A recent industry report by restaurant software company Toast, published on September 12, reveals a decline in restaurant tipping rates across the United States during the second quarter of 2023. Toast, a company that collaborates with approximately 93,000 restaurants nationwide, unveiled its inaugural “Restaurant Trends Report” in February 2022. The report, drawing from sales data collected from select restaurants on its platform, sheds light on tipping behaviors and preferences in the US.
Tipping Trends in Q2 2023:
According to Toast’s report, the average tip received by servers across all 50 states in the second quarter of 2023 was 18.9%, marking a slight decrease from the 19.0% observed in the first quarter of the year. The report also ranks the average tipping rates for each state. Delaware stands out as the most generous, with an average tip rate of 21.5%, followed closely by Indiana and Kentucky, both tied at 20.6%.
On the flip side, California registered the lowest average tipping rate at 17.4%, according to Toast’s findings. Other states making the list for less generous tipping habits include Washington at 18%, and Nevada and Florida, both at 18.2% and 18.3%, respectively. Interestingly, Delaware and California held the titles of best and worst tippers in the first quarter of 2021, as reported by Toast on May 31.
Impact on Full-Service Restaurants:
Toast also monitored tipping rates specifically at full-service restaurants, encompassing both casual and fine-dining establishments offering table service. In the second quarter, tipping rates at these venues dipped to 19.4%, down from 19.7% in the first quarter. Notably, this figure represents the lowest average tip amount for full-service restaurants recorded by Toast since the onset of the COVID-19 pandemic.
Factors Behind the Tipping Decline:
Toast points to several factors contributing to the decline in tipping rates:
- Tipping Fatigue: Increased “tipping fatigue” among consumers who may be grappling with the custom of tipping in various contexts.
- Rising Cost of Living: Escalating inflation rates have led to a higher cost of living, potentially impacting patrons’ ability to tip as generously as before.
- Service Charges: Some restaurants have introduced service charges, which could influence patrons’ tipping behavior.
The Tipping Debate:
While the decision on how much to tip ultimately rests with patrons, conventional wisdom suggests a range of 15% to 20% regardless of the service or industry. This standard is derived from input gathered from 100 service workers in New York City, as reported by Tim Urban of Wait But Why.
However, it’s worth noting that the practice of tipping has sparked controversy in the US. A Bankrate survey from June revealed that nearly one in three Americans believe that tipping culture has become excessive. Moreover, some customers have expressed unease as more stores and services incorporate tip requests into their transactions, with some viewing these prompts as a form of “emotional blackmail.”
In conclusion, the recent decline in tipping rates, as outlined in Toast’s report, reflects a complex interplay of factors. While tipping remains a customary practice in the US, it is clear that evolving economic conditions and changing consumer attitudes are influencing how patrons engage with this age-old tradition.