be a factor in how much you decide to leave behind.

• How can I make sure you're getting my tip? Some businesses might not be tipping the person you think your money's going to.
  

• If you don't feel comfortable asking these questions, Singh says you can always tip in cash. "Then you know you are giving that person money right there."

Don't forget to tip people who you might not have a direct interaction with, like hotel housekeepers, says Singh.

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