As someone who does two jobs involving tips, as well a bit of activism to save cash, this is always a fascinating topic of which I can see many sides! I also live in Europe, where tipping culture is quite different and tips are NEVER suggested on a payment screen until you say something. On recent travels in North America, the tip awkwardness was on multiple occasions part of the reason we just shopped and cooked for ourselves. Is there any thought trend among restaurateurs that cutting the tip screen might be good for business?
Some. But the tipping culture is deeply ingrained. When I started showing screens in 2022 in my restaurant, I decided to turn off the default tip screen.
We were a counter-service restaurant so I figured I’d just build all service into the prices. People practically revolted on day one. They wanted the option to tip and many felt strongly about not being shown the screen. I was pissing off my customers. So I turned it back on.
Wow, that genuinely amazes me - there I was thinking these were tough times! I guess if we just used cash, there wouldn't be any decision to make about screens. How does tipping traditionally work with cash payment is US? I guess it's up to the customer to say something (or nothing) like in Europe?
Less than 10% of the transactions at my restaurant were cash. We eventually stopped taking it because processing the daily cash was costing more in labor than the amount of cash we were taking in. Cash tips in US are usually only along the lines of tossing a buck or two into a tip jar on the counter. Some folks make the effort to leave cash on bills they use a credit card to pay for, but very few.
The process that led you towards declining cash really confirms my suspicion that consumers themselves have been a key driver in cash’s downfall. But those who care about its future can also use that power in the opposite direction. In places where it’s not too late, they need to make a point of using cash so that businesses are not put in the position yours was. By the way, I’d be interested if you could elaborate a bit on the labour involved with cash processing! What are the tasks exactly, and how long do they take?
Sure. Cash is expensive to process. A manager has to count down the drawer and balance it at the end of the day, write a deposit slip, and troubleshoot if it comes up over or short. Then someone has to walk it to the bank and hand it off for deposit, and buy change to stock the cash drawer with quarters, dimes, nickels, singles, and fives. Then come back, file the deposit slip, load/count the drawer, and document all that.
Occasionally, there’s a need to review security footage if a cashier or manager consistently comes up short or out of balance and then there needs to be HR policies with regard to documenting all that and protocols to be followed if employees need to be disciplined or dismissed for repeated cash shortages or even clear evidence of theft.
All told, it’s about 1.5 hours a day at the manager level, so a $22-25/hour labor cost.
Also - cash is super dirty and unsanitary. If you see people handling cash and then making your food/drinks, that’s a concern. Hand washing needs to happen. Once you see it, you can’t unsee it.
Like Ralph, I also default to $1.00 when I’m at a counter-service spot—local food places, coffee shops, ice cream, etc.
My worst tipping experience—the one I still think about and bring up (obviously) was at the Sphere in Las Vegas. We were there to see The Eagles and ordered two whiskeys on ice and a bottle of water. The total came to about $60, with a default 20% tip of $12. I overrode it to $4, which felt generous for roughly 35 seconds of interaction. $2 per drink.
The bartender turned the screen back toward himself, checked what I’d entered, made direct eye contact to be sure I knew he saw it, and then poured two of the most aggressively “by-the-book” one-shot drinks imaginable. No ambiguity: the message was received, and I was being punished.
My biggest regret is not saying something in the moment. I was too caught off guard, kind of shame-stunned, to respond.
rude! still a fine tip. but you were getting the same pour regardless, they have pour controllers on the bottles at big places like that. it's all tracked very closely.
At any place (other than a bar) without table service, I now leave a one dollar tip. That's still too much, given everyone there is making over minimum wage.
The death of cash is a big cause of this problem. Tips at places like coffeeshops used to be the change you'd get back plus whatever you wanted to throw in (if anything). This was not a percentage-based game. There was no anxiety, everyone knew the rules. Now that all payments are electronic, there is no change so you're left with a crazy percentage-based option which often bears no relation to the actual service performed. While most POS systems permit customers to type in a specific tip, most people don't want to spend the extra time to do that. So now many people tip 20% on everything and then they say "things are too expensive." Well, yeah, they're at least 20% more expensive.
Englishman here. Tipping in America makes me anxious, it’s such an alien concept outside of 10–20% on waiter-service, taxis. So many low-wage workers in the US must be rolling their eyes when a bunch of Brits arrive. I wonder if we routinely get worse service as a result.
Another challenge with electronic tipping is that in some cases, a small business owner may not distribute it to staff.
I regularly eat at a small counter service restaurant and I was tipping the staff using the electronic payment tip function. One day, a staffer looked around to make sure the owner wasn't there, and quietly told me that while he and the other staff appreciate my intent with the tips, I shouldn't bother, since the owner keeps them all.
To quote the great My Blue Heaven, I don't believe in tipping, I believe in over-tipping. Part of my philosophy now is that I will overtime humans because I will never tip a COCO Robot or Waymo. In fact, my favorite tip story came from a road comic who got a tip screen at a BK in an airport with no humans working at it!
sure, it's a nice idea. but in europe everyone has government-funded healthcare and there's much better job security, pensions, and a better social safety net. you can't really pluck just one aspect out of that larger holistic system and say "oh, yeah, let's do that part which allows me to pay less."
presenting you with the option/opportunity isn’t the same as “being asked”. It’s literally just a required step in the checkout process of most POS apps.
I have been at the counter of places like bagel and smoothie shops and they flip the screen around for a tip. My wife always says treat them well or they may spit in your food!!
but you'd feel better about declining if you knew everyone made at least $25/hour. That's the thing, the problem isn't that you're being shown a tip screen and given the option to tip (I don't view it as "being asked"). The problem is how we feel about it.
I guess I don't have the tip angst a lot of people do. I tip the customary amount for the customary services-wait staff, porters, cab drivers-but not if someone hands me a coffee or sandwich across a counter.. I don't mind that, although it's a big reason we rarely eat out tbh.
1. I assume some of it is “lazy” (or “greedy”) management when setting up the point-of-sale tablet, with tipping on as the default.
2. A large part of “tipping fatigue” for me is the tip percentage inflation (e.g., 15% is now 18-20%, or 20% is now 25%). Base cost of services has already gone up, so why am I asked to increase the percentage on the base as well? If the answer is “wages aren’t keeping up,” then too bad, it’s not like that doesn’t also apply to the customers’ wages too.
I dealt with this at my restaurant when we set up online ordering. When I first set it up, I turned OFF the tip screen due to the fact that we're a quick-serve, everyone makes hourly wage, and I wanted to diffuse the loaded situation I describe in my post. People went nuts. I was immediately met with dozens of angry customers each day asking how they could leave a tip. So I turned it back on.
I'll routinely attend casual events where I'll order a black coffee or sparkling water and tip a dollar, which is on the close order of 30-50% of the list price. It's to show willing and build a small amount of goodwill with the staff.
I'm not getting "clearly offended" from the response. A lot of people will do what Josh described, especially if they're occupying a spot for a few hours and not ordering much. They'll tip a minimum amount as a courtesy to the server. It's usually just a few bucks but calculated as a percentage of the check, it's 30, 40, even 50%.
big agree on most of this, but as somebody who's done a lot of barista work for ten years at local chains or one shop cafes, they're also getting paid reduced wage or bare minimum! if people don't tip at those jobs, i'm barely making rent, much less living wage!
love your newsletter. i'll buy you a coffee when i'm employed again.
Can someone here help me out? I'm going to a personal trainer for the first time. $75 for one hour, paid to the gym. Tip or no tip?
When you subscribe to a Substack, you're basically prompted to tip now.
As someone who does two jobs involving tips, as well a bit of activism to save cash, this is always a fascinating topic of which I can see many sides! I also live in Europe, where tipping culture is quite different and tips are NEVER suggested on a payment screen until you say something. On recent travels in North America, the tip awkwardness was on multiple occasions part of the reason we just shopped and cooked for ourselves. Is there any thought trend among restaurateurs that cutting the tip screen might be good for business?
Some. But the tipping culture is deeply ingrained. When I started showing screens in 2022 in my restaurant, I decided to turn off the default tip screen.
We were a counter-service restaurant so I figured I’d just build all service into the prices. People practically revolted on day one. They wanted the option to tip and many felt strongly about not being shown the screen. I was pissing off my customers. So I turned it back on.
Wow, that genuinely amazes me - there I was thinking these were tough times! I guess if we just used cash, there wouldn't be any decision to make about screens. How does tipping traditionally work with cash payment is US? I guess it's up to the customer to say something (or nothing) like in Europe?
Less than 10% of the transactions at my restaurant were cash. We eventually stopped taking it because processing the daily cash was costing more in labor than the amount of cash we were taking in. Cash tips in US are usually only along the lines of tossing a buck or two into a tip jar on the counter. Some folks make the effort to leave cash on bills they use a credit card to pay for, but very few.
The process that led you towards declining cash really confirms my suspicion that consumers themselves have been a key driver in cash’s downfall. But those who care about its future can also use that power in the opposite direction. In places where it’s not too late, they need to make a point of using cash so that businesses are not put in the position yours was. By the way, I’d be interested if you could elaborate a bit on the labour involved with cash processing! What are the tasks exactly, and how long do they take?
Sure. Cash is expensive to process. A manager has to count down the drawer and balance it at the end of the day, write a deposit slip, and troubleshoot if it comes up over or short. Then someone has to walk it to the bank and hand it off for deposit, and buy change to stock the cash drawer with quarters, dimes, nickels, singles, and fives. Then come back, file the deposit slip, load/count the drawer, and document all that.
Occasionally, there’s a need to review security footage if a cashier or manager consistently comes up short or out of balance and then there needs to be HR policies with regard to documenting all that and protocols to be followed if employees need to be disciplined or dismissed for repeated cash shortages or even clear evidence of theft.
All told, it’s about 1.5 hours a day at the manager level, so a $22-25/hour labor cost.
Also - cash is super dirty and unsanitary. If you see people handling cash and then making your food/drinks, that’s a concern. Hand washing needs to happen. Once you see it, you can’t unsee it.
Thanks! Always good to have a business owner's perspective.
Like Ralph, I also default to $1.00 when I’m at a counter-service spot—local food places, coffee shops, ice cream, etc.
My worst tipping experience—the one I still think about and bring up (obviously) was at the Sphere in Las Vegas. We were there to see The Eagles and ordered two whiskeys on ice and a bottle of water. The total came to about $60, with a default 20% tip of $12. I overrode it to $4, which felt generous for roughly 35 seconds of interaction. $2 per drink.
The bartender turned the screen back toward himself, checked what I’d entered, made direct eye contact to be sure I knew he saw it, and then poured two of the most aggressively “by-the-book” one-shot drinks imaginable. No ambiguity: the message was received, and I was being punished.
My biggest regret is not saying something in the moment. I was too caught off guard, kind of shame-stunned, to respond.
rude! still a fine tip. but you were getting the same pour regardless, they have pour controllers on the bottles at big places like that. it's all tracked very closely.
At any place (other than a bar) without table service, I now leave a one dollar tip. That's still too much, given everyone there is making over minimum wage.
The death of cash is a big cause of this problem. Tips at places like coffeeshops used to be the change you'd get back plus whatever you wanted to throw in (if anything). This was not a percentage-based game. There was no anxiety, everyone knew the rules. Now that all payments are electronic, there is no change so you're left with a crazy percentage-based option which often bears no relation to the actual service performed. While most POS systems permit customers to type in a specific tip, most people don't want to spend the extra time to do that. So now many people tip 20% on everything and then they say "things are too expensive." Well, yeah, they're at least 20% more expensive.
Agreed, let's not allow cash to die :)
Englishman here. Tipping in America makes me anxious, it’s such an alien concept outside of 10–20% on waiter-service, taxis. So many low-wage workers in the US must be rolling their eyes when a bunch of Brits arrive. I wonder if we routinely get worse service as a result.
Another challenge with electronic tipping is that in some cases, a small business owner may not distribute it to staff.
I regularly eat at a small counter service restaurant and I was tipping the staff using the electronic payment tip function. One day, a staffer looked around to make sure the owner wasn't there, and quietly told me that while he and the other staff appreciate my intent with the tips, I shouldn't bother, since the owner keeps them all.
To quote the great My Blue Heaven, I don't believe in tipping, I believe in over-tipping. Part of my philosophy now is that I will overtime humans because I will never tip a COCO Robot or Waymo. In fact, my favorite tip story came from a road comic who got a tip screen at a BK in an airport with no humans working at it!
tipping should be only for going above and beyond like in Europe
sure, it's a nice idea. but in europe everyone has government-funded healthcare and there's much better job security, pensions, and a better social safety net. you can't really pluck just one aspect out of that larger holistic system and say "oh, yeah, let's do that part which allows me to pay less."
I could live with tips only for table service, not counter service or the kitchen, but now we are asked to tip everyone.
presenting you with the option/opportunity isn’t the same as “being asked”. It’s literally just a required step in the checkout process of most POS apps.
I have been at the counter of places like bagel and smoothie shops and they flip the screen around for a tip. My wife always says treat them well or they may spit in your food!!
Can we get a $25.00 minimum wage? See there, problem solved.
Not really. Then you'd just be asked to tip more.
but you'd feel better about declining if you knew everyone made at least $25/hour. That's the thing, the problem isn't that you're being shown a tip screen and given the option to tip (I don't view it as "being asked"). The problem is how we feel about it.
I guess I don't have the tip angst a lot of people do. I tip the customary amount for the customary services-wait staff, porters, cab drivers-but not if someone hands me a coffee or sandwich across a counter.. I don't mind that, although it's a big reason we rarely eat out tbh.
it sounds like you've already made your own personal set of "rules" or categories like I discussed in the post. I guess we think alike
Great tipping minds…
you'd still see tip screens.
Two points I’ve brought up elsewhere:
1. I assume some of it is “lazy” (or “greedy”) management when setting up the point-of-sale tablet, with tipping on as the default.
2. A large part of “tipping fatigue” for me is the tip percentage inflation (e.g., 15% is now 18-20%, or 20% is now 25%). Base cost of services has already gone up, so why am I asked to increase the percentage on the base as well? If the answer is “wages aren’t keeping up,” then too bad, it’s not like that doesn’t also apply to the customers’ wages too.
I dealt with this at my restaurant when we set up online ordering. When I first set it up, I turned OFF the tip screen due to the fact that we're a quick-serve, everyone makes hourly wage, and I wanted to diffuse the loaded situation I describe in my post. People went nuts. I was immediately met with dozens of angry customers each day asking how they could leave a tip. So I turned it back on.
Who tf tips 30%?
I'll routinely attend casual events where I'll order a black coffee or sparkling water and tip a dollar, which is on the close order of 30-50% of the list price. It's to show willing and build a small amount of goodwill with the staff.
You do you, then!
You asked, chief.
Yep, and got an answer that I replied to in a way that clearly offended you for some reason.
Cya, chump.
I'm not getting "clearly offended" from the response. A lot of people will do what Josh described, especially if they're occupying a spot for a few hours and not ordering much. They'll tip a minimum amount as a courtesy to the server. It's usually just a few bucks but calculated as a percentage of the check, it's 30, 40, even 50%.
Kk
big agree on most of this, but as somebody who's done a lot of barista work for ten years at local chains or one shop cafes, they're also getting paid reduced wage or bare minimum! if people don't tip at those jobs, i'm barely making rent, much less living wage!
love your newsletter. i'll buy you a coffee when i'm employed again.