Service industry now hit by ‘tipflation’, experts say consumers still hold power


DELMARVA – “Tipflation is alive and well. Whether that’s fortunate or unfortunate depends on who’s doing the tipping and who’s receiving the tip,” Chambers said.

You heard right! Tipflation is the newest trend making a growing presence across the service industry. Experts say tipflation is a combination of industry impacts caused by the pandemic and a potential safeguard for service workers.

You may have seen it in the form of automatic gratuity placed on checks or even on digital pads when closing out your tab. “Alot of this is happening when you insert your credit card and get a prompt. The prompt is then suggesting a tip, so it’s not necessarily leaving it up to the customer anymore. It’s giving you options for 15%, 20%, or even more,” Chambers said.

“Frankly, it’s leaving consumers uneasy and even guilty depending on what percentage gratuity they determine to leave.”

Executive Director of Ocean City Hotel Motel Restaurant Association Susan Jones says those who receive tips in the resort area make $3.63 an hour, which is why those tips are crucial for those in the industry. “Say the restaurant is not that busy that day, if they don’t at least make up to that minimum wage then the restaurant has to make up that difference,” Jones said.

The current industry tip standard is anywhere from 18%-20%, according to Salisbury Area Chamber of Commerce President Bill Chambers.

Yet, Chambers adds that pressure to do so could do more harm than good. “And what’s happening in reality is customers are starting to tip a little bit less, we’re seeing more take out dining so the customers can actually avoid tipping,” Chambers said.

“This is the last thing restaurant owners need is less walk-in business. They need more walk-in business,” Chambers said.

So, the big question still remains: to tip or not to tip?  Experts we spoke with have some tips for you to keep in mind as you dine this holiday season. “My advice to the consumer is tip on what you feel the service generated for you was deserving of,” Chambers said.

“And if they’re hospitable and friendly they can make a great deal of money,” Jones said.

Despite that minimum wage being low for service industry workers, experts say those individuals actually have the opportunity to make well above minimum wage with tips.

Experts also advice that even though tipping is an industry standard, you as the consumer have the right to say no.

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